JOINT COMMITTEE ON FINANCE AND THE PUBLIC SERVICE díospóireacht -
Wednesday, 15 Sep 2004

Overseas Development Aid: Presentations.

Chairman

On behalf of the committee, I welcome the representatives from Dóchas and the Debt and Development Coalition Ireland. The organisations wish to discuss with the committee issues relating to debt cancellation, parliamentary oversight of the IMF and World Bank policies and the funding arrangements necessary for the Government to meet UN targets of spending 0.7% of GNP on overseas development assistance by 2007. While I appreciate that the focus of the two organisations is somewhat different, the committee is conscious that both were anxious to meet with it as soon as possible. As the committee is out of the country next week, we had to schedule for both groups to meet with it on this occasion.

We will begin with a short presentation by Dóchas, followed by one from the Debt and Development Coalition of Ireland. While the comments of committee members are protected by parliamentary privilege, those of visitors are not so protected. Members are reminded that they should not comment on, criticise or make charges against a person outside the committee or the Houses of the Oireachtas. Dóchas is represented by its director, Mr. Hans Zomer and Mr. Colin Roche, advocacy officer of Oxfam Ireland. The Debt and Development Coalition is represented by its co-ordinator, Ms Jean Somers and board member, Mr. David Joyce.

Mr. Hans Zomer

I thank the committee for the opportunity to present Dóchas's views on these matters. As members will be aware, we met with this committee last year to discuss the 2004 Estimates. This year, we are attending to discuss the 2005 Estimates. Unfortunately, from our perspective very little has changed in funding for development assistance. My colleague, Mr. Colin Roche, will talk about this in more detail. We also wish to comment on the decentralisation plan and the proposed relocation of Development Co-operation Ireland to Limerick.

Mr. Colin Roche

I thank the committee for inviting us to attend again. In 2000 at the millennium summit in New York, the Taoiseach, Deputy Bertie Ahern, announced the Government's decision to reach 0.7% of GNP in overseas aid by 2007. On the back of this, Ireland received much kudos in the international arena. We were voted into a seat on the UN Security Council. In July 2003, Ireland hosted the UN human development report. Partly, as a result, we helped to enshrine the protection of poverty reduction objectives in the EU constitution.

However, since the 2000 announcement, Ireland has had a mixed record. Unfortunately, though after some initial fast progress, we informed the committee last year that we had stalled for the previous two years at 0.41% of GNP. This is now the third year in a row that we are stuck at the same level, despite small monetary increases. Our core proposal is that the Government should set out a timetable to reach the 0.7% figure by 2007. The simplest and easiest way to do so is by setting out a timetable to reach 0.5% by 2005, 0.6% in 2006 and 0.7% in 2007. This will equate to approximately €150 million per annum in increased expenditure for each of the next three years.

Why is it needed now? If a three-year plan is implemented, 2005 will be its first year. A number of events will take place next year, which highlights the need for overseas development assistance and increased expenditure on it. In September-October next year, the United Nations will conduct a stocktake of the achievement of millennium development goals, which are the targets and objectives agreed by the international community at various summits. The targets include halving the percentage of people living in global poverty by 2015, ensuring that every child has a place at primary school by 2015 and that gender parity exists in primary school education by 2005. The target for the first deadline, which is in 2005, will not be achieved, which highlights the need for greater effort and more expenditure in the short-term to make progress in meeting the objectives. Prior to the September stocktake, the European Union will take stock of how it is contributing to the millennium development goals and, sometime early next year will consolidate the various national reports and submit them in advance of the UN stocktake in September.

Following the United Nations G8 stocktake, there will be high-level dialogue to review decisions taken at the Finance for Development Conference at Monterey in March 2002. Next year, the United Kingdom will chair the G8 meeting and has intimated that poverty reduction developments will be high on the agenda, as well as hosting the publication of the Blair commission on Africa report and launching an international finance facility, which aims to increase the levels of expenditure on ODA in the short-term.

Our core recommendation, as it was last year, is that the Government, the Ministers for Foreign Affairs and Finance together, should have a three year agreement to reach the target of 0.7% by 2007, as outlined in our presentation. We hope the committee will support this and communicate to the Ministers involved that this is its wish. I will be happy to answer questions later.

Mr. Zomer

I will address the Government's proposed decentralisation programme. Dóchas is the Irish Association of Development NGOs and as such has a keen interest not only in the quantity but in the quality of the aid programme. Dóchas works on the quality of its members' work as well as engaging with Government and the European Union on aid and other policies that affect developing countries.

The announcement of the decentralisation process last December has impacted on Dóchas because under that plan it is proposed that one of its key partners, Development Co-operation Ireland, DCI, which is a directorate of the Department of Foreign Affairs will relocate to Limerick. When the proposed decentralisation process was announced, Dóchas, acknowledging that it was a complex issue, commissioned research on the core principles of the Irish aid programme, partnership, coherence, effectiveness to see how these principles would be affected by the relocation of DCI to Limerick. This was to ensure that Dóchas had the facts straight before it would decide whether it would be good or bad for the organisation. It communicated the body of that research, which boiled down to a number of points, to the appropriate Ministers, Deputies McCreevy, Cowen and Kitt.

The concept of decentralisation is welcomed by development NGOs as its core concerns are related to issues of sustainable livelihoods and rural development and so on. However, when the current proposals are applied to the core principles of DCI, it noted a number of potential concerns and a number of problems with the proposal. First, is the marginalisation of the DCI programme. Unlike common understanding, DCI is not only a body that implements policy and writes cheques, it is a policy making body. One of its core tasks is to relate to the rest of the Department of Foreign Affairs and other Departments on issues relating to aid and the Ireland-Aid Review that was the basis for the creation of DCI. A great deal of time and effort was spent on ensuring that it got the model right that would deliver on this issue. Policy coherence and interdepartmental consultation were at the forefront of the consideration and the current proposal de facto creates a situation which runs counter to the proposals by the Ireland-Aid review, in that DCI will be physically taken out from its mother Department, and it is feared that this will impact politically also, in terms of access.

One of the recommendations from the Ireland-Aid review is that the Irish aid programme should reach out much more to key stake holders, such stake holders would include Dóchas, as development NGOs and the missionaries, but more importantly, it would also include farmers' organisations, the private sector, academia, trade unions etc. The other major concern is that relocating DCI away from key decision makers in the development of foreign and trade policies will make access for external stake holders that much more difficult, again potentially undermining one of the key recommendations of the Ireland-Aid review.

The research also pointed out a number of other concerns about staffing, particularly that the Ireland Aid review recommended the creation of development specialists with two tasks, to increase the capacity of the development programme in terms of analytical and specialist skills and to mainstream development skills through the Department of Foreign Affairs. Obviously the relocation of DCI to Limerick would create problems in the recruitment of such specialist staff and for them being able to fulfil their task of mainstreaming development knowledge in the Department, which would be much more difficult. There is also the issue of disruption at a time when the aid programme is set to grow. The last thing one needs is major disruption in terms of relocating 130 people and their offices when they are busy with their day-to-day work. The timing is very bad.

The central point of this presentation is that Development Co-operation Ireland is a policy making body and not a service delivery agency, similar to the passport office or similar organisations. This policy making body needs to be at the heart of policy making and in that sense Dóchas recommends that the committee should consider the potential problems the research has highlighted.

Ms Jean Somers

The Debt and Development Coalition, which requested to address the committee, thanks it for the opportunity to do so. The IMS and World Bank annual meetings are due to take place at the beginning of October and are usually attended by the Minister for Finance. We assume the new Minister for Finance will also attend this year.

We will look at two issues — first, the role of parliaments in overseeing the operations of the IMF and the World Bank in their countries and second, we will update members on developments in the debt issue. This is the sixtieth anniversary of the IMF and the World Bank and in those 60 years they have become heavily involved across the developing world. The IMF, in particular, has moved far away from its original remit to provide temporary support to developing countries and it is now involved over the long term. This involvement is impacting on democratic processes within those countries. While most countries operate under some form of democratic government with 140 countries out of 189 with multi-party systems, the problem is that once elected, representatives can find their role is constrained by the demands of outside bodies such as the IMF and the World Bank because they set the conditions with which countries must comply to get debt reduction and avail of loans. Many of these loans are long-term and can build up debt that is not payable.

While parliamentary oversight is obviously a key element in democracy, parliaments in the developing world often do not even know the conditions being attached to the policies, loans and programmes their governments are adopting. In addition, decisions made by parliaments are sometimes overridden by decisions of the IMF.

One example of this comes from Zambia where a motion was passed by Parliament calling for the national commercial bank not to be privatised because there had been considerable public protest. The Government tried to reverse the decision of Parliament and the IMF stated that Zambia would not get $1 billion in debt reduction unless it privatised the bank. One might ask why a commercial bank should not be privatised. However, this bank in Zambia is the only bank operating across the country and is the only means through which small farmers can get access to credit.

The IMF and World Bank are obviously aware of the criticisms of the way they operate. In 1999 they introduced a new approach whereby they would base their country programmes on development plans, known as poverty reduction strategies, developed within each country through a participatory process. While the idea is that the countries should own the programmes, the problem remains that the IMF and World Bank have the final right to approve the programmes.

To understand what the IMF understands as ownership, a quote from the organisation states that ownership does not require that an IMF-supported programme be a government's first choice nor that it be the programme that officials would have preferred in the absence of the IMF involvement, but what is essential is that the responsible officials be committed and that opposition can be overcome.

We would see this approach as akin to what a speaker at a recent Debt and Development Coalition seminar called "promoting choiceless democracy", namely, the trappings of democracy are present but the basic assumption is that there are a set of correct policies and that development is merely a matter of implementing these policies, which does not give much of a role to parliamentary debate.

The German Government recently carried out a study of the role of parliaments in sub-Saharan Africa in implementing poverty reduction strategies and found they played only a very marginal role. The study made the point that this contradicts democratic principles. The Irish Government's recent report on Ireland's participation in the IMF and World Bank also highlighted the need to strengthen the role of parliaments in the poverty reduction process. Civil society groups within heavily-indebted countries are keen for the debt crisis not to recur in their countries if we manage to have current debt cancelled. They see a need for parliamentary oversight and scrutiny of all loans taken by their governments and programmes coming from outside.

This committee would sympathise with its parliamentary colleagues in the south. Looking towards the annual report that the Irish Government will next year present to the Oireachtas, we recommend that the committee request that an outline be given within that report of the contribution made by Ireland to ensuring that IMF and World Bank operations do not undermine the role of parliaments. This report is an accountability tool of the Government to the Oireachtas. While it provides a useful summary of the main issues being discussed in the IMF and World Bank, it does not provide much information on Ireland's specific contribution, which is clearly what committee members, as parliamentarians, need.

Mr. David Joyce

These are interesting times in regard to the issue of debt cancellation. Committee members will remember the Jubilee 2000 campaign which had a significant impact here in terms of the number of signatures collected. Ireland had the highest rate of signing per capita in a campaign which asked governments to ask the international financial institutions to cancel the debt owed to them by the poorest countries.

At the Sea Island G8 meeting last June, much publicity surrounded the issue of debt cancellation and there was speculation that something might emerge from the meeting. Nothing emerged and we are not sure whether the issue was discussed because such meetings are not particularly transparent. However, we have learned that a proposal will be discussed at a meeting of the representatives of G7 Finance Ministers this week. As the G7 and other rich country creditors have promised to write off debts owed to them by the poorest countries, the proposal will focus on multilateral creditors, in particular the IMF and World Bank, which are now the most significant creditors of the poorest countries.

The Debt and Development Coalition discussed previously with this committee the heavily-indebted poor countries, HIPC, initiative, of which there have been many criticisms, including the fact that it is run by the creditors which act as judge and plaintiff. The initiative covers just 42 countries while other severely indebted countries such as Nigeria and Indonesia are not included, and it does not provide enough debt cancellation. Debt service is being reduced but only by approximately one third on average.

The Debt and Development Coalition has argued that in terms of good global governance a clear need exists for a transparent and independent mechanism to deal with unpayable debt, which would deal with conflicts of interest. However, it has been clearly demonstrated that the poorest countries urgently need 100% debt cancellation and cannot wait for such a development. Some progress has been made. Some 27 countries are receiving some debt reduction under the HIPC initiative and this has had a positive impact in terms of the expenditure increasing. For example, in Tanzania education spending has increased and school fees have been eliminated, which has enabled a further 1.6 million children to attend school.

Debt campaigns in poor countries have always stressed the need to ensure that people at community level benefit from any savings made as a result of debt reduction. A positive development is that such campaigns are facilitating groups at local level to take part in monitoring the use of savings made. This has occurred, for example, in Uganda and Tanzania, countries with which we have a bilateral aid relationship.

As Mr. Colin Roche of Oxfam stated, recent reports from the IMF and World Bank acknowledge that the HIPC initiative is failing to resolve the debt crisis and that African countries which have received debt reduction are still spending an average of 15% of their revenues servicing those debts. According to World Bank data, most of the millennium development goals, which are to be met by 2015, will not be met by most countries in Africa. According to the United Nations development programme, two thirds of the countries facing major obstacles in reaching the goals are heavily-indebted poor countries.

With regard to the next steps to be taken, obviously cancelling debt owed to the IMF and World Bank is a step for which we have campaigned for many years. They are currently cancelling just one third of the debt owed to them. The debt is particularly onerous because if a country defaults on a debt owed to the IMF or World Bank it becomes ineligible for aid, loans and debt reduction.

Ireland has played a positive role in that it was the first country to call for 100% cancellation of debt owed by heavily-indebted poor countries in the policy launched in 2002 by the Minister of State at the Department of Foreign Affairs, Deputy Tom Kitt, and the Department of Finance. The news that support for this call is growing in the US and UK is promising but it may still be restricted to a fairly small number of countries. In addition, the US may wish to use current resources going to poor countries to write off IMF and World Bank debt. The Debt and Development Coalition has always argued that debt should be cancelled using additional resources and that the IMF and World Bank should consider their considerable reserves; the IMF, for example, has one of the largest gold reserves of any official body.

The upcoming AGM of both institutions provides the new Minister for Finance with a significant opportunity to press for the best deal and cancellation of unpayable debt owed to those institutions by poor countries. We recommend that the Minister should press for the cancellation of unpayable debt owed to the institutions by poor countries and urge them to look at their own resources in order to do this as well as to highlight the need for a fair and transparent process to deal with the issue in the longer term. Thank you.

Chairman

I will first call the representatives of Fianna Fáil for ten minutes collectively.

Deputy Finneran

I wish to share my time with some of the members on this side who wish to contribute. I welcome the representatives of Dóchas and Debt and Development Coalition Ireland to this meeting of the Joint Committee on Finance and the Public Service. We very much appreciate the contribution that has been made by both organisations.

Before turning to the issues on the agenda I wish to refer to the comments on decentralisation. We are in the process of discussing that today. I reiterate what has been said by others who made presentations here this morning that decentralisation is obviously a Government policy decision. That must be borne in mind at all times. Implementation is a matter for discussion but it is the prerogative of Government to make decisions regarding decentralisation. The views of witnesses are taken into consideration in the overall context.

Regarding the Irish position and the presentation today, everybody recognises the support given to the Taoiseach in 2000 when he made a statement regarding Ireland's contribution to ODA up to 2007. In per capita terms Ireland has an excellent record compared to that of many other nations. The 2002-04 target was not met in 2004-05. However, it must be recognised that Ireland had to address its own problems, many of which were caused by international events. I compliment the Minister for Finance on seeing us through that difficult period of 2002-04 and returning the public finances to a state which is the envy of many countries around the world. Some of these comments may be unpalatable to some people. However, it is a fact that the condition of our public finances has been internationally recognised. I compliment the Minister for Foreign Affairs, Deputy Cowen, and the Minister of State, Deputy Tom Kitt, on their contributions in the area of ODA. I hope the Government target for 2007 can be met. That is a matter to be dealt with in the budget in December this year, next year and the following year.

This country has a great social conscience in terms of giving aid overseas, not alone in monetary terms but in the context of the contribution made by Irish missionaries, NGOs and others. We have an excellent record. However, we must also be conscious of the enormous problems internationally. I very much welcome what I interpret as very severe criticism of the IMF and what is happening internationally in terms of dictating policy to democratically-elected governments.

Too few have challenged the position of the IMF over the years. It has been stated that the trend seems to be towards creditors becoming judge and jury. I agree wholeheartedly with that statement. Senator O'Toole and I have in the past discussed this matter at length on this committee. I have very strong views on this and I believe an open debate here and internationally is necessary and should be ongoing. Ireland, which has a stated policy of 100% cancellation of debt, is in a position to advance that debate. I take the opportunity afforded by this meeting to call for that. I am in no position to indicate to either group here today whether the Government will meet its target but I hope it will. There is good will among the Irish people for that expenditure. If the Minister for Finance, whoever that may be, is in a position to meet the Government's target up to 2007, that will be good.

There are a couple of other points I wish to make. The amount of arms on the streets of the towns and villages of countries that are debt-ridden and have a very low per capita income is extraordinary. Is there any agency at any level in the world that can control the sale of arms into some of the poorest nations, which contributes enormously to the poverty and hardship wrought on the people? Somebody somewhere is making a financial killing in this area. It appears that a blind eye is being turned to the sale of arms into these countries where, in many cases, democratic systems find it very hard to survive because of the opposition often of a very small percentage of the people which is fuelled and supported by people with arms who can undermine and bring down democratically-elected governments. In tandem with our contribution under ODA, we need to expose and debate the proliferation of the sale of arms in some of these poor countries. That is a matter on which the delegations can comment and, although it is not totally within their brief, I would like them to comment when responding today.

Senator Leyden

I welcome the delegations. They are complementary because the Government's aspiration to meet the target of 0.7% of GNP will, I hope, be realised and that will in turn give us more credibility to speak on world debt. The two issues therefore go hand in hand. It would be easy for us to be accused of not complying with our own stated policy decision. It is therefore timely that this should be submitted to the new Ministers for Foreign Affairs and Finance. It should be the first item on their desks.

There may be a higher percentage of aid provided by other countries. However, my experience as a former Minister of State with responsibility for trade was that assistance provided to the Third World by the United States in particular was linked to trade contracts which benefited American companies. Would the group regard assistance to Iraq as aid to the Third World by the US? That would put the US percentage of aid far above the norm. Furthermore, is the enormous amount of fundraising for Third World countries that takes place in Ireland taken into account?

I was involved in establishing Kosovo Refugee Aid and we raised approximately £1.5 million at that time. Other organisations raised money for Kosovo. We have raised money for every other international problem that has arisen. People from Roscommon are building houses in South Africa. Is that taken into account? Our percentage of aid must be way up. I am talking about us as a people; the Government is only the representative. As a nation, our people must be one of the most generous in the world as far as the Third World is concerned. For example, we supported Live Aid and every problem that arose. I ask the delegations to bear that in mind and give credit, wherever possible, to the amount of voluntary contribution made from the foundation of the State and before to creating the world we live in today. We should be proud of our achievements but continue to strive for better and to increase the Government's, that is, the taxpayer's, contribution.

I fully support the delegations' aspirations. As far as the World Bank is concerned, I take the delegations' point. I was with it also but we were negotiating trade for the aid given throughout the world. It has a large trade side also because it can control who delivers.

As far as arms are concerned, fortunately from our point of view, because of a policy adopted by this and all Governments, neutrality meant non-production of bombs, bullets and all types of grenades. We certainly stayed away from that. The only effort to which we ever contributed was the production of some type of a military car in Meath. I am not sure if it is still in production. That was the only contribution we made to the military.

Chairman

Does Dóchas or the Debt and Development Coalition wish to respond?

Ms Somers

I will respond first to the issue about arms. The people within the countries receiving debt savings are keen that the money is well spent. This is why impoverished people are setting up systems to monitor how the money is spent by their own governments. Obviously, it is hard for them to control what happens in the case of arms. A study was done a year or two ago which looked at ten countries which had received some debt reduction. This study found that while there was an increase in spending on health and education, it did not find any evidence that the spending on arms in those countries had increased. That is tiny sign of hope.

Mr. Roche

I thank the Deputy for his comments and support.

Chairman

To which countries was Ms Somers referring?

Ms Somers

I do not have the list with me but I can forward it to the committee.

Mr. Roche

I will make a couple of quick interventions. I welcome the Deputy's comments on the arms trade. As it happens, Oxfam, together with Amnesty International and their affiliates around the world and a network of organisations called the International Action Network on Small Arms, is campaigning for the control of arms exports around the world. What we are calling for is the key instrument to do this — an arms trade treaty. This would be a global treaty which would ensure that arms exports are controlled and that irresponsible arms exports do not happen which might undermine human rights or sustainable development. That is the key instrument for which we are pushing. A number of states have indicated their support for it. We launched a campaign for it late last year. In due course we hope the Irish Government will support that initiative. We have indicated to the Minister that is our wish.

In regard to the links to trade, I agree there should not be conditionalities. A number of Governments include trade as one of the conditionalities. For example, the African Growth and Opportunity Act in the US has as one of its list of conditionalities the opening up of markets. Fortunately, the Irish Government in its bilateral funding has untied aid and we do not require the opening of markets or, for example, the purchase of Irish goods in exchange for our official overseas development assistance. However, there is one troubling issue, namely, the economic partnership arrangement between the European Union and African, Caribbean, and Pacific countries. Part of this happened under the Cotonou agreement which is the partnership arrangement between the European Union and the ACP states. The lines are becoming somewhat fuzzy between our trade negotiations on the one hand and, on the other, those states whose funding is provided through the Cotonou agreement under the EDF funds. At present, Ireland's claim to reach the target by 2007 is becoming more crucial. In recent years, five other states have also indicated they will meet the UN target of 0.7% in the coming years. In July, Gordon Brown, Chancellor of the Exchequer in the UK, announced his intention to meet the UN target of 0.7%. Our deadline arrives first. We were one of the first of these new countries to pledge it and we have the earliest deadline. To maintain that momentum, it is even more important that we meet our promise to reach 0.7%.

Mr. Zomer

: I thank the committee for the two interventions and particularly the statements about the generosity of Ireland, with which we agree wholeheartedly. In terms of the voluntary contributions, the 34 member organisations of Dóchas exist thanks to those contributions. We are very much aware that money is there. It is estimated that it amounts to approximately €80 million on an annual basis for the development non-governmental organisations as a whole. It is a massive amount of money. What we are about here today is the Government's aid programme.

The committee will be aware that 30 years ago a number of Dóchas members were at the forefront in asking for the creation of a Government programme because the Government has a different approach from the development NGOs and can play a different role. We have always been supportive of a Government programme for development co-operation. We welcomed the Government's decision to increase that programme to 0.7%. We had been calling for that. The Government took that decision and set that deadline. As has been rightly pointed out, it is now an issue of our credibility abroad. When the Government says it will deliver X by a particular date, it is up to the Government to do that. All we can say is we are very much behind the Government.

I gather from today's intervention that the Government has the support of the Oireachtas for reaching that target. What it probably needs is a gentle push. Certainly it would help if a multi-annual agreement was put in place in order that the overseas development aid budget does not fall back, as the former Minister said, given the vagaries of the budget process about which members of the committee will be more familiar. We would be pleased to see a multi-annual commitment to delivering on that growth. That would certainly help enormously in terms of our credibility and our reputation. Certainly, the point is taken about the generosity of the Irish people.

Deputy R. Bruton

Unfortunately I have an appointment at 1.30 p.m. and will have to leave shortly. I strongly endorse the proposal for a multi-annual agreement. It is obvious from the figures given here that since the Taoiseach's announcement in 2000, the level of aid declined in 2000, increased in the two successive years when there was a multi-annual agreement and was frozen in the two subsequent years when there was no multi-annual agreement. It is unacceptable for the Government to trumpet an objective of this nature without putting in place a multi-annual agreement. The Minister of State at the Department of Finance with responsibility in this area came before this committee. It was clear he was just repeating the commitment but with no understanding of any commitment to deliver in 2005. That is not an acceptable way forward. It is hard for Ireland to be credible on its debt policy.

The other side of the debt policy is that there must be increased aid. The way in which one relieves countries of debt is by replacing their commitments by aid commitments to overcome the debt problems. The multi-annual commitment is a core issue, as is ensuring we do not have to face this situation. Ultimately, when it comes to budget day and all Ministers are clamouring for their slice of the cake, overseas development aid funding loses out and, if it is not provided for by way of multi-annual agreement and decided well in advance, it will suffer. Perhaps we are fortunate in that the prospective Minister for Finance is the former Minister for Foreign Affairs. We are being asked to make representations to the Minister for Foreign Affairs. Perhaps it will be wrapped up in one application.

Parliamentary scrutiny could be developed in some of these countries, even if it is not possible to free up the decision-making process. That might be a useful route to travel. A parliament can scrutinise whether the policies endorsed, underpinned or pushed forward by the International Monetary Fund, IMF, are performing and the criteria against which they are performing even if in the short term we will not see the full delegation in terms of the decision-making process.

I was surprised there was no reference in the presentation as to whether the 1999 adoption by the IMF and the World Bank of the poverty reduction strategy was making a significant difference. The agencies continue to criticise the IMF and the World Bank but that was a significant shift in their ground from the one criticised by Stiglitz and others, partly from the inside. It would be interesting for us to know if a significant change is occurring or if it is just old wine put into new casks.

Chairman

Does anyone want to make an observation?

Ms Somers

On Deputy Bruton's question as to whether there has been a change since 1999, we were trying to be brief, although it is an important question. The evidence is that it is largely old wine in new bottles and the quote from the IMF would indicate why that would be the case. We met with the IMF in 1999 when it was introducing this new approach which, on paper, looks very good and the person working at the coalface said that he did not expect to see very different programmes being introduced as a result of this process. That is where the mismatch arises.

Much good has come out of the approach in that there have been much better debates on tackling poverty within the countries and there has been monitoring by civil society of the spending on poverty reduction, but the core macro-policies have not been put into the public arena and scrutinised. These are treated merely as technical decisions to be made. As the former President, Mary Robinson, said in one of her papers, a bad Minister for Finance can have a more negative effect on children's education than a bad Minister for Education. That is where the faultline in the process occurs.

Senator O’Toole

I thank the representatives for the presentation which was interesting and important. It is appalling that we have not made any progress on ODA over recent years but I have some sympathy for the Government position. When we beat ourselves over the head about these issues, which we should do, we should recognise, and I agree with Deputy Finneran in this regard, that in world terms we are not in the worst position in the league. It might be helpful if we could push the Government along on the basis that there is much international credibility arising from making our mark internationally.

We are politicians and the way politics works is that at some stage it responds to people. People do not know enough about the way the money is being spent. There is a need for a broader perspective in terms of the good that money can do in various places so that people can see where their tax euro are being spent. That is an important issue.

I wish to refer to another issue which I ask the representatives to address. I am always careful in my use of the word "poverty". We all know what it means, which is right in terms of general debate, but on occasions like this when we discuss money, etc. we should have a clearly understood international quantifiable poverty level. All the figures are available. We have all seen the levels of infant mortality and the levels of access to water, shelter and primary education. We could even consider it in terms of many of the goals of the United Nations. That is important because it is irrelevant for someone to talk about the average wage in Chad or somewhere like that. That does not mean anything and it sometimes gives the wrong impression.

I would outline our objective in terms of what we are trying to achieve, which is to get people above the poverty level. That means people who do not have a roof over their heads, access to running water and elementary education, an acceptable level, if ever that could be the case, of infant mortality and access to various health services. I realise I am painting broad brush strokes but what I have outlined would be helpful because it would get ordinary people involved in this area and allow them relate to these issues.

I had intended to mention the arms trade but I will not because it has been dealt with already. AIDS is too broad an issue to address but the trade connection is crucial. I am aware of the work Mr. Joyce has done over the years in the area of child labour and sweatshops, issues in which I have been involved as well. In terms of the reverse, I am always interested in what people can do here apart from writing cheques. It is similar to the waste issue. There are responsibilities on ordinary people. If they buy products that have been produced through the sweat of children who should be at school — the representatives know the speech better than I do — at the very least they should be made feel uncomfortable about that. I welcome the work their agencies have done, and Mr. Joyce in particular, in these areas.

On the question of genetically modified crops, I am not a strong GM objector. I am prepared to tolerate them in certain instances but I am opposed to genetically modified crops being introduced in the production of rice in a country because once that happens, the only products that can be used to control that crop are products which have to be bought from the same people who made it freely available in the first place. I do not want to go on about these issues because I know the time is short but these issues, including dumping, are related. That is why the presentations from the various groups the witnesses represent were so welcome. I realise I am straying from the two narrow areas under discussion but I do that deliberately and I give an undertaking to raise those issues. I welcomed the major improvements in overseas development aid by the Fianna Fáil-Progressive Democrats Government in the late 1990s and I would like it to do that again after the next budget. I give credit where it is due but it now needs to be done again.

I thank the representatives for their presentation. I do not make these points in a critical way but to be helpful in moving matters forward and getting ordinary people involved.

Mr. Roche

I would like to respond and I am sure Mr. Zomer and Mr. Joyce would like to comment also. I agree with Senator O'Toole's point about public communication in terms of the way ODA is spent. As an aside, it is interesting that this week a five part documentary series began on RTE which was partly funded by Development Co-operation Ireland.

Senator O’Toole

Was it on at 11.30 p.m.?

Mr. Roche

Exactly. Very late.

Senator O’Toole

I had a good intention but I had a 7.30 meeting the following morning.

Mr. Roche

The Senator is not the first person I have met who had the intention, as someone who is close to development knows. Highlighting the issue is part of the problem.

On the issue of income, one of the millennium goals is to halve the number of people living in absolute poverty by 2015 and the measure being used is those who live on under $1 a day. Currently, 1.2 billion people live on $1 dollar a day and with the expected growth in population, that figure will most likely increase. The idea is to halve the number which currently would be 600 million. That is a simple, measurable example of what is absolute poverty that can be communicated to the public.

With regard to the Senator's question on trade, an area on which we have done considerable work in conjunction with NGOs and trade unions, a striking statistic is that the OECD spent almost $2 subsidising every cow in OECD countries. That gives members an idea of the challenge facing us.

Senator O’Toole

In media terms, would it not be helpful if members of the organisation Mr. Roche represents said they are all in favour of free trade but it is a pity America is not? Its organisation is being presented as being the opposition to a good idea. I refer to a situation whereby the provisions of the Treaty of Rome could be applied globally and people could work where there was money to be made or sell products where they could do so, although I accept that is a simplistic example. However, it would be helpful if the organisation took the other side and pointed out that America is in the wrong on this one. It is not allowing free trade.

Mr. Roche

We have talked a good deal about trade.

Chairman

Does anyone wish to make a final comment?

Mr. Zomer

I thank Senator O'Toole for his comments. He made the important point that ultimately public pressure brings about change. For the Senator's information, Dóchas has 34 members. Almost every one of them is engaged in activities in what we call development education which involves talking to schools, youth groups around the country about not necessarily how much aid there is but about issues concerning what is global poverty and what exactly does it mean. I am pleased the Senator mentioned Chad. I spent two and half years there. I can tell the Senator what poverty looks like in reality but that was not his question. He said that we need to get that message across.

Senator O’Toole

The reason I mentioned Chad was because I checked it some years back and in terms of what free trade has achieved, the relationship between the average income in Chad and the US is worse now than it was in 1960. That was in my mind when I was speaking to the representative.

Mr. Zomer

Chad is a good example because it also has oil. Everyone would think that is a blessing but it has turned out to be a disaster for countries like Chad and Sudan. Trade is a good thing but unfortunately matters are not so simple. The challenge to us is to communicate those complexities to the public. We as development NGOs are engaging with the media and the private sector in regard to that challenge and how to get across that understanding. I thank the Senator for his encouragement.

Mr. Joyce

We in the trade union movement are disappointed the issue of child labour was not specifically identified in the millennium development goals. Trade and the creation of jobs are a way out of poverty for people, but unfortunately the quality of those jobs and the conditions in which many people work as a result of globalisation is not a developmental experience for them. Work in some of those conditions can be damaging. There is a huge need for the social aspect of globalisation to be addressed rather than to be simply included in trade discussions.

Chairman

I thank the representatives of Dóchas and the Debt and Development Coalition Ireland for their contributions. The discussions were useful from the point of view of our committee.

The joint committee adjourned at 1.35 p.m. until 2 p.m. on Tuesday, 28 September 2004.