I must express my very serious disquiet at the content of the Minister's speech. I find it strange that there is not a representative from the Department of Foreign Affairs here while we are discussing this issue. I say this having had the experience of watching international development association section loan legislation requirements come here before this House again and again and being passed through in relatively brief periods without any discussion as to the implications of passing this legislation for our overall foreign policy. In dealing with the International Development Association section of the World Bank, we are dealing with the soft loan section of the World Bank and the matter is not perhaps serious but I must say that I have to consider, having read the Minister's speech, whether, as foreign affairs spokesperson for the Labour Party, I will have to recommend to my party to perhaps even oppose this legislation on the strength of the speech I have before me. I say this in a considered way because normally when legislation involving small amounts are brought before the House it is considered that it is not worth while delaying the legislation and so on. I want to take up and contest a number of points as ones that do not represent the view of my party or the view of the Irish people. In paragraph 3, page 1 of the Minister's speech he says:
As Deputies will be aware, there is general agreement that foreign direct investment in developing countries enhances their capacity for growth and strengthens their economies. Unfortunately, all too often, investment opportunities are not taken because conditions in these countries may be such as to create doubts in the minds of investors as to the security of their investments. Also, despite the fact that many industrial countries have guarantee schemes similar to that offered by MIGA, there can still be difficulties in finding adequate insurance cover in such cases.
That is not the view of the international community and that is not the view of people in Ireland who look at the World Bank. That is the view of the US, the view of Mrs. Thatcher and of a number of others and I would ask Members of this House to place it in comparison with a basic document issued by the Chilean Government in an introduction to trade and investment, which says that the figures of foreign investment in Chile have exhibited a sustained upsurge in the past ten years, that this is the result no doubt of a policy which guarantees investors a treatment consistent with their rights under the operation of an economic system that has evident significant social as well as economic progress to warrant essential future stability required for the execution of substantial investment projects, and that accordingly, three fundamental principles represent the basis of the Chilean foreign investment policy — equal treatment to national and foreign investors, free access to the various markets and economic sectors for foreign investors and minimum state interference in connection with the activities of foreign investors. It goes on to say that as commonly known, a clear and stable policy is not sufficient however, to entice foreign investors, that several other factors must be simultaneously available to make attractive investment in a given country, and that in the particular case of Chile, such factors are, the operation of a stable economic policy open to foreign markets, availability of first level infrastructure and services and excellent professionals and labour availability to comparative advantages in various sectors including agriculture, forestry, fishing and mining and respect for private property and social stability.
It is extraordinary to find a speech by an Irish Minister for Finance on an aspect of foreign affairs affecting our relationship with world institutions which repeats verbatim the justification by General Pinochet's Government for foreign investment in Chile. This House is a Parliament where words and statements should mean something. I repeat what the Minister said:
As Deputies will be aware, there is general agreement that foreign direct investment in developing countries enhances their capacity for growth and strengthens their economies.
That view is a tendentious one which does not represent the view of my party or of many people in Ireland. They would object in the strongest possible terms. The Minister went on to make offensive remarks about many other countries who are part of the world community of nations. His speech continued:
MIGA is an attempt to remove such impediments. It has the specific aim of encouraging investment flows to developing countries by providing insurance guarantees against non-commercial risks. Such risks can include restrictions on the transfer of currency, the expropriation of assets, the risk of war or civil disturbance and breach of contract.
Is this to say that in countries where there is a struggle going on to remove a dictatorship such as in Marcos's Philippines, the administration of Pinochet in Chile or to remove General Stroessner, we can say we have a responsibility to defend private speculative international investment and say that those who are struggling within these countries are somehow creating unstable conditions? Who do we think we are? This is a House to which I have to come week after week listening to what I can only call republican guff and so-called decolonisation positions from different people around the House. This language is the language of the coloniser, the language of the rich and the language of the north in international economic terms. It is not taking into consideration the view of the south in relation to international aid. It is offensive and insulting language in relation to many countries where there is a problem about economic structures and who are struggling for human rights in the economic and social realm. I have had a good personal working relationship with the Minister for many years and I would ask him when replying to this debate to disown some of this language because of what it could possibly create by way of a bad impression internationally.
The Minister went on to say:
Guarantee schemes in isolation will not, however, produce miracles. A favourable investment climate and appropriate policies by governments are necessary too. In this respect, an important role which MIGA will also have, in addition to its guarantee function, will be in advising host governments on their investment laws and regulatory and other policies affecting foreign direct investment programmes.
That is what was said to Julius Nyerere when he was forced to abandon the process of native development in Tanzania at a meeting before he returned as President to his country. The Minister and those who might have influenced this atrocious speech may be glad to hear President Nyerere's speech in 1981. He stated:
The World Bank and the IMF were set up by and are still controlled by the rich nations of the world. Whether they are now effective in serving the purpose for which they were established is, I would have thought, questionable. But what is quite certain is that apart from the IDA, a subsidiary of the World Bank, they are not instruments for attacking world poverty and dependency. The IMF, in particular, endorses and serves the present international financial structure, rather than in any way acting as a corrective in its injustices. Further, although it is a creature of the developed nations, these hide behind the IMF when they find it convenient. They pretend it has a special expertise and is politically neutral; when a poor country seeks credit, it is therefore told first to reach an understanding with the IMF.
I say in parenthesis that I am not confusing the IMF and the World Bank. I have read the publications from the World Bank, including their most recent one about supporting private investment and so forth. I had hoped that we would not be in the front row in trying to disgrace ourselves by prostrating ourselves in this new kind of international relationship with the Third World.
Dr. Nyerere went on to say:
This approach must be ended and replaced by a system which will support development and not crush it, as in the current deplorable case of Jamaica.
Michael Manley in Jamaica wanted to give bread to his people and he was broken by the international financial system. Nyerere was forced from office because he could not face the personal problem of looking at the concept he had for native Tanzanian development being scrapped in front of his nose, with the example of a capitulating Kenya next door to Tanzania
Now that we have taken in the speeches of the Minister for Finance to quoting Pinochet economics in relation to aid, I should like to tell the other side of the story. I was recently in Chile, as some Members of this House will know. In the briefing document Chile — A Resource Book issued by the United States Embassy in 1988, there is a page which describes the Chilean economy and states:
Chile is now in its third year of 5 per cent-plus growth and its fifth year of positive numbers, following a massive recession in 1982 and 1983. Inflation has been reduced to one of the lowest levels now experienced in Latin America, investment (both domestic and foreign) is strong, unemployment rates are dropping while the workforce expands. Real wages are climbing, but from an extremely low base. Perhaps more important for a highly indebted developing country, Chile is running a substantial trade surplus. Exports now represent nearly a third of gross national product. Chilean officials state that they will export more this year than Argentina.
It could almost describe this country — exports up, investment up, inflation down and the only things wrong being emigration, poverty and unemployment. May be that comparison is the one which is getting home to the people in the Department of Finance when they are asking their Minister to make speeches such as he has made this afternoon.
The other side of it is very interesting. While these figures were being presented as one face of the Chilean economy — I am only using it as a case study to refute the kind of nonsense to which I have just listened — those indicators were established at a time when the average Chilean was poorer than he was 16 years earlier. In addition the right to organise trade unions was lost, something which is not true here. Wages are 44 per cent lower than in 1973 and overall income is down 15 per cent from what it was in 1973. There is no social security system; it has been curtailed. In negotiating with the World Bank and international institutions the social fabric dealing with basic needs has been scrapped. The health system has been privatised. People get credits which they can cash in at private health institutions. One could go on and on. In 1970, 17 per cent of the Chilean population were classified as poor. In 1987, 47 per cent were classified as poor, involving five million people and many children.
There were, therefore, if you like, two faces to the economy. What we are doing is taking the official gloss, the rhetoric, of external, disembodied, dehumanised type of economics and saying that this is the logic we will follow. Therefore, on a November day, in the Irish Republic the Minister for Finance seeks authorisation to lend the great international assistance that Ireland has to offer to establish a new agency which will guarantee the risks of any social disturbances, such as liberation movements, or any kind of upset that investors might suffer if they invested in any part of the south in the world.
What a disgraceful kind of attitude to have. Of course it will come back, as it always does in this casadh an tsúgáin kind of politics we have in this House, that these are matters for Finance and have nothing to do with Foreign Affairs; that it is the remit of Foreign Affairs to deal with our international policy. I believe there is still somebody alive down in Iveagh House dealing with overseas development aid. That thinking, in the speech to which we have just listened this afternoon is, quite frankly, an atrocious attitude to take.
For example, the Minister had this to say about the obligation that will arise:
Each member will be entittled to subscribe for a specified number of shares and, in Ireland's case, this number is 369.
I am sure that is terribly important. The quotation continues:
In terms of total cost, our subscription will amount to about IR£2.750 million at current exchange rates. However, only 10 per cent of this amount will be paid in cash.
When one looks at the dreary document that constitutes the Estimate for Overseas Development Aid this year this means that yet again, whatever little we will give, we will be giving because we are forced to do so under international obligations while the amount we give by discretion will become tinier and tinier.
What is most interesting is that in the case of this converted Government they seem to have passed on that conversion to the rest of the apostles so fast that it is unbelievable as an exercise in faith itself. The one thing the Government do not have, that nobody in this House has, is a mandate to cut overseas development aid. Nobody went before the people saying that they were going to freeze the existing level of overseas development aid, or that they were going to cut it back. Certainly they did not say — in the course of preparation of the Estimates in 1986, 1987 or 1988 — they were seeking a mandate to cut aid more than cuts in every other area — 36 per cent in one area, 29 per cent in another and so on. They did not say to the Irish people: because you are so generous — another kind of lottery — this time you are not gambling but putting your hands in your pockets and, because you are so generous, we are going to cut our own aid at Government level.
If one looks at where that development aid has been cut one notes that last week the ebullient acting Taoiseach, the Tánaiste and Minister for Foreign Affairs, came into the House and said — in another disgraceful comparison — that when he had been asked as part of the general community of Ministers of Foreign Affairs by the President of Nicaragua, Daniel Ortega, to respond to the greatest disaster that had occurred in Nicaragua in recent times he said, "we are watching the situation; we are being briefed; we are told it is not as bad as it might seem; we are told it is not as bad as Bangladesh and Sudan," thereby making the seedy comparison of one major disaster part of the world with another. Of course the truth is that whoever is advising the Tánaiste and Minister for Foreign Affairs about Nicaragua might have referred to the official statement from the Nicaraguan Embassy in London that said that the disaster was as bad, or worse, in parts of Nicaragua than the 1975 earthquake, that one house in ten had been affected by it, that 300,000 people had been made homeless or had had to move; that 40 people were missing on the outskirts of Managua. But our Minister for Foreign Affairs said they had been advised that it was not as bad as it might seem, that hard choices had to be made and we had to send money from the national lottery to Sudan and Bangladesh. When history comes to be written I hope people will read the records of this House for the last couple of years. I hope they will look at parliamentary questions when they will discover that I asked, week after week, about our office in Sudan. For example, when we rented the office we appointed an individual to take up a position there, to set up an aid programme. That was 18 months before the famine in Sudan. They will note that the Minister was asked every week and month what they were doing about it. The fact of the matter is that the Government closed the office in Sudan, brought the official home and appointed him to a post in Iveagh House. Then, when the Sudanese famine was happening, they decided, late in the day, to respond from the national lottery. Let the world know that: Ireland's foreign policy in relation to aid is to close offices in advance, remove the personnel; then when everyone else in the world is contributing to the point of embarrassment, go back to the gambling fund, take a bit from the national lottery and throw it out. But even crumbs from the national lottery were not available to a Government whose Vice-President and Foreign Minister we entertained here.
In Tanzania, another country in the bilateral aid programme, there was the winding down of projects of which many Members of this House were aware, in Kilosa and other places. Incidentally these projects were not set up for those parts of Tanzania. They were set up as model projects to be replicated and translated to other places where they would be models of community development. They are gone as well; they do not really matter.
When one looks at the other different countries, the different projects there, one discovers the people in APSO who are being called home as are the people in DEVCO. There is now a new philosophy which is more or less this: maybe there is money in Third World poverty and debt? Would it not be nice if they gave us all contracts — if we sent off our medical personnel and got paid for doing so — for building this or that? It is almost an insult to the company but we have almost a Masstock theory of development in current Government circles.
Supposing it were true, that none of this had anything to do with foreign affairs, then why is there not any reference in the Ministers speech this afternoon to the other issues of trade and debt? This speech is about removing the insecurity of foreign investors, about Ireland's international commitments, our obligations under the Constitution to pass this today so that we will be able to remove the insecurities of these people. When will we hear about an overall approach on the part of this country towards the international financial institutions? Do the people we appoint or nominate to directorates in these different financial institutions ever write home? Or should they sent postcards saying how they are getting on? What is our view on the structure of international trade? What is our view on the restructuring of GATT so that it might help the South in relation to trade? What is our view in relation to the debt anyhow? When we go to the United Nations what is our view in relation to the Latin American countries? What proportion of GDP do we think countries should pay in order to fulfil that commitment? I know the answer that will come back — we are a small little country; we have to look after ourselves and are we not debt-ridden; are we not doing nicely with our General Pinochetic economics? They call it the absence of economic rights in Chile. We call it emigration and unemployment here when we get our rare attacks of honesty.
I agree with what Deputy de Rossa has just said, that we have spectacles regularly in this House. I am not being in the slightest emotional about it. I just feel that in relation to the question of our relationship to the international financial institutions, to foreign policy and aid, we are disgracing ourselves more day after day. I would offer one concept alone for consideration, that of mutual interdependency. If we are to take our mutual interdependence seriously do we not need to recognise that it is in our approach towards the international financial institutions, our initiatives and energy should be used in twisting these institutions into such a shape as will meet the needs of the developing countries rather than those of the major donor countries? Where is there any evidence to be found that we are doing so?
What about women in development? What about all of these issues? The answer is this: this country, if it ever dies, will not die in a way that anyone will notice. It will gradually fall asleep and die in its sleep because, in foreign policy at present, we are beginning to be noticed as the sleepwalkers: we do not stand foranything; we do not have a view on anything. We have a lovely principle in regard to all the people struggling for liberation. We picked up this principle somewhere on the road between Westminster and here. It is that we do not recognise opposition or liberation movements and we tell people like the blacks struggling in South Africa, for example, that we will recognise them when Apartheid has been removed. We tell all the other countries the same thing. We tell the Salvadoreans that if they ever achieve true democracy in El Salvador we will then recognise them. Are we not wonderful? We treat the colonised who got free to establish themselves, in a unique, sleveen kind of foreign policy in the late eighties. I am getting tired of it all being justified and accepted on the basis of some windy statements that all these matters are an on-going process under constant review. That is Alka Selzer kind of language and we have been getting more and more of it when we asked questions about foreign policy. The truth is that we have no position on the international financial institutions by way of philosophy or policy. We have no philosophy or position on trade or on the debt. We have no concept of recognising oppositional forces and we never analyse the impact of international borrowings on the internal structured economics in terms of rights. We are intervening now to guarantee the people who might take a risk, who might buy copper shares in Chile. If the copper mines were nationalised that would be a tragedy and the Irish people would like to know that they will be contributing to bailing out these discontented people, these poor hapless investors who got upset when the people demanded some of what was their own in the first place.
There are a number of principles — but I am not interested in being negative — which could be made. The Minister is correct in saying that this is not the time to discuss the whole question of aid in detail. We may get ten minutes in the next 12 months to do that so we must not burden anybody today in case we take advantage of our ten minutes in advance. I do not agree with much of what Deputy McDowell said but I agree that there should be a co-ordinated approach towards aid. It is very important and there could be an all-party commitment — there is consensus in this regard — towards reaching an aid target over a period of years. We could all agree on that but no response is forthcoming. There is no point in saying that the former Taoiseach, Deputy FitzGerald, rejigged the figures by saying he was talking about the previous year and not the previous five years. I am not interested in riddles. There is a possibility that there would be support from all parties for a continuous movement, over a short period, towards achieving our aid target.
A second point is that our multilateral aid could and should be maintained in conjunction with an examination of international agencies who are receiving it and looking at the pattern of its impact on the poorest in the different countries to which it is going. Very often there is an enormous difference between agency to State aid and agency to people aid. An examination of the funding of water schemes in Africa would give a clear example. No doubt the Minister will answer a question which arises in relation to how all the philosophy in his speech fits in as being consistent with our attitude towards the United Nations development programme? Do we say one thing when we are dealing with the World Bank and another at the UN? Maybe we have two policies and that, being Irish, it does not bother us if they contradict each other.
What about our attitude towards the International Fund for Agricultural Development? What is our philosophy in relation to the International Development Association to which I referred earlier? It is time to come clean in relation to the amount of Irish aid — tied aid — we give because of our existing commitments under international agreements. We should specify the discretionary component of our aid. It is time, equally, in relation to the question of the overall debate to talk about the world financial agencies. As Deputy De Rossa pointed out, we are speaking at a time when most of the imports to the Third World countries have increased in price. There has been a slump in relation to many of the basic commodies being exported by the countries of the south.
It is very clear — and many writers, including Susan George, have said it — that unless there is a renegotiated new international economic order there will be one famine after another. Are we waiting to get our kicks from watching one famine after another shown on our television screens? All the people who examined the causes of world hunger, malnutrition and disease and all the avoidable illnesses — Deputy De Rossa referred to UNICEF — have pointed out the tiny amount of resources which would be necessary to complete a vaccination programme by 1990. They have already pioneered, through ORT and through different kinds of charts and so on in relation to the progress of children, programmes which have saved a number of children. Have they saved babies and children to die as adults in a world that refuses to critically glance at the structure of its trade, aid and debt?
There could be a role for Ireland, which prides itself on some kind of moral authority, to look critically at the structure of these institutions instead of sleep-walking its way through assent in something which, at the end of the day, is working against the peopled part of the world and not towards any kind of philosophy of life itself. We are living in a very contradictory situation, one where the work of the non-governmental organisations and the voluntary contributions of the Irish people are being used to frustrate the official actions taking place in the name of the Irish people. Thus, without a whit of shame, the Minister for Foreign Affairs will say that last year the Irish people gave so much money for aid. He will not bother to break down the amount and say whether it was by voluntary subscriptions initiated by Mr. Geldof or given by the Government. The Minister is not too worried whether it came from the national lottery or if it is under the Estimates for the Department of Foreign Affairs.
I listened with interest to the Minister for Foreign Affairs last week saying that he wanted to nail this canard that there was only a sum of £1,000 in the Estimates for disaster relief. That is the sum mentioned in the Estimates but he is really saying he is keeping a line open and that he can always give more later. Of course it did not seem to matter that it came from the lottery. The people working in the field for aid want to know if the bilateral projects will continue or have they been so structurally damaged by another run of cuts that they will not be able to continue. The people working in different, special projects want to know the future of those projects. We never answer these questions.
A number of principles could and should affect our policies in relation to the Multilateral Investment Guarantee Agency. Now that we have wasted our time discussing MIGA I suggest that there are other interests and principles at which we might look, for example, at our pattern of discriminating support for aid projects and loan applications in terms of whether they satisfy basic economic and social needs.
We should develop a philosophy of support for the eradication of hard core poverty in the Third World. We should look at projects directed at education, literacy and participation and at the whole question of people's ability to take part in affairs governing their country. I gave an example from Chile simply to illustrate that. Chile can look sweet from outside in relation to the literature I quoted, but the experience inside was a life of deprivation, poverty and exclusion for five million people. Is our loyalty in terms of these institutions towards the peopled world or towards international investment? I say "congratulations" to those involved in preparing this. It is the most brazen speech I have heard in a long time and it is extreme in its language on the rights of the free market, liberal economy. I hope nobody abroad reads it because I hope to continue to travel abroad occasionally and I hope, because of its disgraceful language, that nobody will ever be able to quote it to me. The problem is that we no longer think about our development strategy because we do not have one. We say nothing about food and rural development. We do not look at the question of access to markets. There is nothing in any speech I have heard from the Minister for Finance or the Minister for Foreign Affairs about the international commodities market and how it excludes many Third World countries. There is nothing about technological transfers and the way they are weighted in favour of the north. There is nothing at all in relation to a philosophy of debt or, for example, the sale of armaments to the Third World. There is nothing about women, or about ecological and environmental projects and whether they should be favoured when they come before the different international institutions. We are in a time when it is almost facile to look for informing principles for our development policy, and in the absence of a development policy there can be no theory, policy or philosophy of aid. Unfortunately, we can look forward more and more to the little messages that come back in terms of our international obligations and what we are required to do.
I conclude by saying that I reject absolutely the suggestion made in this speech at the point at which I began, that there is support in Ireland, this country, for the philosophy of this speech here, that our role in international lending institutions is one of guaranteeing the risks of foreign investment, of saying as stated here, that it is upsetting for foreign investment very often to be located in countries where there is instability. We have no right to make those remarks. We are not bankers, we are politicians. We are not the international copper company of the world. We are not investing in mines. We are not De Beers. We are politicians. We are supposed to reflect the feeling of the people. You can expect that kind of thing from people who would be investing in South Africa. You do not expect it from people who are elected to this House.
Then we have these trite remarks about having guaranteed the risks of social instability, and in case the peasants got stroppy we would be able to say something else as well. We give a lecture to people who have more courage than we have, politicised decent people who have enough courage to struggle, often against insuperable odds. We give them a lecture. The Minister said, "A favourable investment climate and appropriate policies by governments are necessary too" Who are we to lecture anybody when people are flying from our country through lack of work, when people are homeless and in poverty, when old people no longer look forward to dying in dignity or to proper health care in their old age? Who are we to give lectures on international meteorology? Having talked about the weather instead of economics for years we are now taking to lecturing the world? Maybe the Minister is thinking of not going to Europe but of going on a world tour. He said, "A favourable investment climate and appropriate policies by governments are necessary". Think of the sheer arrogance of that kind of remark. I suppose what is encouraging is that the Minister will not be making this kind of speech so often. It is merely that he considers he has to when issues like the question of our relationship to the Third World, particularly through the joint shared forum of international institutions, manage to surface like a mad mushroom occasionally in this House where we rarely discuss anything of relevance any more.
Then the Minister refers to the International Finance Corporation and I quote:
The IFC's objective is also to encourage direct investment in developing countries and it does this in a variety of ways — it makes equity investments in and gives loans mainly to privately-owned enterprises, it helps develop local capital markets and financial institutions and it offers technical advice to governments on the encouragement of private investment.
So we have taken it on ourselves to look after private investment.