Léim ar aghaidh chuig an bpríomhábhar

Dáil Éireann díospóireacht -
Wednesday, 23 Apr 1997

Vol. 478 No. 2

International Development Association (Amendment) Bill, 1997: Second Stage (Resumed) and Subsequent Stages.

Question again proposed: "That the Bill be now read a Second Time."

An Leas-Cheann Comhairle:

Deputy Gallagher was in possession and has 15 minutes remaining.

(Laoighis-Offaly): Many Members of the Joint Committee on Foreign Affairs support Ireland's contribution to this fund, particularly to small, local credit-type schemes in Africa, but strongly oppose any Irish contribution the enhanced structural adjustment facility of the International Monetary Fund.

I was glad to note the amended Government stance with regard to ESAF, the enhanced structural adjustment facility of the IMF — to which the Minister of State referred this morning — resulting from the many representations received from non-governmental organisations and the many points put to him by the sub-committee on Development Co-operation and the Joint Committee on Foreign Affairs. I was happy when the Government decided not to advance proposals to authorise Ireland's contribution to this fund in advance of the satisfactory implementation of a comprehensive debt relief framework.

In contributing aid we must remember that we are providing certain welcome relief and support measures within a wider global context to alleviate the international debt problem and international trade relations which militate continuously against the efforts of many of the poorest countries in Africa to drag themselves up from the level of poverty into which they have descended to an even keel of economic and social development. Debt is having a disastrous effect on many of the world's poorest countries. While they may obtain help from the World Bank and the International Monetary Fund they must engage in structural adjustment programmes which result in the burdens of adjustment being borne heavily by the poor, those in ill health, the poorly educated and women. Before the world community takes serious steps to address this debt issue, it would not be appropriate for Ireland to contribute to the enhanced structural adjustment facility of the International Monetary Fund.

I support the position advanced by the Government on this fund. While I welcomed the announcement in the autumn by the IMF and the World Bank of an initiative to help the heavily indebted poorer countries I am disappointed at the slow response in implementing it. I acknowledge the work done by senior officials in the IMF and the World Bank in responding to the concerns expressed by the NGOs and their states. Mr. Camdessus took a particularly progressive line. It was amazing how in a short period somebody at the top of such an organisation could say it could not sell gold but was prepared to recognise the debt alleviation strategies it had pursued for some time had not worked and another approach was needed. However, the response has been slow and I am concerned that if the initiative to help the heavily indebted countries is not implemented quickly it will be too late for many.

Since the debate adjourned at 1.30 p.m., Deputy Kitt, other Members and I have had an opportunity to inquire further into this issue. Ireland, in preparation for the spring meeting of the IMF and the World Bank next week, needs to press strongly for speedy implementation of the HIPC initiative. If not, by the end of the century this initiative will not have got off the ground in any practical sense in even the countries which were reckoned to be the first candidates for inclusion, for example Uganda.

Uganda is one of the few African countries which has been prepared to take the medicine the international community has prescribed for it in the past ten years. It was expected that Uganda would benefit from this initiative. The Ugandan Government had proposed to use the resources which would become available from this fund to increase funding to primary education. Only half the children in Uganda attend primary school, and many drop out. On a visit there two years ago I found that parents in poor families were paying up to three-quarters of the cost of primary education for their children while at the same time students in Markerere University were getting full tuition and accommodation costs. When choices had to be made in those families the boys, not the girls, were educated.

I am disappointed Uganda which should be an ideal candidate for relief under this initiative by the international institutions, is being put back. The Ugandan Government had to take the unusual step recently of writing to newspapers in this part of the world expressing its disappointment that having taken the medicine it was prevented from benefiting from the cure.

I am disappointed the executive director who represents our constituency in the IMF and the World Bank, i.e the Canadians, are not pressing for early implementation of this initiative in countries such as Uganda. We form a constituency with a number of other groups and take turns in representing each other there.

In preparing for next week's meeting, I appeal to the Minister to urge our executive director to support the immediate implementation of this initiative. I understand the Canadians are seeking an intermediate period and suggest implementation in 1998. Some of the G7 countries having been forced or shamed into supporting this initiative on debt are trying to drag their feet and delay its implementation until 1999. I ask the Government to urge the Canadians to push for the implementation of that initiative, otherwise it will be too late. If countries, such as Uganda, cannot benefit how will the other 40 interested countries receive help from the fund? In implementing this initiative for the heavily indebted countries the IMF should not be allowed use the Enhanced Structural Adjustment Facility as its contribution. The IMF must be required to dispose of some of its gold stocks, which it has admitted can be done without upsetting world gold markets, and contribute to the trust fund the World Bank has proposed to undertake this initiative on heavily indebted countries. ESAF is not a developmental intervention, it is a financial and monetary intervention.The type of relief needed will be of a developmental nature. At least the World Bank has recognised a special trust fund must be set up. Ireland should urge the IMF to contribute by selling some of its gold stocks and putting money up front for that fund.

I welcome the Minister's comments on opening up the decision-making process in the interventions the IMF and the World Bank make in recipient countries. They are making only limited moves in response to strong pressure. Ireland which has sought greater accountability and openness in the proceedings of these organisations must continue to be to the forefront of those demands.

The participation of debtor governments in the heavily indebted poorer countries' initiative should include involvement by the governments at all stages. In respect of the final stages of the negotiations the Ugandan Government was kept in the dark. The welcome initiative of the HIPC was leaked by the World Bank last year. This is not good enough. Governments, NGOs and the wider society in the recipient countries must be involved at all levels. I want our efforts to be continued.The Irish Government must, in so far as it can, as a direct contributor to the IMF and the World Bank and through our Canadian executive director ensure the definition of "debt sustainability", being adopted by the institutions, is reviewed. Debt sustainability is being assessed using a ratio of debts to exports. We should include human and social development indicators in any assessment of debt sustainability. It has been brought to my attention that a child born in one of these 41 countries today is 30 per cent less likely to reach her first birthday than the average for all developing countries where a mother is three times more likely to die in childbirth. Uganda is spending $175 million on debt repayments but only $120 million on health and education.The debt repayments exceed by a considerable factor the amount available to that Government to spend on health and education. The door is not being slammed in the Ugandan's face but it is not being opened to them in a welcome fashion. Countries such as Uganda and Bolivia need priority treatment but the indicators used to measure their performance must include those which look at progress in social infrastructure, education, training, women's participation in society, the economy and health.

During the past three years when the Sub-Committee on Development Co-Operation of the Joint Committee on Foreign Affairs addressed this issue we found successive Ministers and officials open to considering our views. Through the efforts of the sub-committee, in consultation with the Minister of State, Deputy Burton, and the Minister for Finance, Deputy Quinn, we managed to make progress in moving the Department's position on the ESAF question. Whenever we asked the Minister to come before the sub-committee to discuss Ireland's position at the IMF and World Bank meetings we had no trouble. I would like that arrangement to be put on a formal footing. To ensure openness and accountability on Irish policy in the IMF and the World Bank a regular arrangement should be made whereby a report of the institution's spring meeting and the AGM in the autumn, and the policies promoted by Ireland at these meetings, would be submitted to the Sub-Committee on Development Co-Operation of the Joint Committee on Foreign Affairs for consideration. In the past three years we have made much progress in opening up the process here. That type of standing arrangement would ensure that those who have an interest in this area can remain convinced that Ireland is adopting a progressive approach in this regard.

We can make an important contribution as a link between the needs of the developing world and the needs of the northern hemisphere. In the period before and since our entry to the EEC we had to undergo structural adjustment. Our towns lost traditional industries and for many years they waited to benefit from the economic upturn promised by membership of the EEC. However, at least we were given a long period of adjustment and strong financial support and Structural Funds to help us make the adjustment. We were also given long derogations from the most rigorous impositions which participation in the single market would bring.

Ours was a relatively developed country when we entered the European Union. Since we benefited from a long period of adjustment, significant financial and structural support and a long period of time to get our economy and society ready for the demands of free trade and a more liberal market, we should argue for greater supports and allowances and longer derogations and periods of adjustment for countries in the developing world which are starting from a much lower base, a base which could not be contemplated here. Those countries are being asked to adopt debt initiatives and structural adjustment programmes in order to comply with the freer trade regime which has been brought about by the world trade organisation and GATT. They are being asked to make those adjustments in a short period with little support, so we should continue to be a strong advocate of their case.

We have been effective in this regard in the European Union. Although our voice in the IMF and the World Bank is relatively weak, we should continue to use it. The case we make is listened to in those institutions, and the example we give encourages public representatives and NGOs in other northern countries to press their governments to change their policies in that regard. If we continue the policy adopted in recent years by the Minister and his Department, in consultation with our NGOs, we can ensure that countries burdened with a debt problem who cannot even get on the first rung of the development ladder will have an advocate and will receive a response from richer countries.

I support this Bill. An additional £13 million is badly needed for overseas development and the Government is to be complimented on the hugely increased amount of money it is providing. The sum has increased from £44 million in 1992 to £122 million in 1997. I doubt that any developed country has increased its contribution to overseas development to such an extent. Our contribution represented 0.16 per cent of GNP and it now represents 0.31 per cent. We are approaching the goal of 0.7 per cent of GNP which was laid down by the United Nations. There has been considerable growth in recent years and we should be proud of the Government's work in this regard.

I am disappointed that one country, North Korea, was omitted in the Minister's statement, in view of the famine there at present. It behoves us to bear in mind that every country in need should be given assistance. Have we pledged specific moneys for aid to North Korea, a country which is seen as an adversary by many countries? It is a diehard communist country, one of the last such regimes in the world. It is militaristic to a frightening degree and is in possession of nuclear weapons. However, the country was struck two years ago by a natural disaster and reports from international news agencies indicate that tens of thousands of people have already starved to death. Its situation has not improved in the meantime and remains serious.

I wish to pay tribute to Irish aid organisations who have done and continue to do incredible work which we probably do not fully appreciate. Some of the men and women who have gone to developing countries have sacrificed their lives. Most of them have sacrificed well paid career opportunities in this and other developed countries.It has been a labour of love and they deserve our gratitude and that of the people in the countries where they served.

We should consider a more elaborate system for placing personnel in countries where their expertise is badly needed. The missionary zeal of the Irish race has never been found wanting. However, that zeal has not been maintained in its original form. Previously, missionary zeal consisted of priests, nuns, christian brothers and other clerics going to all corners of the earth and assisting the poorer communities in those countries.With the reduction in vocations, that system has largely petered out. However, that does not mean there are not many young, and not so young, men and women here who are still anxious and have the vocation to help the most needy. We should be able to devise a system, with the assistance of the European Union, similar to that of the Peace Corps of the United States in the 1960s. People who wish to assist their less fortunate brothers and sisters throughout the world should be given every opportunity to do so whether it is by way of sabbatical leave or financial assistance from the European Union.

A person cannot visit an underdeveloped country without people in authority speaking of the magnificent work which was done over the years by Irish missionaries, teachers and medical personnel.They admit their countries have progressed as a result of the educational facilities which were provided. They tell of the lives that were saved due to the work of Irish nurses, nuns and teachers. It is a fantastic achievement by this country and people at home do not appreciate it. We should endeavour to have that work done in a more organised and co-ordinated way. We should get the European Union involved in ensuring that the thousands of Irish young people who are anxious to help can do so. People today are as genuine and good as they ever were and we should give them the opportunity to go abroad and help people who are in need. Our progress in overseas development has been tremendous and the Minister and the Government deserve our compliments.

I thank the Members who participated in this debate. Deputy Michael Kitt expressed the view that loans might not be appropriate for many poorer countries and that grants might be more helpful.

IDA loans are among the softest available. They are repayable over long periods, in the order of 30 years; there is a moratorium on capital repayments for a period of approximately ten years and an interest rate of 0.75 per cent. They are as near as one can get to grant aid. Deputy Kitt said the countries receiving loans should not be overburdened unnecessarily by restrictions and conditions. I take his point.

On the issue of arrears, practically every speaker expressed disappointment at the position adopted by the United States. I understand, however, that it is bringing its affairs up to date and will participate fully in 1998 and 1999. That is to be welcomed.

The NGOs have been lobbying to have debts written off. Deputy Kitt mentioned the huge amounts owed in debt repayments by some sub-Saharan African countries alone. This is a contentious issue. The problem is that in writing off debts one creates awkward precedents for the World Bank and lenders who expect to be repaid at some stage. On the other hand, there is no point shackling countries which have no prospect of repaying outstanding debts. We have been to the forefront in pushing some of the larger countries into confronting this problem. Now that the IMF and the World Bank have put a programme on the table — the debt initiative — it behoves member countries to deal with it as quickly as possible. We are encouraging them to move in that direction and will do so again through our representative at the meeting due to take place this weekend.

Deputy Kitt laid emphasis on the evils of child labour and exploitation. I take his points.

The selling off of IMF gold stocks is an emotive issue. The NGOs and those concerned about what is happening in many parts of the Third World regard it as unacceptable that the IMF is hoarding a colossal stockpile of gold. It is the IMF's position, however, that one does not sell off the family silver which needs to be saved for a rainy day. The admission that it is possible to do this in an organised way without upsetting world markets is a significant move in the right direction.

Deputy Kitt referred to the drugs trade and suggested the west has to take some responsibility for the way the production of drugs has led to gangsterism and profiteering in many poor countries.He mentioned that Uganda is not receiving the level of support it believes it is entitled to receive in view of its good record and the structural changes which have been made.

I have noted Deputy Connor's views which were eloquently expressed. He said that, as we clap ourselves on the back for our efforts in providing overseas aid, the problem in many cases is getting worse. He alluded to the fact that in underdeveloped countries education is the exception rather than the norm, that infant mortality rates can only be described as disgraceful, that it is rare to find clean water, that health services which we take for granted here are non-existent and suggested that this is something we cannot continue to accept. He said it is unacceptable that many of these countries are required to repay more than they are taking in and devoted much attention to the wonderful work of NGOs which are doing an exceptional job.

Deputy Connor referred in particular to Zaire where he foresees the beginnings of a new era following many years of dictatorship and corruption on the part of the Mobutu regime. He suggested Zaire should receive priority given its location in a critical position in sub-Saharan Africa to ensure its economy continues to grow and develop.

Deputy Connor praised the Government for the progress made in achieving the target which has been set of 0.7 per cent of GNP. The figure currently stands at 0.31 per cent. The Leader of the Opposition stated recently that it was his intention to provide a further £50 million. The effect of this would be to increase the percentage above 0.4 per cent. That would be a significant development. He did not explain, however, where the money would come from but his heart was in the right place and I support the concept.

Deputy Connor spoke eloquently about the commitment of the Irish people to supporting underdeveloped countries. He mentioned the work of our missionaries, that we do not have a colonial past and that it was the strong view of the Irish people that the Government should be generous in this area.

Deputy Gallagher expressed strong support for the work of IDA in poverty striken countries. He also supported the Government's position on ESAF and its decision to withhold our contribution until progress is made on the debt initiative.He spoke eloquently about the benefits to be gained from local initiatives. He expressed disappointment at the progress of the debt initiative and asked the Government to push Canada, which will represent us next week, to move it forward.

He also referred to the experience in Uganda and its very heavy debt repayments. He said that even though that country had adhered to the requirements of prudent management of its economy and the structural changes required for progress, there is still a severe shortage of resources to fund education, health and other programmes and the very heavy debt repayments ought to be alleviated.He said the definition of "debt sustainability assessment" should be changed to take account of the problems of very poor countries and asked that the excellent informal reporting arrangements between my Department and the Sub-committee on Development Co-operation and the Joint Committee on Foreign Affairs should be formalised so that there would be at least a twice yearly report on the activities of the World Bank, the IMF etc., our policy positions and how we implement policy. I will bring these matters to the attention of the Minister for Finance.

Deputy Deasy referred to North Korea. This country is not covered by the Bill and has not in the past been a primary target of the ODA programme.In many ways the urgent problems highlighted by the Deputy are matters for the Red Cross and real emergency aid. I did not expect Deputies to refer to North Korea but I take on board the points made. While we need to focus on countries in Sub-Saharan Africa which deserve our support, we need to be aware of emergencies of the type referred to by the Deputy.

The Deputy spoke eloquently about the overseas voluntary work done by missionaries, professionals, doctors, nurses and NGOs. We are all proud of the work done by them. I thank the Deputies for their contributions.

When I referred to the sale of gold stocks I referred to 10 per cent of gold stocks as recommended by the Subcommittee on Development Co-operation. I hope the Minister will be successful in urging the sale of some of these stocks.

Question put and agreed to.
Bill put through Committee, reported without amendment and received for final consideration.

I move: "That the Bill do now pass."

I thank the Opposition for facilitating the speedy passage of the Bill through the House and my officials for their help.

Question put and agreed to.