Mary Flaherty
Ceist:12 Miss Flaherty asked the Tánaiste and Minister for Foreign Affairs the Government's view on cancellation of Third World debt; and if it will lobby at EU and world level for this approach. [11365/95]
Ceisteanna—Questions. Oral Answers. - Third World Debt.
The most recent statement of Government policy on this issue was enunciated by the Taoiseach at the World Summit for Social Development on 12 March 1995. The Government acknowledges that some progress has been made in recent years to alleviate Third World debt, but considers that much more needs to be done, particularly for the lowest income countries. A lasting solution to the debt problem is an essential prerequisite for sustained economic and social progress in developing countries. The Government believes that all possible options, including debt cancellation, should be considered.
At present, it is the international financial institutions, notably the International Monetary Fund and the World Bank, rather than the EU, which have the main role to play in the resolution of the debt problem. Ireland is a member of both institutions and we will continue to urge that the issue be tackled and that innovative approaches be considered in order to resolve this serious problem.
Will the Minister of State indicate if there is substantial evidence of major new movement in this area and if the issue will be discussed during the current round of discussions in Cannes? Are there likely to be further initiatives in this area in the near future?
The question of assistance to African, Caribbean and Pacific countries under the Lomé Convention is on the agenda of the Cannes conference. I understand agreement was reached on the eighth round of European development funding for the 77 countries in Africa, the Caribbean and the Pacific. One of the interesting features of the Lomé Convention is that the funding given is based on grant allocation rather than loans. In that sense the funding does not add to the debt burden of developing countries. The Taoiseach in his speech at the World Summit in Copenhagen referred to a suggestion made regarding the possibility of selling part of the IMF gold reserves. He supported that proposal and it has received support from a number of other countries. It is proposed that the proceeds of the gold sales should be put towards alleviating the debt burden of some of the poorest countries particularly in Africa. The matter was discussed also at the G7 meeting in Halifax in Nova Scotia recently, but agreement was not reached on the matter.
As Minister of State with responsibility for development co-operation, the focus here is normally on development aid issues, but the whole question of debt is fundamental to the development of countries in Africa, South America and Asia because the model of development proposed, particularly by the World Bank and by a number of the Bretton Woods institutions, is based on private investment, an expanded private sector and a more efficient market economy. While I consider that laudable, it is difficult to envisage the pursuit of a successful market economy or investment strategy for private investors in a country which is overwhelmed by a mountain of debt. In terms of our participation in the EU Development Council and in the OECD, we have raised on a number of occasions the question of alleviating the debt burden of developing countries in a structured and systematic way, particularly that faced by some of the poorest countries in sub-Saharan Africa because of the severe limitation on their ability to develop their economies whether through public or private sector investment.
I thank the Minister of State for her detailed reply indicating the Government's priority on this issue. In this year when our Famine will be commemorated we will think of the similarity of what happened here during the last century when at a time of great hunger huge resources in terms of the food products and incomes continued to leave the country. Will the Minister ensure that the Government keeps this matter high on its agenda? I accept we are not involved directly in terms of the volume of debt. Does the EU have a substantial debt relationship directly with Africa and will the Minister of State indicate the amounts given by it, America and other donor countries?
A number of organisations, including NGOs such as Trócaire and Concern, suggest that in commemorating the Famine we should reflect on what is happening in Africa, in particular. I am sure the Deputy is aware of the exhibition on modern day famine and food shortages in the Famine museum in Strokestown House, something which will feature prominently in our Famine commemorations.
A number of developing countries owe substantial debt, both bilateral and multilateral, to various European Union countries. While negotiations on bilateral debt have been taking place through the Club of Paris and so on, our aim is to make progress on the debt to multilateral institutions such as the IMF. Negotiations in that regard should take place to facilitate more rapid development of African economies, particularly in the sub-Sahara.
Is the Minister of State aware that in the past five or six years repayment of debt by sub-Saharan African nations exceeded amounts lent by more than $4,000 million and that in such circumstances those countries cannot develop their economies? Will the Government ensure that future loans to such countries are given through the International Development Agency of the IMF and the World Bank rather than through the proposed new facility, in respect of which legislation will go through the House in the autumn?
The Government has made its position clear regarding debt relief, particularly in regard to sub-Saharan Africa. Unfortunately, the Deputy's comments regarding the outflows in terms of debt repayment from the south to the north are correct. If the developed world is genuinely committed to social and economic development in the developing world, as well as addressing the question of aid and other assistance packages it must address the question of debt relief on a bilateral basis and through multilateral international organisations. The proposal regarding the possible sale of gold reserves is one way of resolving the issue. A number of other proposals, such as imposing a small tax levy on international financial transactions, have been put forward. Such mechanisms would relieve Africa's debt burden.