House of Commons Hansard Debates for 14 Dec 1990

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of the whole population in southern Africa and re-establishing proper trade, social and cultural relationships with it.

I should like to see that quality of aid extended to our whole aid programme. We have a problem, in that we have always been wary of being called neo-colonialists. Government aid programmes are rigidly Government to Government. The administration of both British programmes and European development fund programmes run by the directorate general VIII needs to be more flexible. Programmes are dominated far too much by what the host Government believe should be done and too little by what we regard as the priorities in that country. Particularly when we are dealing with Governments which have failed, are corrupt or have "inappropriate economic policies"--in the jargon of the aid programmes--the wisdom of continuing to support such programmes is questionable.

For example, in Zambia we support the education programme, when the Government themselves are not prepared to put money into it. The result is that the whole education programme is spiralling downwards into an unacceptable quality. If the Zambian Government refuse to put their money in but demand that we put our money in, we should say no. We must tell them that they must put their money in. We want to help but we cannot do so if they refuse to put money in and use it instead to build huge party headquarters or headquarters for the Government copper company, while denying it adequate money for investment to enable it to compete with other copper-producing countries worldwide.

We cannot and should not tolerate that kind of distortion. We must rethink our aid programmes so that they are well directed to the poorest people and have aid objectives with which we agree. Obviously, they must be agreed with the host country too, but they should deal with matters about which we are enthusiastic, and they should go in the direction that we think is right.

That requires stopping the administration of the aid programme as it is done at present. The three-year rolling programme is pre-set and inflexible. Each country gets a little bit. A country received so much previously, so it gets the same sum this year, plus a little extra for inflation. That aid framework programme must be revised. We must be able to respond more easily not only to immediate problems, such as hurricanes and famines, but to the changing picture within those countries and our perception of them.

The aid programme must be strongly connected to private enterprise and investment. When private investors go to the aid programme administrator, they must not hear, "Our money is wholly committed for three years. We do not have any. Go away and find somebody else to help with your project." In the past two months, when I was in Southern Africa, I was told that the private sector had nothing to do with the programme of the Overseas Development Administration. That attitude must change.

I am delighted that we are beginning to change the attitude between the ODA and the Commonwealth Development Corporation. As hon. Members will see from publications, when the ODA is asked what the private programme is, it says that it has the CDC. Indeed, it has, and the CDC does excellent work. However, there is competition between the ODA and the CDC for funds from the aid budget. As a result, instead of boosting and developing CDC-ODA programmes, the CDC is starved

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of the money necessary to do the work. The sum needs to be doubled or trebled. I am surprised that a Government who are as devoted as I am to private enterprise as the engine of growth in third-world countries have not done more.

I am delighted that CDC and ODA representatives are now meeting and beginning to plan joint projects. For example, one would normally expect a forestry project to have roads, telephone systems, electricity and so on. ODA grant money is needed to provide the electricity, housing, roads and infrastructure, and CDC investment is needed for a properly conducted timber project which does not destroy but harvests the forests, and which continues to encourage its redevelopment. I hope that we shall see much more of that sort of combined project, which has just begun.

We must ask the ODA to think about its programmes in relation to private investment. It is only the resumption of private investment which will address the poverty problems. It is only with private investment and private initiative on the part of the inhabitants of the host country and with inward investment from abroad that we shall begin to see the economic development which is vital, if those countries are to recover any economic prosperity and to provide schools, education and health care for women and children. In that way, they can begin to help themselves, which is an objective stated in the ODA's report.

It is vital to get the politics right. In his speech in June to the all- party group on overseas development and the Overseas Development Institute, the Foreign Secretary set a new tone when he said that we cannot go on lending to countries with Governments who are not accountable to the people, where the rule of law does not apply, where there is no freedom of the press and where we are confronted with trade barriers. Those countries must lower their barriers to allow trade, just as we must under the general agreement on tariffs and trade, which we failed to do in December, but which I hope we will succeed in doing in January.

Restrictions on trade, for example in textiles, are incredibly damaging to the ability of those countries to recover and to begin to earn their own living. We must lower our barriers, so that we in turn can ask them to lower their barriers to allow trade to flow, develop and grow. Failure to do so will plunge us into a 1930s-1940s depression. People will not be able to trade with each other and we shall not be able to get the growth which is vital if we are to have any chance of dealing with the increased population, which my right hon. Friend outlined so ably to us.

Although our aid programme is not sufficient and although we may need to adjust its direction and emphasis, it is a most valuable contribution to many countries throughout the world. We should be proud of the increase in real value terms. Let us encourage the Government to increase it further. Let us encourage the Government and the Opposition to be constructive, so that we can be proud of what our country is doing.

11.46 pm

Sir David Steel (Tweeddale, Ettrick and Lauderdale) : It is always a pleasure to follow the hon. Member for Hertford and Stortford (Mr. Wells) in these debates. I have always regarded him as one of a small minority of

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Conservative Members who speak with great knowledge and genuine concern on this subject. In particular, I agree with him about the excellent programme organised by our embassy in South Africa which I have seen. He will agree that some of the structural lessons from it do not apply to conditions other than those in South Africa. Would that they did. However, he is right that there are some lessons to be learnt from the effective nature of that modest but invaluable programme.

Before I turn to the main subject of today's debate, I wish to pick up what the Minister said about the famine in the Horn. There is a sense of public disquiet, nay outrage, that four or five years after the great emotional public response to the famine in Ethiopia, we should again ask people to dip into their pockets. It is not that they are reluctant to do so again, but they are asking what we have done since that great appeal to put right the situation in that and other parts of Africa. I have two suggestions to make to the Government.

First, as the Minister said, civil war exacerbates conditions of famine. That is true not just of Ethiopia, but of Mozambique, Angola and other countries. Those wars would not continue if we could starve the countries of their supply of arms. Now that we have a politically more effective United Nations organisation, it is time to revive the proposal of Hans Dietrich Genscher, the German Foreign Minister, for a United Nations- organised, international arms sales register. We in the west cannot continue to allow our private companies to profit from massive arms sales to all parts of the world and then wring our hands when civil wars continue. I should like the Government as a matter of policy to take action in the United Nations to stop the supply of arms to those areas, so that resources that are wasted on armaments may be put to peaceful uses. The figures are appalling. In the past few years the Governments of developing countries have spent double on arms what they have spent on health and education. We cannot be surprised that tragedies such as that in Ethiopia continue year after year while some people profit from the arms trade. The Government should make that issue a priority in their mission in the United Nations.

I do not know of the experience of other hon. Members, but I am struck by the number of young people in our country who want to find an outlet for their idealism and energy through service in the third world. Although the Government support Voluntary Services Overseas, it is aiming to increase its volunteers to a modest 1,500 next year. We should return to the spirit that was prevalent in the mid-1960s in Britain and America. Then there was a great well of organised support and qualified young people to go out to help the third world. Such voluntary work is cost-effective. People are willing to increase knowledge about the growing of crops, and organise irrigation schemes, engineering works, water supplies, immunisation programmes and family planning programmes. We should do a great deal more to harness the desire of so many people to undertake such voluntary work. Official Government-to-Government programmes are welcome, but voluntary assistance has a great role to play.

This debate is welcome, despite its thin attendance. It is held against the continuing background of the disproportionate allocation of resources and population on the globe. One quarter of the world's population lives in the rich north and we enjoy four fifths of the world's income

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--three quarters of the world's population lives in the poor south and they are saddled with just one fifth of the world's income. The Minister gave us the now-familiar figures of projections for population growth. Since 1950 the population has doubled and it is forecast to double again by the middle of next century. The Minister will also be aware, however, of more authoritative and gloomy reports, and I am glad that the hon. Member for Devizes (Sir C. Morrison) devoted his speech to that important topic. He quoted from the report of United Nations Fund for Population Activities, which said : "The next 10 years will decide the shape of the 21st century. They may decide the future of the earth as a habitation for humans." If we took those words seriously the Chamber would be full today as we tried to tackle the problem. Unfortunately, the global population explosion and its link to threats to the world environment is far more serious than our people and the general political debate appreciate.

We have already heard that the developing countries have enough problems providing for their current populations, let alone trying to tackle the problems caused by substantially increased ones. The environmental consequences of a failure to tackle the population explosion will result in problems relating to food, fuel, water and land supplies as poorer countries make a desperate attempt to provide for their unacceptably increasing populations.

This country has a responsibility to lead on population and environmental issues. Last year Britain hosted the conference that agreed to phase out all CFC emissions from the European Community by the end of this century. I was disappointed, however, that we did not back the German and Danish Governments who were pressing for earlier targets. We are a little complacent about the scale of the destruction of the ozone layer which we shall allow to continue through the next decade. The fact is that 80 per cent. of greenhouse gases originate in the developed countries and, therefore, the responsibility lies with us to make a greater effort to reduce those emissions.

Just as the new political muscle of the UN should be used to control arms sales, so we should beef up the United Nations Environment Programme to make it the appropriate body to administer an international global climate fund to monitor and enforce CO reductions. It should co-ordinate the necessary international action to achieve that. For that to happen, however, UNEP must be given greater political and financial backing.

I do not want to make a long speech, but I must take issue with the hon. Member for Hertford and Stortford who said that we should be proud of our aid budget. When I visit schools I discover that the one thing that is fixed in people's minds is that, many years ago, the UN agreed that we should aim to devote 0.7 per cent. of our gross national product to overseas aid. People may not know much about overseas development, but that target figure is firmly in their minds. During the lifetime of the Government, we have never reached that target. The Select Committee on Foreign Affairs has called on the Government to set a timetable for achieving that target, but it has not materialised ; nor have we had an acceptance of that target in principle.

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Mrs. Chalker : The Government have always accepted the target in principle. We cannot stipulate a timetable, but we shall work towards it as fast as we reasonably can, taking into account what all the other donors are doing.

Sir David Steel : I withdraw my claim that the Government have not accepted that target in principle, but such acceptance is no good if one looks at the facts. In 1979, when the Government came to office, we were spending 0.5 per cent. of GNP on overseas aid. We were still short of the target, but from then on our contribution went down and down. The lowest contribution to overseas aid came in 1987--after eight years of Conservative Government--when we contributed 0.28 per cent. of GNP to overseas aid. Our contribution has increased a bit since, but it is no good for the Government to say, "Oh, haven't we done a wonderful job of turning the economy round? We are such an effective Government." That means nothing when one considers the pathetic slide in our contributions to overseas aid.

I also understand that we are well below the average European Community contributions. The Minister referred to other donors ; she should be aware that EC member states have set varying targets for achieving the 0.7 per cent. contribution. This year, the average contribution from the EC is 0.52 per cent. of GNP--well above our contribution.

I certainly would not say that we should be proud of our overseas aid budget. I hope that the Minister will not take offence, but I am trying to give her greater power in the counsels of the Government. For that reason, and not because of her sex, I wish that she had been admitted to the Cabinet in the recent reshuffle as she might have had even more leverage in getting a more generous contribution from the Treasury.

Mr. Wells : I appreciate the constructive way in which the right hon. Gentleman has approached the argument, but he would agree that it is fair to point out that the statistic based on GNP per head will vary if the GNP goes up quickly. As a result of that a country could be spending more money but spending less on trade and provision. In the interests of fairness it is also worth remembering that the British aid budget is the sixth largest in the world.

Sir David Steel : Yes, but the whole point of the original UN target was to link it to GNP so that as a nation's prosperity increased so did its contribution to the less fortunate. As we are, in relative terms, comfortably off and, as our standard of living has increased in the past decade, it is a shame that we have also watched our contribution to overseas aid decline.

Mr. John Battle (Leeds, West) : The point of the GNP figure was to establish a base line. For example, Japan now gives more aid than any other country, although in GNP terms it is lower. Our problem is that we are giving less as a percentage of GNP than other countries which claim that their economies are worse off than ours, and we have had a booming economy for 10 years.

Sir David Steel : The hon. Gentleman is agreeing with my point. I want, at the same time, to compliment the Government, and I can do that by agreeing with what the hon. Member for Hertford and Stortford said about debt. The Government's record on official debt has been good.

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The decision to write off £16 billion for 22 or 23 countries has been generous and imaginative, and they are to be congratulated on it.

I now ask the Minister to go further by bringing pressure to bear on the private sector banks. The hon. Member for Hertford and Stortford spoke about institutional lending, and I agreed with him. But there is also a great deal of bank debt owed to this and other countries. The banks lent on an irresponsible scale at a time when interest rates were lower than they are now. Many countries which borrowed are in great difficulty now because of the increase in world interest rates and the lack of success of their economies. Whereas a few years ago when one made this type of suggestion the banks wrung their hands and said, "We must be careful not to set off a banking crisis," they have since set aside, and organised their structural internal funds to cope with, bad debts. Instead of allowing those funds to lie fallow, waiting for bad debts to happen, the Government should, in a dialogue with the banks, urge them to follow the Government's example and write off some of the longstanding debts of the poorest countries.

We have seen a few welcome changes of attitude from the Government since the change of Prime Minister. We note the decision, for example, on compensation to haemophiliacs. There is another change of attitude which I hope the new Prime Minister will introduce, and that is to reverse the disastrous and hasty decision that was made when the Conservatives took office in 1979 to charge increased fees for overseas students. Not only was that policy short-sighted from the point of view of the needs of the developing world, but it was lamentably short-sighted from the point of view of Britain's national interest and influence in the world.

It would not be costly to reverse that decision. I urge the Minister to get back at the Treasury and, in particular, to bite hard on the ear of the new Prime Minister and say, "Here is another gesture which would make a big difference to Britain's standing in the world at relatively little cost." I urge her to take that action.

12.2 pm

Mr. George Gardiner (Reigate) : I join in the congratulations that have been extended to my right hon. Friend the Minister on her comprehensive speech in introducing the debate and for the diligence that she brings to her office.

The hon. Member for Cynon Valley (Mrs. Clwyd) made some disparaging comments about a speech by the Foreign Secretary last June to the Overseas Development Institute in London. I wish at the outset to acknowledge the significant contribution that that speech made to thinking on this subject. To many of us, it came like a fresh breeze across many of the stale old arguments on overseas development aid that we have heard over the years. Indeed, I was glad to detect gusts of that fresh breeze in the Minister's speech today.

The speech of the Foreign Secretary was given under the title, "Prospects for Africa in the 1990s", and it is on the experience of sub-Saharan Africa that I shall dwell today. The countries of that region, many of them Commonwealth countries, have been recipients of heavy British development aid, yet any observation must lead to the conclusion that all that aid has done almost nothing to

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elevate the economic condition of the ordinary people in those countries. Indeed, often the reverse has been the case.

In the last 20 years, the real per capita income in many sub-Saharan African states has actually dropped. For example, 10 per cent. of Tanzania's entire GNP is made up of overseas aid, yet its economic condition continues to deteriorate.

What has gone wrong? Why has all our development aid over the years not had its intended effect? Could it be that we are supplying it in the wrong way? In his speech to the Overseas Development Institute, the Foreign Secretary drew some comparisons between the experience over the last 30 years of countries in sub-Saharan Africa and many in south-east Asia around the Pacific rim. Many of the countries in both regions, he said, were once ruled by colonial powers. Both had had the advantages and disadvantages of that experience. Many in south-east Asia have fewer natural resources than countries in Africa, yet over those decades the standard of living of those Pacific rim countries has leapt ahead, while in sub-Saharan Africa it has stagnated.

The Foreign Secretary was careful about drawing easy comparisons, yet he put his finger on the essential difference. By and large, those Pacific rim countries have had good government and, just as important, an open economic system developing free market economies. On the other hand, too many in Africa have suffered from bad government, often in dictatorial one-party states, with highly interventionist and collectivist economies.

The hon. Member for Cynon Valley was selective in quoting from the Foreign Secretary's speech. My right hon. Friend also said : "Economic success depends to a very large extent on effective and honest government, political pluralism and, I would add, observance of the rule of law, freer and more open economies. These are choices for Africans, not for us to make. But aid donors can help where the will is there by providing assistance and training to strengthen legal, financial and other institutions which help form the fabric of a healthy society."

Today, the Minister gave examples of that.

The Foreign Secretary continued :

"And they should consider potential recipients of aid in the light of certain criteria. Countries which tend towards pluralism, public accountability, respect for the rule of law, human rights, market principles, should be encouraged. Governments which persist with repressive policies, corrupt management, wasteful discredited economic systems should not expect us to support their folly with scarce aid resources which could be used better elsewhere." He went on to point out that those were precisely the tests that we were now applying in eastern Europe. I believe that that approach should be made a watershed in British development aid policy. That gives rise to some interesting lines of thought, many of which were developed in a stimulating report issued last month by the United Kingdom branch of the International Freedom Foundation under the title : "Recommendations for the Future Conduct of British Government Aid and Development Policy." I will not ask the Minister today to comment on the report's proposal that the Overseas Development Administration should be disbanded and replaced by a new overseas enterprise agency within the Department of Trade and Industry. I have a sneaking feeling that she would not agree with that suggestion. That is an idea worth pursuing, although perhaps not in the context of the debate.

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I have a couple of thoughts that I shall develop in the light of my right hon. Friend the Foreign Secretary's analysis. The first is perfectly summarised in the report of the International freedom Foundation :

"Traditional aid policy has served to reinforce the dirigiste, highly interventionist, economic policies of many Third World states and has not contributed to the political liberalisation of these societies. By failing to tie the continuation of aid to massive economic and political restructuring, western governments have, in effect, rewarded the pursuit of authoritarian administration in the underdeveloped world. The undemocratic regimes of countries such as Zambia, Tanzania, Uganda, the Seychelles and elsewhere have been given no incentive to change their ways."

That is certainly borne out by my own observations in Zambia, which has not only a one-party constitution, with all the stagnation and wasted talent that goes with it, but an economic system dominated by parastatal organisations, with all their managerial posts entirely within the patronage of the central party organisation. It is small wonder that Zambia has a basket-case economy, with many elements distressingly similar to those experienced within the Soviet Union today.

However much development aid one tips in at the top, it will all be frittered away long before it serves to raise the living standards of ordinary people at the bottom. For years, the excuse has been made of the apartheid regime next door and the armed struggle waged by the African National Congress. But that will not wash any more. The fault for Zambia's economic stagnation lies fair and square within its own political and economic structure.

But at last the light is dawning. Zambians have been promised multi-party elections next year. We welcome that, although we wait to see how fair and free they will be. I submit that all sub-Saharan African countries must be told that, unless pluralistic political systems are instituted and the market system encouraged, they can expect development aid to tail off. What goes for eastern Europe must go for southern Africa too.

The second thought prompted by the speech of my right hon. Friend the Foreign Secretary is that we should look again at the practice of pouring so much development aid in at the top of the still collectivist economies. Instead, we should direct more to the bottom and help individuals and families in the third-world countries to pull themselves up by their bootstraps. That would mean not going for ambitious infrastructure schemes, although they are often important, but giving individuals the basics to improve their own economic conditions and serve as points of growth in their economies at the grass roots. That policy is the very reverse of collectivism, but experience suggests that it would have a far more potent effect. The ODA has experience of such a system in several parts of the world, as we heard earlier in the debate. I have seen it at work in South Africa--in the squatter camps around Cape Town, where groups of women have been given sewing machines to develop their own dressmaking businesses. Machines to make wire fencing or building bricks have been given to small co-operatives, which in turn have spawned other small industries around them. Tools have been given to make furniture and sheds to serve as factories. It is from such acorns that third-world economies can grow, but to do so they must have a free, non-collectivist economic environment.

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I welcome the remarks of my right hon. Friend the Minister today about the need to involve local people. Often good development policies require direct contact with such people. We should not always rely on what are often inefficient Government agencies in some of the third-world countries.

Many more thoughts flow from the speech of my right hon. Friend the Foreign Secretary last June. We can only hope that the logic of his diagnosis will be followed through in the Government's future aid policies.

12.15 pm

Mr. John Battle (Leeds, West) : We should check what could be described as the looseness with which we use language when discussing policies. When I reflect on the title of the debate, which refers to "progress in assisting economic reform in the developing world", I challenge the word "progress". Evidence suggests that there has not been much. I also challenge, somewhat controversially, the phrase "developing world". Signs seem to suggest that some countries are developing rapidly, while others are going downhill.

Another phrase that should not be lightly slid over, is "economic reform", which can mean many different things in different contexts. Even within this Government's lifetime the instruments of economic reform change and take on different characters and contents. This year the World bank produced the "World Development Report 1990", its 13th annual report on world development indicators. What was striking about it was the word "poverty" haunting the cover. It was exactly the same word as haunted the cover of the 1980 report. The 1990 report states :

"The world economy enjoyed moderate growth in the closing year of the decade. But the auspicious picture was not uniform. The industrial countries saw favourable developments in growth, trade and investment. Real per capita incomes grew (and poverty declined) in South Asia and, even more markedly, in East Asia. But in some countries of Latin America and in most of sub-Saharan Africa, real per capita incomes, living standards, and investment have slipped. For the poor in these countries, the 1980s was a lost decade." The report goes on to spell out that the number of poor people will increase in the years to come, given the present signs of world development.

A similar report was published by the International Labour Office in 1987. It said :

"The world labour situation has deteriorated further since the first two volumes of the World Labour Report were published in 1984 and 1985. Real incomes from work, the principal source of income for most households, have fallen in many countries. The great majority of workers in sub-Saharan Africa and Latin America, both wage workers and the self-employed, have suffered a drop in real income of as much as 30 to 40 per cent. or more since the beginning of the 1980s." It seems that all the analyses show that people have been getting poorer in the past decade. In recent months we have heard estimates of between 5 million and 10 million people facing starvation in the Sudan and Ethiopia. Only yesterday, we heard that as a result of crop failure in Eritrea and parts of Tigray, 6 million people could face widespread disaster.

The United Nations Food and Agriculture Organisation report states :

"With reserve stocks virtually depleted after last year's poor harvest in Eritrea and Tigray, widespread loss of life is inevitable unless further emergency relief and logistic support for its distribution are mobilised."

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It is absolutely plain that the international position has been getting demonstrably worse in terms not only of emergency relief and aid, but of the relationship between trade and development. The spiral of world economy is working against, not in favour of, the poor countries.

What is Britain's response? Sadly, I suspect that our reponse to the latest statements of the projected famine in Africa will be that people will wait for the pictures of famine camps to appear on television again. Perhaps we become anaesthetised by television pictures. It is as though we leave to information technology and the mysteries of satellites the ability to make the only connections. We can see what is happening in our front rooms but we are reduced to passive spectators--almost voyeurs of what is happening on the world scene. Our emotions are challenged, but we do not believe that we need to work through our interdependence or to think about the causes of world hunger and poverty. It is as though we are being reduced to passive subjects and if we are subjected to too much we switch it off and hope that the poor will go away.

The result is a lack of analysis of the complex nexus of relations that the modern economy weaves around the world. There is a lack of awareness that small actions and decisions that we make, when compounded, have consequences for millions of other people throughout the world, who suffer or celebrate as a result of what we do. I have been reminded of a letter written and signed by young people in Latin America :

"The crops in Argentina, the American embargo of wheat to the USSR, the European Common Market, the crop surplus in France, and hunger in India are all part of the same web. A transistor radio made in Korea, which I buy here at a low price, involves the low salary of the workers, the repressive regime in Korea, Japanese economic policies, American capital unemployment in my own country, and problems which will involve my children and grandchildren."

That is why I suggest that aid and trade and activities in other areas of economic policy and commerce must be related to each other when assessing the Government's aid programme.

We are also experiencing a new environmental awareness in an interdependent world. The Minister said that environmental problems know no boundaries, but rather than facing up to the shared responsibilities that we should adopt to the environment, there are some who assume that they should take over those responsibilities. There are even people abroad who claim that the Amazon rain forest belongs to them, and there are others who put the unequal restraints on pollution across boundaries to their own commercial advantage. I offer an example of this from my constituency. In Armley in Leeds people are dying of a deadly disease known as mesothelioma because they worked in a factory that produced asbestos. When they went home dust was blown out of the factory at night and lay like snow on the streets and on school playgrounds. So people in the neighbourhood contracted the disease. The factory closed in 1956, but years later people are still dying.

After the factory closed in Leeds it was transferred, lock, stock and barrel, to India, where it opened again without the same restrictions and continued to pollute beyond the reach of the controls implemented here. The irony is that some of the families that I represent in Leeds have relatives in India who will go through the same suffering and death as their relations in Armley. This is a classic example of exporting pollution and of economic

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injustice on an international scale, using boundaries to commercial advantage instead of tackling environmental problems as shared responsibilities.

Just as our neighbours are nearer to us than we sometimes like to think, so the causes of international injustice are nearer than we are preapred to face up to. I remember the Band Aid concert in 1985. Late that night a promoter was asked what he thought of the money that had been coming in. People had been ringing in with donations all night, and he said that there had been an excellent response but that we needed to shift away from private charity and start demanding public justice. We need to move from private compassion to questioning international economic, commercial and political structures. We need to replace emergency relief work with genuine development work.

Many of the young people who took part in Band Aid are now surprised to hear that famine is again threatening in Ethiopia and the Sudan. They really believed that they had solved the problem. The title of this debate suggests progress, but the evidence shows that little progress can be reported back to these young people. During the whole of the past decade official Government policy has been to reduce the aid budget. Official development assistance is down 24 per cent. since 1979, when it was £2,091,000, Today the figure is £1,579,000. Aid programmes for developing countries were cut by 15 per cent. between 1979 and 1989. Gross public expenditure on overseas aid has fallen by 7 per cent. in the same period. At the same time as challenging this reduction, we must insist that the Government acknowledge the crucial role of trade. I remember a cartoon produced in Mexico which showed a huge man handling a Mexican peasant. He held out a teaspoon in one hand. In the teaspoon was a little pile labelled "Aid". But the other hand was holding the peasant by the throat and on the huge man's arm was enblazened the word "Trade". So, as the teaspoon of aid is offered the trade structures are strangling its recipient.

An example from our corner of the world is the fact that the trade share of developing countries with the EEC has dropped. Their exports to the Community have fallen by 10 per cent. since 1984. That is why the GATT talks are so crucial. If there is only one economic model, as suggested by the hon. Member for Reigate (Mr. Gardiner), it seems to have come up against ultimate breakdown--the deadlock that is holding up the talks. As the world moves towards new bloc politics, with President Bush suggesting in south America recently that north and south America could form a trading block as a bulwark against the EEC linking up with eastern Europe, we could end up with a world divided between the Americas, Europe and the Pacific rim countries. Then there would be a danger of the three major blocs squeezing out two thirds of the developing world. We must work to facilitate the genuine incorporation of developing countries in the multilateral trade system. Systems such as general system of preferences must be made more effective for developing countries.

We also need a wider internationalist vision in politics and economic decision-making in Britain. It is necessary in our trade, aid, cultural exchanges and diplomatic relations.

For years the non-governmental organisations have led the way and have had insufficient Government backing. The Minister spoke about Government aid supporting

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those who are committed to better government. I hope she does not mean that we should impose a single political and economic outlook on other countries. We should not say, as has been said, that there is no alternative to the market economy. Some people in America suggest that recent developments have changed history. I hope that in their arrogance the Government will not suggest to the rest of the world that economic history as we know it has come to an end and that there is only one model for the economy.

Mrs. Chalker : It is important to correct the hon. Gentleman on two matters. I have never said, and the Government will never say, that only one model of government or economic reform should be imposed on any developing country. Economic reform should be sustainable. It should attract investment and encourage countries to spend within their limits. In my winding-up speech I shall deal with the matters raised by the right hon. Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel). The hon. Member for Leeds, West (Mr. Battle) spoke about non-governmental organisations. I am frequently accused of speaking too much about those organisations, so I shall be brief. In 1989-90 we spent more than £65 million with the voluntary sector on the work that it carried out. I am totally devoted to the joint funding scheme and my hon. Friend the Member for Reigate (Mr. Gardiner) spoke about the good work of the NGOs. We have more than quadrupled their funding over the past five years and I shall again increase the contribution this year.

Mr. Battle : I have never had such a long intervention from a Minister and I take it as a compliment. I accept that the Government support NGOs. I hope that the policy implications of the work of some NGOs and their comments will be borne in mind by the Government. Although the Minister did not refer to the single model economy, the hon. Member for Reigate certainly spoke about it. The Minister spoke about spending within limits. I hope that the Government will not define those limits for other countries or set parameters. It is not only our Government who support the single economic model ; the policy is beginning to infect other countries.

The European Community recently published guidelines for co-operation with developing countries in Latin America and Asia. It was published on 19 June in Brussels and contains this interesting passage :

"Economic co-operation consists, essentially, of activities aimed at establishing a common language' with our partners in the fields of technology and economics."

We should not start from a common language but should seek a common understanding based on mutual respect. We should not seek to promote a single discourse based on the free market model but should move in the direction of respecting different cultural and economic traditions and languages. Such respect leaves space for the development of economic and political imagination elsewhere. There is no such thing as the best single economy. The debate is the starting point for the issues that I have raised. To ensure that the policies adopted by the Minister's Department are for the benefit of the world's poor, the debate needs to continue in the formulation of Government policy.

The real challenge of the 1980s is to work towards a new world order with the practical objective of eliminating poverty at its core. The best way to tackle poverty is to promote the long-term development of the poor because

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that will reduce their vulnerability to emergencies and natural disasters. Some good project work is being carried out and there has been some late-in-the-day response to the need for emergency relief. However, that is a piecemeal approach. Tackling poverty should be at the heart of a positive and integrated policy that addresses the links between trade and industry, the environment and poverty. Such a policy should be backed by real budget commitments.

The integrated policy response that I have outlined is sadly lacking. British overseas trade and commerce from arms sales to tied-aid contracts are undermining an effective aid programme. The Minister may think that the export drives by the Ministry of Defence have nothing to do with the aid programme. I hope she will at least admit that they can undermine it by absorbing resources that are needed elsewhere.

While the Government use their newly discovered language of compassion, they lack the international vision to realise that the world needs to look forward to the 21st century. Late-in-the-day, piecemeal projects cannot be a substitute for positive international strategies that address the workings of what we must all acknowledge is a global economy. Tackling structural injustice on that scale must be done on the basis of co- operation and mutual respect. That will be the task for the new Labour Government of the 1990s.

12.34 pm

Mr. David Atkinson (Bournemouth, East) : Before I concentrate on my main theme, the Palestinian refugees, I shall say something about the crisis of food shortages in the Soviet Union, especially in the major cities. As the House will know, this is one of the many issues for debate at the Rome summit that is taking place this week. It is strange that the Soviet Union should be facing such a food crisis, as this year it has enjoyed a record harvest. As we know, one of the principal problems is that there is a failure in the organisation, transportation and distribution of that food from the points of production to the shops in the cities. I believe that some 20 to 30 per cent. of all the food that is harvested in the Soviet Union fails to get to the shops ; it remains rotting in the fields and by the roadside. A lot more is hijacked by the Red Army, the KGB and the various Mafia-style organisations that are becoming more prolific in the cities.

The worry is that the same may happen to the food aid to be donated by the international community and the voluntary organisations. Earlier this week, a small delegation representing three religious-based voluntary organisations--the Women's Campaign for Soviet Jewry, the Jubilee Campaign and the Movement for Christian Democracy--led by the hon. Member for Liverpool, Mossley Hill (Mr. Alton) met Mr. Zamyatin, the Soviet Ambassador in London, to discuss how food aid and other humanitarian donations being raised by such organisations will be able to reach those for whom it is being donated.

According to Alexander Ornorodnikov, chairman of the Christian Democratic Union, which is organising the distribution of this voluntary aid in Moscow, among the people for whom it is organised and to whom it will be distributed are those who are so elderly and frail that they simply cannot stand in the inevitable queues in the food

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shops. Such elderly people have been found dead in their flats because they dare not risk their health standing in those queues. There are also an estimated 600,000 refugees in the Russian Republic, about 65,000 of whom are in Moscow. Over 200 of them are living in tents outside a hotel near Red square. Many have fled from the Islamic republics. Alexander Ognorodnikov has a list of 800 families in urgent need and on a priority list for help.

There are 1,000 orphans in two orphanages in Moscow to whom this food will be personally distributed. There are 1,000 known disabled people on the list of those who are potentially unable to help themselves and who are consequently victims of the food crisis, but who will be helped in this way. There are categorised poor families, the elderly, the sick, the widows, one-parent families and the housebound, who will be helped through the Christian Democratic Union in the Soviet Union.

According to the hon. Member for Mossley Hill, the ambassador's response was positive. He has promised that an Aeroflot flight will be made available every week to transfer to the Soviet Union whatever food and humanitarian aid is raised in this country. However, we must remain concerned about ensuring that that aid will reach the people for whom it is being donated. That also applies to whatever international aid is agreed at the Rome summit. I look forward to my right hon. Friend's response to those points.

I hope that, at Rome, we will insist that the Soviet Union continues to implement its commitment to economic and political reforms, such as private ownership, the market economy, and a pluralistic society. That will do much to ensure that food shortages, like the communism that has caused them, will be confined to the dustbins of history.

As the House knows, one of the most depressed areas in the world for economy, jobs, and quality of life is Palestine. Since the armistice of 1949, Palestine has received billions of dollars of aid through the United Nations and through direct donations to sustain the refugees who were displaced by the Israeli war of independence, many of whom have experienced subsequent displacement because of further conflicts. I referred to their position in some detail during a summer Adjournment debate on 29 July 1988, following a visit to the area to prepare a report for the Council of Europe. Last month, I followed in my own footsteps to prepare a new report, which I want to share with the House today.

I hope that the House will agree that, after 42 years, it is an international scandal that 2.4 million registered refugees continue to be stateless and displaced. We all know why--it is the continued failure of Israel and its Arab neighbours to make a peace settlement possible. I shall refer to that again during my concluding remarks. It is frequently suggested that it suits both sides to have so many Palestinians in the temporary conditions of camps in Lebanon, Syria, Jordan, and the west bank of Gaza. Of course, the original communities of tents and shacks for those who fled in 1948 have since been replaced by more permanent structures. All 61 camps enjoy infrastructures to varying degrees, such as the provision of education, health services, a sense of community, and special help for hardship families. However, that is due only to the commendable work of the United Nations Relief and Works Agency--UNRWA--in the near east and other international agencies.

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This year, the United Kingdom donated £5.64 million to UNRWA for direct aid, and £56 million has been donated since 1979. That is money well spent. Despite the frequent frustrations and the crises in the provision of adequate resources to match the basic needs of refugees, UNRWA is probably achieving the most cost- effective service possible under the circumstances. It compares extremely well with all the other humanitarian services provided by the United Nations. It is my view that no donor nation could have cause to complain that its money was being misspent.

Of particular importance, but consistently overlooked, is the valuable contribution that UNRWA makes to the political stability of the region, where such stability is conspicuously fragile. Without UNRWA there would undoubtedly be more confrontation, casualties, and hardship in Lebanon, Jordan and the occupied territories. Equally overlooked is Israel's attempt through its defence force, which has acted as the civil administration since 1967, to resettle permanently the refugees in the Gaza strip in neighbourhood communities having a proper infrastructure and municipal services. Although more than 80,000 refugees--some 12,000 families--have been rehoused in that way, most refuse, having been encouraged by the United Nations to believe that it would prejudice their rights pending the outcome of a permanent solution to their situation. It would be surprising if Israel did not now decide that it had other housing priorities to fund.

When I visited the west bank and Gaza in March 1988, the intifada was three months old. It is now three years old, and there is no sign of it coming to an end, despite 858 Palestinians killed, 30,000 injured, 10,000 imprisoned, and 58 deported. Not one of the Palestinians to whom I spoke held out any expectation that that form of demonstration and unarmed resistance against continued Israeli occupation would cease, unless there was real hope of progress to self-determination.

Three years of violence, curfews, strikes and destructive retaliation by the Israeli defence forces have reduced once attractive biblical towns to war-torn communities where squalor and graffiti are rife. Schools are closed so regularly that it is impossible to provide proper education. Municipal services are breaking down, as is the infrastructure--including roads and drainage--and there is disruption of the provision of medical services.

The physical and psychological effect of that on the people has been devastating. They no longer live, but exist. There can be no quality of life under such conditions, and a whole generation of young people have lost their childhood because they are influenced no longer by their elders or the notables of their Arab communities, but by more shadowy factions both within and without--and they are then eager to act as fodder for the visible resistance.

Since making recommendations in 1988, there have been some notable increases in the contributions to UNRWA's budget--in particular, from the Netherlands, Norway, Sweden and Italy. The United Kingdom's contribution has increased by some 15 per cent. over the past two years. The recent encouraging trend towards peace in Lebanon has resulted in the return of UNRWA's field office in Beirut, and it may yet pave the way for the return of the organisation's head office from Vienna. Thanks to the Llewelyn- Davies feasibility study into UNRWA's organisation--funded by my right hon. Friend's Department, for which we are most grateful to

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