SELECT COMMITTEE ON FINANCE AND THE PUBLIC SERVICE díospóireacht -
Tuesday, 29 Jun 2004

International Development Association (Amendment) Bill 2003: Committee Stage.

SECTION 1.

Chairman

The purpose of the meeting is to consider the International Development Association (Amendment) Bill 2003 which was referred to the select committee by Dáil Éireann on 3 June 2004. I welcome the Minister of State at the Department of Finance, Deputy Parlon, and his officials.

Before I come to amendment No. 1, I draw the attention of members to a typing error in section 1, page 3, line 20. The amendment tabled by Deputy Burton proposes to correct this error. I am advised, however, that it can be rectified by a Clerk's correction to the Bill when it is next sent for print. If members are agreeable to this, it will not be necessary to amend the Bill at this stage. Is that agreed? Agreed. It is not necessary, therefore, to move amendment No. 1.

Amendment No. 1 not moved.

Question proposed: "That section 1 stand part of the Bill."

Mr. R. Bruton

Since the Bill has only two sections, we had better not let section 1 pass without comment. Essentially, it provides for an increase in the payment made by the Government to €50 million. Of course, this is welcome but I would be interested to hear the Minister of State's comments on the adequacy of the International Development Association's work in this field. Perhaps he will comment on the progress being made in targeting the most disadvantaged countries, particularly in Africa, and whether the scale of the resources being made available is having a tangible impact on the problems faced. Perhaps he will also refer to the adequacy of the international effort to support development aid. In recent years, with something of a halt being put to economic growth, there seems to be a squeeze on development aid resources. I would like to know what the up-to-date position is.

Will the Minister of State comment on the Government's proposals to achieve the ODA target of 0.7% of GNP which it had hoped to achieve within a seven year period but at the halfway mark seemed to be only one quarter of the way there? Will the Government be accelerating its contribution to development aid to meet the target it has set itself?

Since Second Stage, a number of international developments have focused on AIDS, in particular, and international development aid. Will the Minister of State care to comment on whether more resources are being made available under schemes such as this and whether Ireland should take an initiative to accelerate its own aid programme in response to growing needs?

Ms Burton

On Second Stage I raised a number of issues. Professor Joe Steiglitz, Nobel Prize winner for economics, who was in Dublin last week, spoke at length about the governance of the international financial institutions. He spoke of how countries such as Russia and Argentina had been given a certain formula which had had disastrous consequences and resulted in large-scale impoverishment, whereas in the case of other countries the United States, as the main mover with the international financial institutions, had taken a noticeably different line. For instance, it has asked for debt forgiveness for Iraq. This is understandable because most of the debt is not owed to the United States, whereas in the case of Argentina much of the debt was owed to US banks.

This brings me to the point I made on Second Stage. Within the Department of Finance, is there a higher level of acknowledgement of the disaster for the developing world of the continuing failure to reform the monetary institutions associated with international development aid? There has been an attempt to reform the World Bank resulting in modest success but large parts of the developing world, Africa in particular, remain heavily burdened by a debt regime which soaks up most of their current budgets.

The Minister for Finance is fond of presenting himself as ultra-orthodox and right wing on financial matters. This is very much part of the Progressive Democrats view rather than the traditional Fianna Fáil view which would seek a more balanced approach to economics. Is the Department of Finance prepared in a serious way to use its role in international fora to highlight the plight of the poorest people in the world in regard to international development? Other than receiving representations from time to time from the Debt Relief Coalition and Dóchas, a network of development NGOs, does it have any mechanisms to provide for public accountability and transparency in regard to its role in a number of international bodies, particularly the monetary institutions and development banks?

I have no problem with the amounts being voted. I worked in Africa for three years and get an opportunity to go back from time to time. I follow the issues closely. The reality is that most countries in Africa have become much poorer. Those countries which have often been held up as good examples of countries which have performed well such as Mozambique and Uganda are still unbelievably poverty stricken and burdened by a vast debt. While they are supposed to be beneficiaries of the HIPEC initiatives, the outcome from them has been deeply disappointing.

Many of the capital based projects are years behind target. This also applies to the banks and the International Development Association. On the actual workings of the projects, huge amounts are done by western consultants from the different banks and they are very slow. While a lot of them are necessary and essential — I support them in that sense — the rate of progress is incredibly disappointing. The statistics show how much poorer Africa has become in the last ten years. Virtually every African country has been forced to adopt the IMF recipe which, rather than working, has helped to beggar them further.

The Minister of State may have seen reports on Professor Steiglitz's lecture in Dublin last week. I wonder if the Department of Finance has a response to what authoritative figures are saying and if, in practice, Ireland uses its position to influence for the better what is happening in the international institutions.

Caoimhghín Ó Caoláin

I was just going back over my contribution on Second Stage on the International Development Association (Amendment) Bill 2003. One of the points I made was that fundamental reform of both the World Bank and the International Monetary Fund was clearly needed. I pointed out that we were all aware of the way in which these bodies had been used to pile further debt on already heavily indebted countries, with loans tied to a strict model of economic management with damaging consequences.

In the course of the Second Stage debate in December 2003 I asked the Government if, during its Presidency of the European Union, it would support the proposal from the South African Minister for Finance, Trevor Manuel MP, to establish an independent expert committee to study the issue and propose reforms of both the IMF and the World Bank. On the eve of the last day of the Irish Presidency, I ask the Minister of State what steps were taken in the course of the last six months to address this proposal. If I anticipate a negative reply, what commitment can he now give that co-operation will be forthcoming from the Government with the South African Minister for Finance's appeal for reform of both the International Monetary Fund and the World Bank? Perhaps the Minister of State will have a more positive reply, in which I have no doubt that we would all be interested.

I identified four issues which I asked the Government to prioritise during the course of the six months of its EU Presidency and ask the Minister of State to give us a snapshot of the efforts made in that time to progress, for instance, the case for debt cancellation for developing countries. This is a priority for those countries suffering the scourge of HIV-AIDS. Another was the reform of the international financial system, and the steps that would be taken to ensure a stronger voice for developing countries. I proposed that the European Union adopt a code of conduct for participation in trade negotiations. What can the Minister of State tell us in that regard?

The third issue was poverty eradication as a guiding principle in EU external action on trade, and the fact that there should be an EU monitoring group to review member states' implementation of their commitments to increase aid. The fourth was an appeal to the Minister to once again revisit the proposals on the Tobin tax. As with the other three issues, I would like to know what the position has been in the last six months. We know that the Minister has opposed the idea of the Tobin tax but we can only hope his widening of horizons and experience in the last six months has introduced him to a different way of viewing this proposition. We would be very interested in what the Minister of State has to report on these areas.

The Minister of State must recognise that there is real concern that the Government will not reach its target to increase overseas development aid to 0.7% of GNP by 2007. Recognising that we are behind schedule, what measures will now be taken to ensure the target is reached? Is the Minister of State confident that it will be reached? If so, will he reaffirm to us the formula that will be employed in each of the remaining years up to 2007 and that the figure of 0.7% of GNP will actually be reached?

Mr. Finneran

I welcome the Minister of State and wish to make a number of points. It is an indictment of the democracies of the world that 3 billion people live on less than €2 per day and that over 1 billion live on less than €1 per day. That is an indictment of the international community, in particular western democracies and those countries which have advanced technologies and the wherewithal, yet there is massive poverty throughout the world.

In the context of this Bill, the Government's contribution of €50 million to the International Development Association is to be welcomed. The programmes that it is and will be involved in will contribute to poverty reduction and promote growth and development. However, it is not the full answer to the difficulties faced. There are many areas about which a lot of people have concerns and in which some of our voluntary agencies have played a part.

The Irish Presidency chaired a successful EU-US summit. While many focused on the positions of the European Union and the United States on Iraq, many other issues were discussed at the summit, one of which — the steps which can be taken to arrest the proliferation of the HIV-AIDS virus — is very important. A major problem which has bedevilled attempts to tackle this during the years is presented by the reluctance of successful major pharmaceutical companies to make drugs available at reasonable cost to many of the states which cannot afford them. I do not know the detail of the discussions on some of these important issues. I understand, however, that eight agreements were reached last week, one on EU relations with Iraq.

Two areas which need to be addressed in the Third World are health and education. Education is of vital importance to Third World countries as it is the only way they will get out of the mire. To do this, there must be better health supports, including the provision of clean water, housing, etc.

While the Bill is important, there is a broader picture. The Minister of State might elaborate on the overall position if he has such information to hand. Some of the questions raised related to Ireland's desire to reach a certain level of support from Exchequer funds by 2007 but there is a need for more than an Irish response. While there must be a major EU response, a major EU-US response would probably be more appropriate.

Minister of State at the Department of Finance (Mr. Parlon)

I thank Deputies for their comments and the profound questions raised. As the committee will be aware, the International Development Association, IDA, originated from the World Bank, of which it is the concessionary lending window. When the World Bank was formed in 1944, the initial purpose was to deal and invest in war torn Europe. Europe has since moved on and the main focus of the IDA's investment is now on Africa where AIDS and HIV present the two major problems. Apart from the great agreements reached between the United States and the European Union on further investment, the World Bank and the IDA are the largest institutional investors in AIDS projects. The figures are frightening. The HIV-AIDS pandemic has killed 23 million people of the 63 million infected. It has left 14 million orphans worldwide and countries in Africa without a population of working age. It has also killed care workers and teachers.

Deputy Bruton asked about the benefit of investment. It is of tremendous benefit. The only downside is that there is not more money available. Ireland's contribution of €50 million over the next six years is the result of international agreement based on our size and wealth.

I was asked if we were likely to reach our target for ODA. The provisional figures for 2003 show spending at 0.41% of GNP. By comparison, Ireland is the seventh biggest spender well in advance of the EU average. We are committed to reaching our target. I hope increased allocations in coming years, the scale and timing of which will be considered on an ongoing basis, will make it possible for us to reach the target of 0.7% by the end of the Government's term of office. It is a challenging target. We are two years into the current term of office of the Government and I hope that with this investment of €50 million over the next six years, together with other ODA investments, we will reach our target.

Deputy Burton referred to Professor Steiglitz whose books have been critical of all IMF policies during the years. No doubt organisations such as the World Bank, the IDA and the IMF need continued monitoring.

Ireland supports debt cancellation which the Taoiseach supported recently at the G8 meeting in the USA. This is a positive move which will be of major benefit to the countries concerned.

On control and monitoring, Ireland produces an annual report on its participation in the IMF and the World Bank. We have a 0.39% share of the IMF's capital.

I have addressed most of the issues raised. The issue of trade is not one for us. The Bill is about Ireland, as one of the wealthier states, making its rightful contribution to the poorest of the poor. As Deputy Finneran stated, IDA expenditure covers the poorest of the poor, both in terms of capital and the challenges presented such as poverty, HIV-AIDS and political conflict.

I commend the Bill to the committee. That is not to say, however, that we should not be conscious of the need for continuous control over how even a modest contribution of €50 million is spent but it is important that we expedite our expenditure. We are coming close to the end of the session and the Government is anxious that the Bill progresses and that we make this investment which will help us in achieving our challenging commitment to provide 0.7% of GNP in overseas development aid by 2007.

Ms Burton

I appreciate that the Minister of State may not be in a position to reply in detail but the purpose of my question and references to Professor Steiglitz was to find out if there were any ways in which Ireland had been proactive in terms of the Minister for Finance's participation in the deliberations of the IMF.

During its last term the Government signed up to the heavily indebted poor countries, HIPC, initiative which as everybody knows is a complete and utter disaster. Most of the money remains unspent. Presumably the Department of Finance advised the Minister that it ought to be taken up. The benefits of the HIPC and similar related initiatives derived by countries — supposedly the star countries from the point of view of the IMF — have been insignificant compared to the scale of their needs and the benefits of alternative development initiatives. For instance, if most of Africa had the benefit of a development approach based on the kind of assistance that we have got to date since the time of our membership of the European Union, the consequences for Africa would be entirely different and far better.

As I said, I do not expect the Minister of State to have a detailed answer here, and in many ways my question is directed to the Department of Finance. The then four poorest European Union member states — Ireland, Portugal, Spain and Greece — benefited enormously from a combination of direct transfers, soft money, matching funds and so on a very generous basis which did not drive their debt burden off the wall. The consequences for the EU and for those countries has been a tremendous rate of growth, as everybody acknowledges. Ireland, for instance, invested heavily in education, which in turn was one of the major factors producing employment growth from 1993 onwards.

We have, and are often fond of talking about, a formula which has worked in the case of Ireland and most European countries since the Second World War. Will the Minister for Finance and his Department take a positive approach to get out of the appalling straitjacket that the IMF has imposed on very poor countries, that has driven countries like Argentina and Brazil to the brink of starvation and also severely damaged Russia? Based on IMF advice, all of Russian publicly owned industry was sold for a song to the oligarchs. That IMF recipe was made out of the suitcases of people acting as consultants and who checked into hotels for a few weeks. It is probably one of the greatest impoverishments ever seen of any country.

Does the Department of Finance have a different view? Is it prepared to look at alternative economic recipes so as to seek to reform the IMF and the Bretton Woods institutions with an agenda which is pro Africa and pro the developing countries? I do not suggest this is easy or straightforward, but the current system is a disaster, particularly for Africa. Africa is getting poorer and poorer. Even leaving aside the HIV-AIDS problem, the IMF recipe has not worked there.

The Irish aid programme does much good, as do the aid programmes of other countries, but they are a drop in the ocean compared to the power of the IMF, the Bretton Woods institutions and their related bodies because of their control over issues such as how Governments finance development, basic budgets and so on.

Caoimhghín Ó Caoláin

I restate that fundamental reform of the World Bank and the International Monetary Fund is an absolute requirement. In his reply the Minister of State did not refer specifically to the proposal of the South African Minister for Finance, Trevor Manuel MP, for the establishment of an independent expert committee to study the whole area and initiate reforms. We must recognise that Europe is over-represented and that the voting situation is completely kinked against the developing countries, which most need the support and aid.

We need to see more regional representation and a more fair and equitable distribution of opportunity. Will the Minister of State indicate if the Government supported the establishment of an independent expert committee? If he is unable to do so, will he undertake to respond to myself and other Deputies in regard to the Government's intentions on this specific proposal, which makes eminent sense and should have the support of the Government?

The Minister of State referred to debt cancellation for developing countries, particularly those dealing with HIV-AIDS, which was one of the four propositions I put in December 2003 in the course of the Second Stage debate. The Minister of State expressed good intent, but can he translate that into the commitments made in the past six months of the Irish Presidency? Will the Irish Presidency be remembered only for the EU Constitution and the successor to Romano Prodi as President of the EU Commission, to be confirmed later this evening? Is there anything more substantive, in particular in regard to those countries suffering the scourge of HIV and AIDS?

I noted a lack of confidence on the part of the Minister of State in regard to the development aid target of 0.7% of gross national product, GNP, by 2007. His response did not indicate any certainty on the matter. It was a defensive position in regard to where we stand by comparison with other EU member states. I again ask the Minister of State to reaffirm the Government's commitment and outline exactly what steps will now be taken to ensure that the target of 0.7% is reached over the remaining three year period. His reply suggested a lack of confidence, and I hope that should not be interpreted more widely as a lack of intent. Thus, I invite him to offer a more definitive response which would clearly assuage any fears in regard to the Government's commitment to reach that target.

Mr. R. Bruton

I wish to continue in the vein of Deputy Ó Caoláin. We can clap ourselves on the back and say that we are all concerned about development, but it comes down to what will be in the Estimates published in September or October. In 2003, I understand the Minister of State secured approximately €26 million more for development aid, which was just about marking time. We made no progress in increasing the percentage of GNP devoted to aid. The 0.41% that the Minister of State quoted in respect of the 2004 provisional Estimate was the same as the year before.

If we are giving approximately €500 million, then just to mark time next year we will have to find an extra €30 million. If we are to meet the target by 2007 and do it in three equal stages, we would need another €125 million on top of that in each of those years. In broad terms, we need €150 million extra in the Estimates this autumn, and the same in each of the following three years, to achieve the target.

I invite the Minister of State to outline his ambitions in this area. Would we be fair in judging that if the Estimates, when published in November, include less than €150 million, the Government has failed in its commitment? Was the allocation of an extra €26 million last year an extraordinarily bad performance in regard to that commitment? I am sure the Government would say that it was making room in other spending areas, but I ask the Minister of State to be more specific. What is his ambition for the increase this autumn?

The Estimates debate is only starting, but who will be championing the cause within the Department of Finance to get the figure up to the €150 million, which is the minimum required? Will it be the Minister of State, the Minister for Finance, Deputy McCreevy, or will it be left to people outside of the Department to present the case to it, with the Department in its traditional position of refusing to give that much because it is of a secondary order of importance?

We need to pin this down as we will probably not get a chance to revisit this issue between now and the Estimates. If the Minister of State can only say that he has no idea and there is no commitment from the Government, that will be a disappointment to observers. The Government needs to come clean on what it hopes to achieve in reaching the target over the next months. We can then cope with the following two years as we go along.

Mr. Parlon

Deputy Burton compared the European investment made in supports to Ireland to what is being made in Africa. No doubt sound economic policy by the individual countries had a major impact. She referred to the investment made here in education and the benefit which that brought to our own development. The pro-enterprise and pro-jobs policies that have been pursued by Irish Governments over the past 20 years have also had a major impact. Clearly if one does not have a stable political situation in a government, one can burn money or blow good money after bad. That has been a large part of the difficulty in Africa.

Ms Burton

Is it the view of the Department of Finance that spending money on development in Africa is blowing it away? It shows the gulf of understanding between us. It is worthwhile having this debate.

Mr. Parlon

No doubt the Deputy has a monopoly on understanding of the Third World countries which I would not understand from her point of view.

Ms Burton

I worked there for a long time.

Mr. Parlon

She interrupts every time I seek to make a comment. I have listened to her questions and I will attempt to answer them, if that is possible.

Chairman

The Minister of State has the floor.

Ms Burton

I spent much of my life working there and I know quite a bit about it.

Mr. Parlon

I am not contradicting the Deputy.

Mr. Finneran

I am sure the Minister of State is not ignorant of the Third World situation. He had much involvement in the international environment in his previous position.

Chairman

The Minister of State to continue without interruption.

Mr. Parlon

We referred to the need for reform of agencies like the IMF. No doubt money has been wasted in Africa. Considering the pressure on developing countries to provide aid, it is important that it is used to best effect. The money that was invested in the Irish economy by Europe was used to best effect by stable government and by sound economic policies. That has been absent in the past in the case of much of the African investment. There will be major challenges for the governments of the countries involved in the future.

I have seen Irish agencies in action. I visited Self Help Development International in Ethiopia and saw tremendous projects but, as the Deputy stated, they are drops in the ocean in terms of what is needed. We must learn from the positive development.

The Deputy compared how money was spent in Europe and in Africa. It was stable governments, sound economic policies and wise decision making which delivered. That challenge will continue. There is continuing need for investment in Africa to deal with the growing challenges, and particularly HIV-AIDS.

Ms Burton

Is the Minister of State stating that the Government is opposed to large scale funding of development in Africa through institutions like the IMF?

Chairman

Let the Minister of State finish without interruption.

Mr. Parlon

I do not recall stating any such thing.

Ms Burton

That is what he is implying.

Chairman

Let the Minister of State continue without interruption.

Mr. Parlon

Deputy Burton and Deputy Ó Caoláin referred to the Government's overseas development aid programme. Deputy Ó Caoláin inferred, whether from my tone of voice or my body language, that I did not show sufficient confidence in our ability to reach the target set. I have great confidence in us reaching our targets in all the different areas that we have addressed. The sum of €400 million plus we are contributing at present forms just 0.41% of our GNP. As our economic situation improves other challenges will arise but despite that we will strive to reach our target and I am confident we will do so.

I mentioned that Ireland is proportionately the seventh best performer in the world in this area. Denmark, at 0.96% of GNP, is the best performer. France is beneath us, and so are Spain, Austria, Japan, New Zealand, Greece, Italy and the United States, which is at 0.13% of GNP. If everybody was making a contribution in overseas development aid comparable to that of Ireland, there would be a massive budget to distribute which would go a long way. That is not to say that money will solve all of the problems but it would go a long way towards solving them. With regard to the involvement of the Minister, Deputy McCreevy, when he spoke on behalf of the EU it was to support and encourage increased investment from across the rest of the developed world, and particularly the EU, in overseas development aid.

Deputy Ó Caoláin referred to some of the matters for which Ireland's EU Presidency might be remembered. He fleetingly referred to the EU Constitution as if it was a little piece of paper that somebody drafted. I would remind the Deputy that this is one of the most historic constitutions of all times.

Caoimhghín Ó Caoláin

That depends on one's perspective.

Mr. Finneran

Deputy Ó Caoláin's support for EU institutions is well known.

Mr. Parlon

I would also remind Deputy Ó Caoláin that we also held the Presidency during the historic enlargement of the EU from 15 to 25 member states and we also should be proud of that. Likewise we should be proud of playing our part in restoring EU-US relations, which, unfortunately, had deteriorated to a new low and had caused concern for international peace. We provided a major input to strengthening that relationship. In addition, all the indications are that there will be a successful outcome to the search for a successor for President Prodi. I would not like to see anyone discounting these matters.

Caoimhghín Ó Caoláin

Would the Minister of State be specific on the cancellation of debt in the developing countries?

Mr. Parlon

I would not like to see our Presidency success discounted.

Caoimhghín Ó Caoláin

I was not proposing that he give a paper on it. It will do to address the point on the cancellation of the debt of developing countries, with a specific focus on those who are trying to deal with the scourge of HIV-AIDS. The Minister of State was not specific in his earlier reply and I invite him to return to it. What has been achieved in the course of this Irish tenure of the Presidency? Would he spell that out for us?

Mr. Parlon

May I continue, Chairman? The Deputies got a good opportunity to ask questions.

Chairman

We are concluding at this stage.

Caoimhghín Ó Caoláin

What about my question?

Mr. Parlon

Deputy Ó Caoláin referred to the South African Minister for Finance, Trevor Manuel MP. He is chairman of the development committee which is concerned with World Bank governance. I am not aware of the proposals to which the Deputy referred. Mr. Manuel is in a strong position in terms of bringing in new best governance practices. As some of the Deputies stated, there is scope for improvement in that regard. Somebody like Mr. Manuel, with international support,——

Caoimhghín Ó Caoláin

Will he have Irish support?

Mr. Parlon

Yes, and it will be forthcoming. It is important that our contributions be used to best effect, whether it be the sum of over €400 million this year or the 0.7% of GNP, when we reach our target by the end of the term of this Government. In terms of making an economic argument to whatever Minister for Finance may be in office by the end of this Government's term of office——

Ms Burton

The Minister of State is expecting a change too. That is interesting.

Mr. R. Bruton

Chairman, I asked a specific question about the development aid. If we are to move towards our target, €150 million is needed in the Estimates this autumn. The Minister of State, instead of answering that question, moved immediately to say that Ireland is doing better than others. There is a specific commitment that Ireland will raise aid by €150 million per year in each of the next three years in order to meet the target. Will the Minister of State be the champion of that commitment? When we look at the Estimates next autumn, can we expect to see at least the first tranche of it delivered?

Caoimhghín Ó Caoláin

The Deputy's question and mine may be taken together.

Mr. R. Bruton

I want that question answered.

Caoimhghín Ó Caoláin

As do I. It was also my question earlier. I will not repeat Deputy Bruton's question, I endorse it. This is my third time to ask the Minister of State the following question. What progress has been made on debt cancellation for developing countries, with a priority for those countries worst affected by HIV-AIDS? Will the Minister of State indicate exactly what progress has been made in the course of the Irish Presidency of the European Union?

Mr. Parlon

With reference to Deputy Richard Bruton's question, the Minister of State at the Department of Foreign Affairs, Deputy Kitt, is responsible for development aid and I will not anticipate his views or the job he is doing in that regard. I know he is a very strong advocate for increased levels of development aid. Neither will I anticipate the next Budget Statement. I am sure it will bring fresh surprises and some very positive news in terms of meeting the Government's commitments, including those set out in the programme for Government.

Mr R. Bruton

Is the Minister of State sure of that?

Mr. Parlon

I am sure it will but——

Mr. R. Burton

That is reassuring.

Mr. Parlon

That is an issue for the Minister for Finance of the day and I have no doubt that he will do it. We have been strong advocates of the cancellation of world debt and supported it at the recent G8 summit. However, it is not a view that is universally held by other countries and there is very strong opposition. We are one voice in the wilderness and some of the countries with much greater exposure than us will have their views. There has been a successful agreement on cancellation of the Iraqi debt, but there has not been success otherwise. That is something we will——

Ms Burton

It is because the US holds most of the other debt.

Mr. Parlon

It would be very easy for Ireland, which is not exposed, to recommend the cancellation of a debt held by somebody else. That is an issue for the US——

Ms Burton

That is my point. The US holds almost no Iraqi debt, yet it has acted very severely in regard to countries such as Argentina but has asked debt holders to cancel Iraqi debt. The Minister of State has just lauded our Presidency of the European Union, and in view of the re-building of EU and US relationships, did the Minister for Finance put the case for debt cancellation for other poor countries, as the United States successfully argued to European countries in favour of Iraq?

The question is simple. Did we act as a serious hitter? The Minister of State said Ireland is a voice in the wilderness on this issue but that is not the case. We are a small country which can exercise some influence if it uses its position carefully. That is what we are asking. Was Ireland an advocate of debt cancellation?

Mr. Parlon

Yes, and not just among the poor countries. At the G8 meeting of the wealthiest countries we proposed and supported it, but we have not been totally or even marginally successful. We are an advocate of it and will continue to support it.

Question put and agreed to.

Section 2 agreed to.

Title agreed to.

Bill reported without amendment.