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Third-world Debt

2. Mr. Mullin: To ask the Secretary of State for International Development what recent discussions she has had regarding the reduction of third-world debt; and if she will make a statement. [311]

Clare Short: I had an encouraging meeting with the president of the World bank last week. The Government strongly support the heavily indebted poor countries initiative and are pressing for its speedy implementation. Our aim is to produce tangible results quickly for the most needy countries and to bring about a once and for all exit from their debt problems.

Mr. Mullin: I welcome my right hon. Friend to one of the best jobs in the Government and I am sure that she will do it well. Has she given consideration to persuading her colleagues at the Treasury unilaterally to remit some of the debt owed to the Export Credits Guarantee Department by some of the most indebted countries, and will she make any relaxation of indebtedness conditional upon respect for human rights?

Clare Short: I am grateful to my hon. Friend. To be fair, the previous Administration worked hard in their later years to achieve success on debt cancellation. Britain's record on cancelling debt owed bilaterally is very good, but we cannot make further progress without getting partnerships across the international community. It is important that we get momentum behind the initiative and start to make progress.

Uganda has been named as the first candidate to exit from debt, and Britain has volunteered to make an extra payment to make up for the fact that the African development bank is not in a position to make its payment. The previous Administration made that clear, and we are standing by that commitment. We hope that other Governments will work similarly. Once we get progress and success, I believe that the initiative can be built upon and that we can begin to give some of the neediest countries in the world the chance to work their way out of poverty.

Mr. Menzies Campbell: I, too, offer my congratulations to the right hon. Lady. She has a warm heart and an independent spirit. I suspect that she will need both qualities, not least in dealing with the Chancellor of the Exchequer. Does she agree that it is disappointing that only Uganda has entered the framework set down for the highly indebted poor countries by the International Monetary Fund and the World bank last year, and that Uganda will be eligible for debt relief only in 1998? What practical steps can be taken to maintain the momentum to which the right hon. Lady referred? Is she satisfied that the criteria laid down in the heavily indebted poor countries initiative are wide enough to allow the most rapid entry of as many countries as possible into its framework?

Clare Short: I am grateful to the hon. and learned Gentleman for his kind remarks. He is right that we should like more rapid progress, but we have to take partner countries with us. Not all countries are as persuaded of the need to make progress as Britain is.

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Uganda has been named, and there is preliminary agreement on the eligibility of three other countries--Bolivia, Burkina Faso and Cote d'Ivoire.

I have discussed the matter with my right hon. Friend the Chancellor of the Exchequer, who is anxious to show what a warm heart he has on this matter, and we shall do everything in our power to ensure that rapid progress is made. Any support, suggestions or help from any part of the House on ways in which we can achieve that outcome will be welcome.

Dr. Fox: I, too, unreservedly welcome the right hon. Lady to her post. We should pay tribute to the Leader of the Opposition and the shadow Chancellor of the Exchequer for their work on debt reduction. I was pleased to hear the right hon. Lady's fine words on the heavily indebted poor countries initiative and to know that the Chancellor of the Exchequer has a warm heart on the matter. However, a warm heart will not reduce debt. How much do the Government intend to make available for the initiative? They said that they would make money available when they were in opposition.

Clare Short: I am grateful to the hon. Gentleman for his kind remarks. I have already paid unreserved tribute to the former Chancellor of the Exchequer. As the hon. Gentleman knows, Uganda is first and Britain is committed to making additional payments because the African development bank is not in a position to pay its share. We cannot say exactly what the amount will be until the calculations are made, but Britain is in advance of other countries. We are determined to make progress on Uganda and very keen for our partners to make the same sort of commitments. We shall do all in our power to make fast progress.

It is in the interests of justice, and of the whole world, that we should deal with the desperate poverty entrenched by debt. In sub-Saharan Africa, 40 per cent. of people live in poverty. We shall make no progress until we deal with debt.


3. Mr. Cox: To ask the Secretary of State for International Development if she will make a statement on aid projects that the United Kingdom is currently funding in Kenya. [312]

Clare Short: Within the context of the overall policy review that I am conducting, I intend to concentrate our aid programme on improving the access of the poor to essential health services and basic education, and on finding ways to increase the incomes of smallholder farmers and the urban poor.

Mr. Cox: I warmly congratulate my right hon. Friend on her appointment and I welcome her reply. Will she discuss with the Kenyan authorities two issues which cry out for urgent action? The first is the plight of street children and their horrendous suffering. The second is the substantial increase in the number of people with AIDS. Will my right hon. Friend urgently consider helping on those two issues with advice and, if possible, with financial aid?

Clare Short: Britain is a large donor in Kenya and, potentially, can attempt to use its influence. Developments

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in Kenya are worrying and patchy. There has been a deterioration in the level of primary education and a growth in the level of poverty. As my hon. Friend said, the problem of AIDS is also very serious. We are reviewing all our spending and commitments so as to concentrate on those in greatest need. The two groups in Kenya to whom my hon. Friend referred are obviously in great need.

Mr. Brooke: It is a pleasure to see the Secretary of State in her place. May I ask her whether the aid programme is funding the secondary education in Kenya of any refugees from southern Sudan where secondary education is in turmoil?

Clare Short: I am afraid that I do not know the answer to the right hon. Gentleman's question, but I will find out and write to him.

Aid and Trade Provision

4. Mr. Wareing: To ask the Secretary of State for International Development what plans she has to carry out a review of the aid and trade provision. [313]

Clare Short: As I have said, we are reviewing all our expenditure programmes. I am determined to concentrate our efforts on poverty eradication. This means that we are necessarily reviewing the aid and trade provision.

Mr. Wareing: I congratulate my right hon. Friend on her appointment and I am reassured by her answer. During any review, will she consider the recommendations made by the Select Committee on Foreign Affairs during the last Parliament when it looked into the Pergau scandal? Most of the ATP aid was being focused by the Tory Government on Indonesia and China--two countries which do not have the best human rights records. Among the developing countries, Indonesia is the sixth largest recipient of direct foreign investment. How could the Tory Government have justified concentrating 17 per cent. of ATP aid on that country? I am sure that my right hon. Friend will agree that we should be directing that aid towards the poorest peoples in the world.

Clare Short: During the review we shall, of course, take account of the Foreign Affairs Select Committee report. I share my hon. Friend's concerns and I am reviewing our aid programme to Indonesia. Many people argue that the aid and trade provision does not meet either development or commercial objectives very well. We want absolutely to concentrate all our efforts and all our resources on the eradication of poverty. That means that we must look seriously at the way in which the aid and trade provision has pulled our aid spend in a different direction.

Mr. Wilkinson: In greeting the Secretary of State at the Dispatch Box, I welcome her review of Britain's overseas aid programme, particularly the review of the aid and trade provision that she has announced. Will she focus much more on the aid and trade provision to the mutual benefit of British industry and commerce and the recipient countries, thereby enhancing political and commercial connections between them while at the same time diminishing Britain's contribution to the European

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Union's aid programme, which is not nearly so well targeted as the British one and is often wasteful and misapplied?

Clare Short: As I have said, we are reviewing the aid and trade provision, but perhaps our thinking goes in a slightly different direction from that of the hon. Gentleman. The aid programme is not about the promotion of commercial opportunities. That is an important objective of Government policy, but the aid programme should be part of a bigger strategy for eliminating abject poverty in the world. That is in the long-term interests of everyone and, indeed, of commercial activity. If there is less poverty, there will be more commerce.

On European Union aid, the hon. Gentleman will know that it was his Government who, in Edinburgh, made an agreement which meant that up to 40 per cent. of our aid spend should go through the EU and unfortunately I have inherited that. The hon. Gentleman is right to say that the performance of EU aid is patchy and I shall be doing everything in my power to use our influence in the EU to try to get the concentration on poverty eradication in EU spending in the same way as we want to achieve that from our own aid spending.

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