Dáil Éireann díospóireacht -
Thursday, 11 Dec 2003

Vol. 577 No. 1

International Development Association (Amendment) Bill: Second Stage.

Minister of State at the Department of Enterprise, Trade and Employment (Mr. M. Ahern)

I move: "That the Bill be now read a Second Time."

This is a short Bill on an important institution. The International Development Association, or IDA, is the World Bank's concessional lending window. It provides grants or long-term loans at zero interest rates to the poorest developing countries. The Bill will make provision for the payment of Ireland's share of the amount agreed at the IDA 13 replenishment discussions. Ireland pledged a contribution of €50 million payable over six years, subject to the approval of the Dáil. Today I seek that approval.

In line with the IDA's principal mission to reduce poverty in the world's poorest countries, a country's per capita income must be below US$865 to be considered eligible for IDA assistance. Above that limit other sources of funding should be available. In Ireland, the initials IDA are better known for another public agency, also with important development functions, but Deputies will be interested to know that, across much of the developing world, the initials IDA mean the concessional loans and grants from this different specialised agency.

The International Bank for Reconstruction and Development, or IBRD, which is better known as the World Bank, was established in 1944. It is one of the family of Bretton Woods institutions which were created for post-war economic and financial reconstruction. After the success of its first task, to rebuild a war-shattered Europe, the bank turned its attention to the developing countries, where there was deep and profound need for economic and social development.

As the 1950s progressed and many countries, such as Ireland, achieved economic progress, often using borrowed funds to support industrial development, it became clear that the poorest developing countries could not afford to borrow the money they needed for development on the terms offered by the commercial banks or even the World Bank. They had very great needs but little ability to pay. They required access to money on easier terms.

With the United States taking the initiative, a group of bank member countries decided to set up a new institution which could lend to very poor developing nations on highly concessional terms. They called that agency the International Development Association – IDA. The then US President, Dwight D. Eisenhower, who had seen both the devastation of Europe and the success of its post-war reconstruction, proposed that IDA should be part of the World Bank family of institutions and other countries agreed to this. The IDA's initial articles of agreement became effective in 1960.

The first IDA loans were approved in 1961, to Honduras, India, Sudan and Chile. Since 1960, the IDA has lent more than $135 billion to the poorest states. Its founders saw the IDA as a way for the haves of the world to help the have-nots. Today, the IDA lends, on average, about $6 billion to $7 billion a year for different types of development projects, especially those that address peoples' basic needs, such as primary education, basic health services, clean water and sanitation. The IDA also funds projects which protect the environment, improve conditions for private business, build needed infrastructure, and support reforms aimed at liberalising countries' economies. All these projects pave the way towards economic growth, job creation, higher incomes and a better quality of life.

A way for the better-off states of the world to assist the weaker ones remains the IDA mission today. However, the founders also wanted the IDA to be imbued with the discipline of a bank, not least so that borrowers would be able to adopt the discipline of working with other financial institutions. One challenge which is still with us today in addressing the great needs of IDA clients more effectively and efficiently is to develop suitable mechanisms to pool knowledge and harmonise requirements with the other multilateral institutions, within and without the Bretton Woods group of institutions, the bilateral development agencies, and the clients.

Much of the effort of the IDA is concentrated in Africa, the site of some of the most intractable problems in the world at present. At current rates of population growth, sub-Saharan Africa will grow to more than one billion people by 2020, despite declining birth rates and the increasing number of deaths from AIDS. Both the IDA and the World Bank have had a huge impact on fighting the problem of HIV-AIDS, the greatest heath problem of our era. The World Bank and IDA are the largest investors in AIDS projects of any institutions in the world.

The need for AIDS-related funding is continually expanding and is one of the reasons this Bill arises now. The HIV-AIDS pandemic has killed 23 million of the 63 million people it has infected to date and left 14 million orphans worldwide. It has left countries in Africa in particular without many of working age. It has killed care-givers and teachers. Africa faces continued loss of human capital and life with severe impacts on economic growth. In some countries, life expectancy has been cut by up to ten years due to the HIV-AIDS crisis. The IDA supports multisectoral efforts which aim to ensure co-ordination with other multilateral and bilateral donors in providing a platform for addressing the pandemic. Africa's development issues are complex and interwoven. The IDA continues to examine these issues systematically and seek ways to respond in a flexible and timely manner.

Conflict has imposed a large cost on African countries, both in human and economic terms. Alongside efforts to address its key determinants of poverty, unemployment, and low education levels, the IDA has begun to examine how best to contribute to the reduction of conflict in the region. Ways to re-engage with and redeploy IDA resources to countries emerging from conflict are being actively pursued. In addition, IDA has stepped up its involvement in countries' efforts to improve governance and ensure greater political participation.

While the mission of the International Development Association remains the provision of soft money to the poorest countries, there will always be need for periodic inflows of new money from those countries, including Ireland, which are prepared to inject capital into the IDA. This is a much smaller group of countries than the 184 countries that are in membership of the World Bank. The IDA is funded largely by contributions from the governments of the richer member countries. Their cumulative contributions since 1960 are about US$109 billion. More money is needed for the IDA every three years to replenish its funds. Funding for the 13th IDA replenishment will allow the association to lend about $23 billion, of which donors' contributions will provide a little more than half. The remaining funds come largely from reflows of previous IDA credits, as well as other non-donor resources.

Periodic replenishment of IDA resources is inevitably the product of long and complex discussions, not only about the capital needs but on other issues such as the future operation of the institution. The agreement for the 13th replenishment of IDA includes two major changes to which I wish to refer: the conversion of loans to grants and the establishment of performance standards.

Regarding this issue of loans vis-à-vis grants, in July of 2001 the USA proposed that the World Bank and other multilateral development banks replace up to 50% of future lending to the world's poorest countries with grants. This proposal was controversial with many IDA donors and some borrowing countries concerned that the loss of loan reflows would hurt the long-term viability of the IDA program.

Without significant new commitments from certain major donors being in prospect in future replenishment discussions, future IDA activities might become difficult. In short the money going out through grants would not come back in through repayments and it might not come back through new donor commitments either. While the need for aid was never more necessary, obtaining international commitments from some non-EU states to support future IDA needs for resources will be likely to prove difficult.

The need for funds for other aid projects, such as the reconstruction needs of Afghanistan or more recently Iraq, create competing calls for the scarce international resources being committed. Other donors fear the broader use of grants would create an unhealthy dependency on foreign aid and hinder the development of international creditworthiness.

In July 2002, the IDA donors eventually and in some cases reluctantly agreed to a complex plan to convert 18% to 21% of future IDA loans to grants. Under this plan, IDA-only countries will receive 100% of their assistance for HIV-AIDS and natural disaster reconstruction projects on grant terms. Post-conflict and debt-vulnerable countries with a per capita income of less than $1 per day will receive 40% of their assistance on grant terms separate from and in addition to HIV-AIDS or natural disaster funds. All other countries with a per capita income of less than $1 per day will receive 23% of their assistance in the form of grants, again separate from and in addition to programmes to deal with HIV-AIDS and natural disasters. It is as yet too early to assess this change, which is only in its earliest stages.

The introduction of a framework for measuring results was another innovation of the IDA 13 replenishment arrangement. The objective is to better assess the effectiveness of IDA programming in contributing to key development outcomes, including those reflected in the millennium development goals, MDGs, and in the growth agenda underpinning these goals. The IDA 13 arrangement called for the development of a system that reflects country priorities, links to the MDGs, and assesses the IDA's contribution to development results. The Irish have been generous in dealing with requests for measures to assist others less well off than ourselves in the past and I have no doubt that House will wish to follow that path today. I commend the Bill to the House.

Mr. R. Bruton

I support the introduction of the Bill to the House. It is a worthwhile programme but I wish to comment on the general context of development aid and this area itself.

The Government has set itself a target of achieving a level of development aid of 0.7% of gross national production by 2007. While some progress was made between 2000 and 2003, it has been arrested this year. If the Government's target for 2007 is to be taken seriously, we are now well past the half time-mark to achieve it, yet we have only a quarter of the target movement achieved. Therefore, we still have to achieve three quarters of the Government's commitment to raise aid between 2000 and 2007. I am concerned that this year the apparent tightness in Government finances resulted in an end to the progress which had been evident in making greater commitments to development aid.

If the Government is serious about its commitment, the Minister must make a firm strategy statement regarding how it plans to achieve its target for 2007. Some agencies in the field are concerned that the move in 2004 to stop in its tracks the slow progress that was being made means that the Government is rowing back from its commitment. It would be encouraging to hear the Minister of State indicate, on behalf of the Government, that the commitment remains firm. The agencies to which I refer could then rest assured that, in light of a multiannual framework, they could build on the basis of growing contributions from the State.

There is clearly a case for making this contribution and for achieving the target the Taoiseach has set. However, Ireland has an important strategic role to play in terms of ensuring that other countries honour their commitments. Ireland will play such a role next year when it holds the EU Presidency and it is regarded, in view of its non-colonial past, as being an honest broker. I was disturbed by some of the material provided by the World Bank to the effect that there has been a collapse in the level of aid being given by other states to meet development needs in recent years. It appears that countries are rowing back on their commitments. It is important that Ireland not only reiterates its commitment and puts in place a strategic plan to achieve it, but also seeks to use its considerable international influence in respect of this matter.

Ultimately, it is in everyone's interest that we build a more stable world with less poverty. Such stability must be built on everyone having a stake in the success of world economies and social development. There is clear evidence that, in the past two years, the sense of global determination to address poverty has fractured as other concerns, particularly those relating to terrorism, have entered the arena. While the issues are not linked, the Government needs to continue to focus the important strategy of addressing world poverty which was evident in the development of the millennium development goals but which appears to have lost its momentum since the heady days when those goals were set.

Any contribution to the World Bank and the IMF, raises questions about the policies these agencies pursue in developing countries. I am out of touch with the sort of policies that are being pursued. However, some years ago I did some work in the former CIS countries and I was staggered by the simplistic formula the World Bank and the IMF seemed to apply to states which, in the instance to which I refer, were seeking to shake off the shackles of a communist regime. They had a simplistic and blind faith in neo-classical economics which, I accept, may well be geared towards countries with good infrastructures and institutional bases. However, running hard on issues such as privatisation, opting immediately for market-based pricing without having serious regard to the effects on the society involved, and pushing for capital market and free market liberalisation at a furious pace, was questionable. To a large degree the World Bank and the IMF were trying to apply thinking that had developed in a different climate to countries which needed to have their institutions evolve rather than, in a sort of crash, bang approach, having what existed previously destroyed and replaced with something entirely new.

What we were faced with in the instance to which I refer were bright-eyed and bushy-tailed people trying to tell countries how to change. Suggestions from the IMF or the World Bank regarding what changes should be made carry quite a weight because, at the end of the day, these organisations write the cheques. A person I knew, Joe Steiglitz, came out at one stage with a trenchant criticism of the way the World Bank had put together its policies in many of these countries. From my limited experience, I understand the thrust of what he was saying about the simplistic, one size fits all approach that was adopted during the period in question.

I hope the World Bank has made substantial moves away from its previous position. Looking at its website, I was encouraged to see that it appears to be adopting a more holistic approach to the societies it is trying to help to develop. It is important that the Minister, on behalf of the Government, take every opportunity to try to ensure that the policies pursued, while not tolerating some of the corrupt practices that are evident and institutionalised in some developing countries, including some of the former CIS states, must be sensitive towards the sort of structures that are capable of being redesigned and of continuing to work successfully. The pace of policy change must be judged in a way that is coherent and does not create excessive pressure on the weakest, which has all too often been the case, in the societies to which I refer.

Many people are concerned about the success of the initiative for highly-indebted countries. There is a fear that this initiative, while welcome, has focused too much on a bankers' interest approach to debt problems and has not concentrated sufficiently on the needs of countries. I am interested in whether the Minister of State believes there is scope for tilting the emphasis within the HIPC initiative away from the traditional bankers' approach and towards a more developmental approach. The Minister of State referred to the US initiative of trying to move more substantially towards grant aid rather than debt aid. Perhaps a similar shift in emphasis could be applied in respect of the highly-indebted countries.

I read a report on the IMF website entitled the Impact of Debt Reduction under the HIPC Initiative on External Debt Service and Social Expenditures. The report records that there were significant reductions, approximately 30%, in debt service for some of the most indebted countries. One of the overall targets was to increase social spending as a result of the restructuring and this was secured in the case of Latin American countries which are at the upper end of the scale in terms of countries in severe difficulties. As far as African countries are concerned, however, spending on social programmes remained doggedly at just 5% of GDP and unchanged in the years when this programme of debt reduction was applied. This suggests that the programme is probably doing more good for those who are at the upper end of the scale and lifting those which are able to lift themselves, while leaving the countries with the greatest difficulties to struggle.

It is alarming that these states devote just 5% of GDP to cover all social programmes. We would criticise the Government if it spent only 8% in the area of health. That is not to mention what is spent on education, housing and the various other areas. The countries to which I refer have tiny GDPs and the squeeze on social spending in their jurisdictions is clear, despite the impact of the HIPC programme. As it continues to commit to its development aid targets, I hope the Government will be able to exercise influence on the policies to which I refer and ensure that they are replaced with more inspired policies.

By and large, I welcome the introduction of the Bill. It is important that Ireland should continue to support this initiative. The IDA is a significant player in many of the most worthwhile programmes and I am sure it is a useful influence in terms of the way policy is developed. I hope Ireland will use its voice in these agencies to promote a more positive developmental approach in this area than has been sadly evident in recent years.

It is alarming that the HIPC initiative, which was supposed to be one of the leading edge initiatives introduced for disadvantaged countries, is now spending less than it did in 1995. This agency is receiving a bigger share of the cake than heretofore, yet it is spending less than it did in 1995. The evidence suggests we are moving too slowly, some would say we are going backwards, and that the need for momentum has never been greater.

Ms Burton

I welcome the brief discussion on this Bill and call for a degree of accountability and transparency from the Department of Finance, particularly the Minister for Finance, on Ireland's participation in the Bretton Woods institutions, in the context not just of our domestic role as regards Ireland's interest in them but in terms of our role in its development policies.

There has been ongoing criticism of the Industrial Development Association and other international monetary institutions in regard to developing countries. While the World Bank has undergone a degree of reform that is not only overdue but welcome, it has a long way to go. While a number of UN agencies to which Ireland, in the context of a rising aid budget, is now a significant contributor have undergone a level of reform, they have a long way to go in terms of the tide of human misery which besets the developing world and in terms of the unfairness in trade and the international framework which bedevils the developing world.

There has been all-party consensus on growing the Irish aid budget. Nonetheless, there is no room for complacency on our part in terms of the programmes we support and the effectiveness of our actions in regard to those programmes. When in Cancun, the Taoiseach, the Minister for Foreign Affairs and various members of the Irish Government solemnly reaffirmed Ireland's commitment to reaching the 0.7% goal for the development aid budget by 2007. It might be helpful if everybody now acknowledged that this particular target, in terms of budget 2004 and the Estimates, has in effect been abandoned by this Government.

There has been a clever public relations focus on our commitment to development. While the budget, in absolute terms, is rising, the Estimates show we are at a standstill in 2003-2004 in terms of our commitment to development. That is reality. The year-on-year increases are, however, important and welcome. It is equally important that they are well spent.

I have spoken before of my reservations about Ireland simply signing blank cheques for UN agencies and, in this case, for the IDA and the Bretton Woods institutions. I do not think the poorest people in the world, particularly those in sub-Saharan Africa, are well served by the hands-off approach the Minister for Finance has chosen to take to the Bretton Woods institutions in respect of Ireland's contribution to IDA, HIPC and other initiatives.

Good arguments have been made – Deputy Bruton referred to some of them – that our decision to sign up to HIPC was a bad one. Subsequent events have borne out the position I and others took that HIPC lacked ease of access for the poorest countries in the world and was subject to conditions they could not meet. Those who framed the initiative knew that, hence the understanding referred to by Deputy Bruton.

It is a shame that, in terms of political cant and hypocrisy, the poorest people and the poorest Governments on the globe should have vast pots of money trailed under their noses by this and other Bills when, in fact, much of that money will never be drawn down on a timely basis when it is most needed. That is reality. All the grand global conferences will not make a difference to the female children who will never attend school, to the villages that will never get water and the patients who will never be treated for AIDS. For instance, we cannot deliver on relatively simple objectives such as treating expectant mothers with drugs that would prevent the onward transmission of the virus to their babies. The number of such programmes is lamentably small compared to the needs which exist in sub-Saharan Africa.

I salute former Presidents Carter and Clinton who, in their retirement, have tried to highlight this issue. It is an absolute shame and a disgrace that we are signing up to another large tranche of money while real delivery, in terms of needs on the ground in Africa, is pitifully small.

There are a number of issues which the Irish Government needs to flag. The Minister has not yet told this House the outcome of the discussions in Cancun on the poorest farmers in the world and their access to markets. We have never properly debated the outcome of those discussions.

Mr. M. Ahern

There was not an outcome.

Ms Burton

The Minister of State needs to listen to what I have to say. These are issues of life and death for many on this planet. I do not accept that what the Government is doing is sufficiently accountable or sufficiently transparent.

Ireland will take up the Presidency of the European Union in January and may take on responsibilities in regard to the EU constitution. Up to now development issues have had an integrity in the European Union and have not simply been subsumed in wider foreign policy and military concerns. In the ongoing constitutional discussions the role and integrity of development aid, genuinely assisting poverty reduction in the poorest countries in the world, should not play second fiddle to a wider militarised European Union agenda. That important issue cuts across the debate on neutrality. It relates to the integrity of our and the European Union's approach to development issues, which should not be specifically linked, as some from a right wing agenda in Europe are suggesting, to wider issues of European Union political, diplomatic and, above all, military considerations. What will Ireland do, during its Presidency of the EU, in that regard?

I also want to address the reforms in the World Bank, with particular reference to poverty reduction and support credit, so-called PRSPs. I draw the attention of the House to a number of Irish NGOs, particularly Trócaire, Concern and the Debt and Development Coalition Ireland, that have, along with the Harvard-based Bretton Woods project, analysed the effect of these new strategies. Deputy Richard Bruton referred to his experience in the CIS. I worked in Tanzania for three years in the 1980s and had the privilege to be there when men with briefcases arrived from the IMF. What did this mean for the structural adjustment programme? The school, health and water budgets were savaged as the men from the ministry cut the things that make a country function for ordinary people.

I am sorry the Minister for Finance is not here as we have discussed this matter on a number of occasions. In his lovely right wing way, he seems to think that a little bit of toughness can sometimes be good for people. He seems to think that if one is brought up with no education and no access to medicine or fresh water, it will make one a stronger person. That is rubbish. If someone in Ireland has an expectation of access to education, clothing, medicine, shelter and clean water as being among the basic norms by which we describe a functioning economy that looks after and gives life opportunity to most of our people, why should we adopt different criteria when it comes to sub-Saharan Africa?

Most of the bank's new programmes have been put in place in Uganda. While an intense critique of Uganda and its Government is ongoing in Ireland, particularly regarding what has happened in the Congo, I do not want to talk about this at this time. The Ugandan Government gets five stars in all IMF evaluations regarding its efforts at poverty reduction and the bank has used Uganda as a model for its poverty reduction and support credit schemes, but I am disappointed at how much real difference it has made to poverty reduction on the ground.

Garret FitzGerald established the Irish aid programme 30 years ago. A succession of Ministers of State at the Department of Foreign Affairs, including Deputies O'Donnell, Kitt and I, have, in a non-partisan way, sought to make the Irish programme effective. I am deeply disappointed that the Department of Finance has failed to bring Ireland's critical voice and contribution to some of the bank's programmes and point out what they are doing in countries like Uganda. These programmes are now dressed up as reform programmes that offer poverty reduction strategies. For example, the bank has sought to address the water issue. However, it comes with ideological thinking that could have come straight from the Chicago School of Economics. The water system in Uganda is to be privatised and people will have to pay water charges.

Disastrous structural adjustment programmes have taken place in Uganda. Schools were closed all over the country and girls, in particular, were removed from education. In a family with six or seven children, the boys will be sent to school. To its credit, the Ugandan Government has reinstated large elements of relatively free or cheap access to primary education. It has been one of the big successes in recent years. When clean water schemes are put in place, why does the bank, with its stupid right wing frame of mind, insist that the network should be privatised? It does not make sense.

I also want to draw attention to the bank's cost structures. Devesh Kapoor, who works in Harvard, is seeking to reform the bank through the Bretton Woods project. The bank's administrative budget is approximately $1.2 billion, which also covers countries other than developing ones. Client services account for less than half the overall budget while expenditure on the corporate secretariat amounts to more than two-thirds of what goes on lending. The rest reflects majority shareholder driven mandates, either directly or through the so-called stakeholders. The bank is spending much of its money on corporate structures and overheads, and having its western experts travel around the globe. The bank's strategy at local level on poverty reduction means that NGOs and local groups are to be the driving force evaluating what a government in a Third World or sub-Saharan African country does. However, the expenditure of resources is concentrated on headquarters. I do not know that Ireland can stand over signing blank cheques for such administration. The same also applies to the cheques we are giving many UN agencies. In many cases, bank structures and UN agencies are the only way of delivering certain types of benefits to countries. Nonetheless, we must retain a critical voice as to how this money is spent; every dollar spent on headquarters is a dollar taken from the world's poorest people. We are entitled to get an answer from the Department of Finance as to how it evaluates and keeps watch on what the bank spends on administration vis-à-vis developing countries.

I now turn to local structures. These are correctly supposed to be critically important to poverty reduction. When one goes into a clinic or school in Tanzania, Malawi or Uganda, one is supposed to be able to examine its budget for the year. One is supposed to be able to ask the director or principal how he or she is spending the money. What resourcing is given to those local groups? What status have they been given? The bank is happy to cloak itself in local participation. However, as with partnership structures in Ireland, cloaking itself in local participation means that such structures must be supported. Whether the local university is carrying out more critical and technical evaluations or this is being done by local community structures, they must be supported. In most parts of the Third World, people have to work hard to make a basic living for themselves and their families. If they are not assisted in this evaluation, it simply amounts to window dressing adopting the language of popular participation and community evaluation without having any substance to it.

When I worked in the university in Dar es Salaam, the men from the bank – they always were men in those days – suggested that the university could cut its student numbers by a certain percentage. We know the formula in Ireland for social welfare cuts. Anger over the 16 social welfare cuts is high among social welfare recipients. How much higher is it among the poorest of the poor in developing countries and those servicing the front-line institutions, primary schools, clinics and hospitals?

When we debate this issue next year, I would like the Minister for Finance and his officials to state perhaps five areas that were targeted for strategic improvement as a result of Irish participation in the preceding year. The first might include the resourcing of the local evaluation and participation process in drawing up plans. This should be made a reality and not just a matter of public relations. A second area that should be targeted and reviewed severely is that of headquarters' costs of the banks and institutions. As I said, a dollar spent in headquarters is a dollar taken from the poorest countries.

The United States has a strategic veto and is engaged in a series of military initiatives which I hope will not last long and which I hope are an aberration in the country's history. They have incredible consequences for those in Iraq, Afghanistan and other countries. The US is effectively vetoing positive reform of poverty reduction on the ground.

Let me give some examples of people speaking with forked tongues. What is one supposed to do in respect of poverty reduction? One is supposed to reduce military expenditure. However, given its strategic military overview, the United States is very anxious that particular allies spend money on military items. Expenditure on military hardware by Pakistan is high, yet it has an unfortunately high number of people with no literacy capacity whatsoever, particularly women. These are tricky issues for the Department of Finance to raise, but it is important that it does so.

The fourth area where targeting is necessary concerns our upcoming EU Presidency. In the ongoing discussions on the new EU constitution, there is a view that the development budget of the European Union should become more geared towards its diplomatic, political and military aims. Until now, the issue of development co-operation has occupied in the Union a space of relative integrity, free from direct political, diplomatic and military considerations. During the Presidency, the Government should encourage a discussion on the role of development moneys within the Union and ascertain how we can ensure the EU constitution will remain focused on poverty reduction and capacity building in some of the poorest countries in the world. If we manage to do so, it may, in the longer and shorter terms, be the best way to enhance the diplomatic and political aims of the Union. If we focus our development assistance co-operation programmes on democratic reform, access to social capital in education, housing, clean water and basic primary health care, this in turn will enhance enormously the prestige of the Union.

Deputy Michael D. Higgins stated that, in the context of the conflict in the Middle East, the long-term EU focus on assisting the development of a properly resourced Palestinian state remains a very important contribution to the peace process in the region. Unfortunately, the US Government has not enhanced this process.

This debate presents an opportunity to reflect on what the Government has been doing regarding development. Our overall development programmes are, for the most part, good. More imagination could be used in developing new programmes and expanding existing ones. Our voice could be heard at a much more serious and sustained level in respect of development policies. The recent DAC report on Irish aid awarded very high marks for poverty reduction programmes, etc. However, as we are now allocating much more money to Irish NGOs, UN agencies and banks, we lack sufficient mechanisms to monitor what those bodies do with it. For the most part, Irish NGOs, with which I still work very closely, have an excellent record, but everybody benefits from continuous evaluation and feedback on how well his objectives are realised.

Mr. F. McGrath

I wish to share my time with Deputies Boyle and Ó Caoláin.

An Ceann Comhairle

Is that agreed? Agreed.

Mr. F. McGrath

The International Development Association (Amendment) Bill 2003 is about poverty and the wealthier countries assisting countries in need. It is also about sharing wealth and moving towards equality, justice and true democratic principles. Above all, it is about doing something practical and positive for poorer states.

I welcome this debate, which gives us all a chance to deal with poverty and injustice throughout the world and to speak up for the countries that are not being served well by the more wealthy states. Wealthy states have a duty and responsibility to assist poorer countries. Ireland has a long and interesting record in terms of international humanitarian famine relief and peacekeeping. Those who say Ireland sits on the fence or that it is squeamish on foreign policy issues should be told to put up or shut up. I refer in particular to the recent statement by Commissioner Byrne, which was disgraceful and showed a complete lack of understanding of the Irish view at an international and humanitarian level. There is nothing squeamish about putting our soldiers' lives on the line in Liberia or, in the past, the Lebanon. There is nothing squeamish about our efforts to assist Third World countries or about trying to assist and develop the peace process in the Middle East.

It is important that we examine the important details in the legislation and the role of the Industrial Development Association in general. The Bill is designed to enable the Government to make a total payment of €50 million to the 13th replenishment of the association. As on previous occasions, the Bill amends the International Development Association Acts 1960 to 1999 to allow payments to be made to the IDA. As many are aware, the IDA is the soft loan arm of the International Bank for Reconstruction and Development, or the World Bank, which was established in 1960. The IDA provides highly concessionary financial resources to low-income countries to help them reduce poverty and achieve faster, more environmentally sustainable, broad-based growth. It is the single largest source of concessionary financial assistance to the world's poorest countries. In the fiscal year 2002, IDA assistance was provided to countries that have a per capita income of less than $875 per annum.

The IDA helps the world's poorest countries reduce poverty by providing "credits" which are loans at zero interest with a ten-year grace period and maturities of 35 to 40 years. These countries face complex challenges in striving for progress toward the millennium development goals set out and agreed at the Monterey Conference on Financing for Development of March 2002. For example, they must respond to the competitive pressures as well as the opportunities of globalisation, they must arrest the spread of HIV/AIDS and they must provide clean water and basic education. They must often deal with conflict and its aftermath.

Investment in public services is also required when dealing with poverty in Third World countries. Recent research clearly illustrates that countries with high levels of social expenditure have low levels of poverty. This requires investment in health, education, housing and child care services, as well as in income support. While Ireland has increased its level of social expenditure we need to look at ourselves and the international community to continue to ensure that historical deficits are made up. As a society and international community we also need to decide whether we want a two-tier system, where those who can afford services get them and those who cannot do not, or whether we wish to build a society or international community based on quality services for all to which we are all prepared to contribute. A strong social system can complement and support economic growth, which is crucial to this debate. It does not need to be an either/or situation. Active policies and investment in people, particularly at an early age, are key and I encourage Ireland to push this agenda internationally.

Many of these issues were debated at recent European Union meetings to discuss national action plans against poverty and social exclusion submitted by member states to the European Commission. Six key priorities have been identified across the plans: increasing active labour market measures; ensuring minimum income schemes are adequate; increasing access of the most vulnerable people to housing, health, education and culture; reducing early school leaving; ending child poverty; and reducing poverty among immigrants and ethnic minorities. A key issue for most states is the need to allocate resources to ensure the implementation of the plans, especially in the more difficult economic conditions in Europe. As we look forward to hosting the EU Presidency in the first six months of 2004, I hope these issues will receive greater attention and debate at both Irish and European levels.

Section 1 of the Bill amends section 3 of the International Development Association Act 1960, as amended by subsequent legislation, by the insertion of new subsections (2)(o) and (p) which provide for the contribution to the 13th replenishment of a sum not exceeding €50,000,000. Section 2 of the Bill contains the short title and collective citation.

The IDA is among the key multilateral institutions involved in this task and is specifically charged with responsibility for poverty reduction and the promotion of growth and development. Today nearly 3 billion people live on less than $2 a day and 1.1 billion people on less than $1 a day. The mission of the Minister of State and the IDA is to support efficient and effective programmes to reduce poverty and improve the quality of life in its poorest member countries. The IDA helps build the human capital, policies, institutions and physical infrastructure needed to bring about equitable and sustainable growth. Its goal is to reduce the disparities across and within countries, to bring more people into the economic mainstream, and to promote equitable access to the benefits of development. These are the core issues in the legislation, which I strongly welcome.

When dealing with the IDA and poverty in general, we cannot walk away from the issues of war, justice, hatred, oppression and racism. Let us remind ourselves of what Nelson Mandela said in 1994 when he was made President of South Africa. He stated:

No-one is born hating another person because of the colour of his skin or his background or his religion. People must learn to hate and if they can learn to hate they can be taught to love, for love comes more naturally to the human heart than its opposite.

That message is very relevant to today's debate. It is relevant to the Holy Cross school in Belfast, the West Bank, Liberia, Chechnya, Afghanistan and Iraq. In the last few days American forces in Iraq admitted their fighter jets killed six more children in an attack on a compound used by a so-called militant near Gardez in Paktia province. This is in addition to the nine children killed by American fighter jets on Saturday. Children are obviously becoming legitimate targets in many conflicts, which is unacceptable.

As opposition grows in Iraq, more and more people are asking if it is the new Vietnam, and some of the facts support that view. The attrition rate among US forces in Iraq, the percentage of soldiers killed or wounded, is 9.25%, which is already higher than the level in Vietnam. Of course there were many more US troops in Vietnam at the peak of the war than there are in Iraq, but it took three years, from 1962 to 1965, for the death toll to reach the level it has already reached in Iraq. There are only 30,000 soldiers on the front line in Iraq and it is clear they face a high risk of becoming casualties. No wonder, then, that 14 soldiers recently committed suicide and dozens of others have maimed themselves to avoid active service.

An Ceann Comhairle

I am not sure of the relevance to the Bill of what the Deputy is saying.

Mr. F. McGrath

The relevance is the link I am making between war and poverty.

An Ceann Comhairle

A passing reference is acceptable but the Deputy should not go into great detail on it while discussing this Bill.

Mr. F. McGrath

I urge the use of realism and common sense in dealing with war and poverty. There should also be sensible community policing by gardaí, given recent incidents at Shannon Airport.

I said that when discussing international poverty and disadvantage one must include the race issue, which is part of the international problem. I have some sensible proposals to deal with the rise of racism both in Irish society and internationally. We must face up to the reality that immigration in Ireland, and across the world, is a permanent reality and one which will enhance our nation. We must also accept that cultural and ethnic diversity should be respected and supported. Immigrants and their communities, in Ireland or elsewhere, should be empowered to improve their quality of life and Ireland should comply with international laws, obligations and undertakings on immigration, and legislation should always be humane and just. These are the values I want to put forward. On the international level I would like more radical reform of policies assisting Third World countries. I welcome this debate on the IDA.

Mr. Boyle

I doubt the Minister for Finance finds granting €50 million to the International Development Association is one of his more pleasurable activities. He certainly does not find it one of his more interesting activities, as his absence from the debate—

Mr. M. Ahern

That is a very pejorative comment.

Mr. Boyle

I will clarify it during the debate.

Mr. M. Ahern

It is just insulting an individual.

Ms Burton

We have sought the Minister—

An Ceann Comhairle

Deputy Boyle without interruption, please.

Mr. Boyle

Members, including myself, have tabled a number of parliamentary questions over the past year querying how the Minister for Finance interacts with the World Bank and its sister organisation, the International Monetary Fund, on development issues. The Minister has studiously avoided answering the questions and, when specific scenarios have been pointed out, he has not availed of the opportunity to contribute to the debate on these issues. Earlier this year, the annual meeting of the World Bank and the IMF was held in Washington. The Minister attended the meeting but he did not take the opportunity to raise development issues.

This issue is at the nub of the legislation because, while the International Development Association engages in work endorsed by every Member, it is an arm of the World Bank. Many people dealing with development issues recognise that the World Bank throughout its history has been as much a part of the problem as it has been part of the solution. The bank has been reformed and we all hope the ongoing debate about the bank will result in better reforms. However, in terms of its ethos, organisation and effect, the bank has, in many cases, damaged developing countries.

We must analyse how taxpayers' money can be used to the maximum effect. Ireland must willingly endorse one principle as a prosperous nation, which is to distribute its prosperity in a fair way in a world that is unfair. The International Development Association provides grant assistance to countries that have a per capita income of less than $875 annually, which equates to $2.50 a day or €2 a day. A total of 2 billion people live on less than $2 a day. The association assists a large number of our fellow inhabitants on the planet. At the end of the day, an allocation of €50 million by a country such as Ireland is small beer. It is three times the cost of the Punchestown racecourse development. That is why I am sorry the Minister for Finance has chosen not to take part in the debate and I hope he avidly reads the Official Report. He does not believe this area is a serious element of his brief.

The International Development Association has addressed the scourge of HIV-AIDS in many countries that benefit from the soft loans it provides, especially those in sub-Saharan Africa. World AIDS Day has been held on 1 December for a number of years. The most recent figures regarding the number of people affected by AIDS were announced last week and 30 million are affected in sub-Saharan Africa. While Ireland's contribution is significant, it only amounts to €1.80 per person for that group.

This is a short Bill which updates the legislation that enabled Ireland's accession to the association in 1960 and provides for the allocation of €50 million. However, it must be examined in the context of Ireland's commitment to overseas development assistance which the Taoiseach has stated should reach 0.7% of gross national product by 2007. The allocation in the Book of Estimates equates to 0.41% of GNP. The Government needs to more than double its existing allocation in overseas development aid to achieve its target. It would need to increase the allocation by approximately €180 million per year in the intervening years. However, the Government's commitment is not being supported with resources.

I acknowledge that, by allocating 0.41% of GNP, Ireland remains one of the larger donor nations, but other countries have achieved an allocation of 0.7% of GNP. Given Ireland's prosperity, it should aspire to achieve that target. The scale of poverty in developing countries needs to emphasised. Ireland does not experience poverty on the scale of the countries it seeks to help through this allocation. While Ireland, as a prosperous nation, has a responsibility towards developing countries, the Government often gets the balance wrong in terms of distributing wealth domestically.

The Minister of State referred to the competition for resources in the area of development aid because of circumstances in Afghanistan and Iraq. If this is Government policy, then the situation is much more serious that we thought. Development aid must be based on the principles outlined by Deputy Burton such as access to common resources, including water, food and shelter, and it should not be linked to geopolitical issues that have caused the conflicts in such countries. If the Government's policy is to frame its development aid programme by taking cognisance of the resource needs of conflict countries, which are determined by the states which caused the conflicts, we have significant problems.

Everybody accepts the general principle behind the association and the allocation provided in the legislation. It is unfortunate the Government is not being more proactive in the debate and I fear this might be seen as an indicator of the its commitment towards achieving the target for overseas development aid of 0.7% of GNP. I hope I will be proved wrong on this because the public believes this commitment can, should and, in terms of moral responsibility, must be honoured. I hope the Government lives up to that responsibility.

Caoimhghín Ó Caoláin

I welcome the opportunity to address issues of development, debt and globalisation. The Bill facilitates a Government payment of €50 million to the International Development Association, an arm of the World Bank. There are significant problems about the way in which the World Bank and, more particularly, the International Monetary Fund operate. These include the piling of debt on heavily indebted countries and the tying of loans to a strict monetarist model of economic management, to privatisation and the exploitation of these countries by multinational corporations, thus worsening poverty and debt. It is a continuous cycle.

Fundamental reform of the World Bank and the International Monetary Fund is needed. Voting rights need to be amended to increase the voting strength of the developing world. Europe is over-represented and European representation must be reduced in favour of more equal regional representation. The South African finance Minister Trevor Manuel has proposed the establishment of an independent expert committee to study the issue and initiate reforms. During its EU Presidency the Government should back the Manuel proposal. I and other Deputies urge it to take up that proposal during its six month opportunity.

There are two ways through which the Government can address world poverty: Irish overseas development assistance and the forthcoming EU Presidency. Overseas development assistance is an investment in global social justice, especially in the area of human rights – yesterday was International Human Rights day. It is money well spent.

The Government has pledged to increase ODA spending to the United Nations target of 0.7% of gross national product by 2007. Given that this is now the fourth wealthiest state in the world according to statistics, we can well afford it. Many of our European neighbours do better. Five have already reached and exceeded the UN target. Luxembourg and Norway have committed to increasing their spend to 1% of GNP by 2005 and Sweden has committed to reaching 1% by 2006.

What is our record? Not only did the Government fail to increase ODA to 0.48% of GNP for 2003, despite a prior agreement between the Minister for Foreign Affairs and the Minister for Finance, it clawed back on the 0.45% ODA spend originally promised for 2002. In the budget for 2003, the Government compounded this disappointment with its failure to ring-fence ODA and make a multi-annual commitment to progressive incremental annual increases to the target date of 2007, and with its effective freezing of 2003 ODA spending at the 2002 level of 0.41%. The Government now proposes to freeze ODA spending in 2004 at a level of 0.41% of GNP for the third year running. This is a depressing record.

Development Co-operation Ireland and Dóchas have recommended managed ODA spending growth in the form of an incremental increase each year until the target is reached. Other Deputies outlined the details but I will repeat them. The targets now are 0.48% in 2004, 0.5% in 2005, 0.62% in 2006, and 0.7% in 2007. Sinn Féin endorses this approach.

During its EU Presidency in 2004, the Government has extra responsibility to meet this commitment. It would set an example by so doing. Surely the example of the past three years is not the one we want to present to other member states or to an expanding European Union. The Government must show leadership to those EU and other states which have yet to meet the UN ODA target, by committing to ring-fence the ODA spend and to making annual incremental increases to 2007, beginning with a minimum spending increase to 0.48% of GNP for 2004.

There are other issues of global social justice which the Irish EU Presidency should prioritise. I propose to put four issues to the Minister which I hope he will note. First, the Government should commit to bringing the EU partners on board to match Ireland's 2002 commitment to developing country debt cancellation with the urgent priority being debt cancellation for countries with high HIV-AIDS prevalence. It should facilitate a joint approach of EU member states which, like Ireland, are members of the international financial institutions to achieve reform and progress on debt cancellation. This is an important issue.

Earlier this year on behalf of Sinn Féin I signed an open petition outside the Central Bank, as did other party representatives, which called for this step to be taken. Representatives of political parties in this Chamber signed that petition and each of us must follow through on our written commitment with action.

Second, the Government should work towards reform of the international financial system and to strengthen the voice of developing countries in international economic decision-making. With the collapse of the World Trade Organisation round in Cancun, the Presidency programme must prioritise trade justice. It must commit to supporting creation of a multilateral binding code of conduct for EU participation in trade negotiations.

Third, the Irish Presidency must ensure that poverty eradication is a guiding principle for EU external action and ensure policy coherence in this regard. It should propose the establishment of a permanent EU monitoring group to review members' implementation of Monterey and Barcelona commitments which include aid increases, aid harmonisation and the untying of aid.

Fourth, not for the first nor probably the last time, I avail of this opportunity to make the case for the Tobin tax. The Irish Presidency programme should show global leadership by committing to the introduction of legislation establishing a Tobin tax in the State and campaigning to establish the EU as a Tobin tax area. The Minister for Finance, Deputy McCreevy, has to date ruled out the introduction of a Tobin tax but France—

Mr. M. Higgins

He vehemently opposes it.

Caoimhghín Ó Caoláin

The word I was thinking of using was "conclusively", but I never accept that from the Minister in the hope that we will shed light on the matter for him and he will change his mind. He should note that France has introduced this tax and it can be done where the political will exists. The Minister's answer on this issue requires more than the cynicism and lack of interest shown to date. I urge the Minister of State, Deputy Michael Ahern, to use his office to shed light on the important steps which must be taken.

Mr. Durkan

Ireland's contribution to international development aid is welcome. No matter what contribution is made, it is never sufficiently large. However, it does us no harm to assess the magnitude of the situation to which Ireland should address itself. The aid situation is growing increasingly urgent, especially in Africa where warfare, starvation, drought, HIV and AIDS are a serious challenge for international development agencies.

This is a good time to focus on Ireland's contribution as a small country. Our bilateral aid programme is well focused, in general, as also is our multilateral aid programme. However, as some development agencies have suggested, we should do our utmost to ensure that development aid goes in the direction for which it is intended. Failure in this regard only bolsters bureaucratic or corrupt governments, agencies or groups and helps them remain in power, thereby causing the type of devastation which the international aid programme is intended to address. Considerable strides have been made in connection with the HIV-AIDS situation in Uganda and much useful work has been done. A positive outcome in the region is that it has given some indication of what can be done when the various agencies concerned, including those in Uganda, address the issues and decide to take action on them.

We need to be mindful of the vast size of the African continent, as this gives a perspective on the magnitude of the task which lies ahead. Other speakers referred to the World Bank, the International Monetary Fund and various other agencies which have played a role in this area in the past, perhaps not always with the intention of achieving what we would see as the objectives of the International Development Association. However, in making its contribution, whether through the Departments of Finance or Foreign Affairs or at whatever level, the Irish Government has a duty and responsibility to seek to influence in a positive manner the direction and policy aspects of assistance which may be given.

The Government can also encourage other contributing countries to follow suit by using its influence to promote a more equitable situation for victims and those in need of aid who await an outcome without being in control of the agencies through which aid is directed towards them. We should ensure that we can at least influence the manner in which aid is distributed as well as the extent and quality of aid delivered. Continuous assessment of progress is required. In the absence of such assessment, the tendency may be to allow existing programmes to continue without interruption, thus resulting in the same mistakes being made that were made in the past. Action on this is important.

I compliment the bilateral aid programme in particular through which Irish agencies have involved themselves directly, adopting, as it were, their opposite numbers in the countries concerned. Lesotho, where an appraisal is taking place this week, is a good example in this regard. During an election monitoring mission in the country, I took the opportunity to visit the various Irish agencies which operate there in a responsible manner through taking on board local conditions and leading the way in guiding the local population in tackling problems. This development has continued under various Irish Governments over many years and augurs well for the bilateral aid programme. It is open to inspection, and this has been encouraged by Governments over the years. That is as it should be.

I refer again to the health issue in Africa. I acknowledge the Minister's comments on the size of the African population and its likely increase to one billion by 2020. At this stage, a serious question must be asked, having regard to the progress to date, as to whether we are likely to achieve the result which is desirable and necessary to address and control the HIV-AIDS issue effectively. If this does not happen, the problem will drag on. The year 2020 is still quite far ahead. We must resolve the problem far sooner than that. Otherwise it will simply be replicated.

While everybody may not necessarily agree with the views of John O'Shea of GOAL and the Government has on occasion strongly refuted some of the matters he has brought to our attention, nonetheless, what he has brought to our attention is important. It is essential that international aid, whether through the International Development Association or other channels, should be clearly seen to go directly to those for whom it is intended. Most importantly, the benefit must not go to intermediate or superior agents or agencies, bureaucrats or others who would seek to cream it off. The aid must go directly to those for whom it is intended to alleviate their problems. First, this will give hope to those concerned and, second, it will achieve progress.

Mr. M. Higgins

I welcome the opportunity to speak on this issue. I have often spoken on IDA Bills as they have come before the House. Usually, they have tended to be nodded through as if there was not much scope for disagreement on them. While few Members of the House would usually wish to vote against such Bills, they raise important issues, some of which have been referred to by previous speakers. In the short time available to me, I will refer to a number of issues which I consider important.

In the first instance, we have long passed the point where the Minister for Finance did not present an annual report on what happened in our name in the international financial institutions. As I understand the situation, we have not debated such reports in the House, although one has had sight of them at a distance. While acknowledging this, my party and, I imagine, other parties would be amenable to facilitating a detailed debate on this issue.

I attended the previous meeting in Athens of the so-called parliamentary forum associated with the World Bank. I understand the next meeting will take place in the spring. At the previous meeting, there was a presentation by the head of the World Bank, Mr. Wilkinson. His speech, which I had heard previously, seemed open and reform minded. We also had an address from Mr. Kruger of the International Monetary Fund whose speech was appallingly poor in terms of economics, richness and backward ideological position. Among the parliamentarians present in Athens, there was a view that we would spend our time a great deal better by dealing with the achievement of the millennium goals agreed at the UN summit on development financing in Monterey. Those have been referred to earlier in the debate. Dealing with the millennium goals would be disturbing for the World Bank, but we should speak plainly. We should have an opportunity to discuss in the House what is said in our name. I will come to this point shortly.

With regard to the World Bank presentation in Athens, while I have not read the report of the Minister for Finance, I would like to know precisely where he stands on what was being sought in the context of the new instrument for global facility. I have not had an opportunity of reviewing this and I would welcome the opportunity.

Few Irish people seem to advert to the fact that the institutions which we now criticise and against which there are many street protesters were originally United Nations sourced. The World Bank – originally a development bank – was responsible to the economic and social committee of the United Nations, through which it reported to the UN Secretary General It was a UN institution which spun away into a total lack of accountability and, very often, confrontation with some of the poorest people it should support. In the same way, the IMF has an interesting history and there is the particular history of the International Development Association to which the Minister of State helpfully referred in his speech.

Where does the Government stand on the Washington consensus that leans on the policies and publications of development economics from the development institutions? There is a current debate going on among young African economists and those involved in the new partnership for development in southern Africa on a matter that we in Ireland spoke on in the 1950s and 1960s, namely, the right to choose our own path to development. Behind these institutional bodies' policies, there is an absolute refusal to acknowledge that there are different paths to development and alternatives to the neo-liberal, market and export-led economic models which are being imposed on poor countries.

The Department of Finance has always intrigued me by the manner in which it rushes to quote figures from the OECD. OECD economic research is regularly wrong, based on poor databases and does not enjoy enormous respect among serious-minded economic theorists. On the other hand, the most qualified, internationally refereed published work comes from the UN Commissions for Africa and Latin America. The UN Commission for Europe has published the best studies on the energy requirements of Europe and the transitions in the Russian economy. However, its work is never quoted by the Department for the simple reason that the academics who write the reports are genuinely independent economists who are able to evaluate the consequences of one model rather than another. What the Department of Finance relies on is tarted-up flimsy journalism that comes occasionally from OECD reports, while neglecting serious economic work from the UN commissions. I have not seen UN commission work referred to in any speech by the Minister for Finance in the last ten years.

This Bill is aimed at assisting countries that have an annual net income of less than $875 per head. Why is health and education expenditure not ring-fenced and the calculation of the relationship in terms of debt taken into account? For every country in Africa, where debt payments are exceeding the combined health and education expenditure, every 1% of GDP given to health and education as opposed to debt, can save the lives of 21,000 children. People regularly want to be shocked by, say, famine, into paroxysms of reaction. Why do we need one famine to succeed another? Why do we need hundreds of thousands of malnourished children to die after we have seen it all before? The blunt answer is the economic model cannot be tested.

It was easier in the Middle Ages to question a natural law theory than it is to question the Washington consensus today. It is being purveyed by bureaucrats who simply ignore Nobel Prize winning economists, such as Amartya Sen. Questioning the model is not allowed. However, I want the model to be debated in the House instead of the farcical discussions held at the Committee on Foreign Affairs in which aid, trade and debt are discussed separate from each other.

Global aid has been falling consistently. For every dollar of aid that goes to developing countries, $2.25 is returned by the African countries in unfair trade. Aid has fallen by a third since 1994 and halved since 1990. If one runs the population figures of the most vulnerable and at risk countries, alongside the fall in aid, one realises that so many millions more people have been put at risk. A Minister for Finance, irrespective of what party he or she might come from, should tell this House where we stand with regard to the world millennium development goals. How much was pledged and how much has actually been provided and spent? Where are we on the undertakings given at the conference in Johannesburg?

In Uganda life expectancy is less than 43 years. What people do not realise is that after the Cancun talks, in order to comply with WTO rules, Uganda has been told to wind up chicken farming. These aspects of an indigenous, ecologically responsible local economy must cease to satisfy externally imposed WTO criteria. There is also the nonsense that we have opened our markets – bar the arms trade – for these poorer countries to sell in. However, if a country produces certain types of fruit and exports them raw – which is impossible – it can qualify for export. However, if the fruit has more than a 25% sugar content, it is ruled out. Another example is in the monopolies of chocolate production. Those poorer countries that produce cocoa are blocked in moving up the value chain and gaining access to markets. It is only a camouflage to say they get everything except arms. It is about delivering what is needed for these economies.

The principle issue is an intellectual, moral and political one. Do we allow the poorest economies the right to construct a local, responsible economy to meet their basic needs first? Are we saying that they should press on for a neo-liberal, market, export-led model, irrespective of the consequences. Faced with that, what is being said in our name at the meetings of the IMF and the World Bank? This is what democracy is about.

I can translate everything I said into terrible realities. In 1999, $128 million a day was transferred from the poorest countries to the richest in debt repayment. For each additional 1% of GDP that could have been shifted from that to the combined health and education expenditure, child mortality could have been reduced by 24%. Zambia paid $438.5 million, 14% of its GDP, in debt service in 1999. If that had been spent on Zambian health care, infant deaths could have been reduced from 202 per thousand to approximately eight per thousand. Another example is Mali where in 1999 the figure was $88 million in debt relief and $54 million on education and health expenditure.

Debate adjourned.