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Mr. Dafis: I am sure that the Minister recognises, as we all do, that higher education--both teaching and research--has a key role to play in revitalising the Welsh economy. He will also be aware that there is deep concern and some bitterness in higher education circles in Wales about the way in which its funding has been cut, which has put it at a serious disadvantage compared with higher education in England. Some of those cuts have been made because of the need to provide significant sums, especially for the LG project. Is that not an example of the imbalance in industrial development strategy?

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Mr. Deputy Speaker: Order. Interventions in this debate are very long.

Mr. Hain: The hon. Member for Ceredigion (Mr. Dafis) makes important points, which will be taken into account.

Both the WDA and the DBRW fully recognise the importance of this push to the west and north-west, and both agencies are represented on the North Wales economic forum, which has an important role in co-ordinating these efforts in the region. I look forward to the launch of the new South-West Wales economic forum, which will play a similar role. I think that that will deal with many of the points raised by my hon. Friends the Members for Preseli Pembrokeshire, for Swansea, East and for Gower (Mr. Caton). The Secretary of State and I will shortly be meeting the North Wales economic forum, with which we want to work closely in regenerating north Wales.

All partners should work closely together to ensure that each region and area of Wales is able to maximise its potential for attracting investment. I will be working to ensure that Wales gets the best deal from any review of the assisted areas map. It is essential that we proceed on that.

However, the most important component of all is the right people with the right skills, as LG's senior managers stressed to me on Monday. The people of Wales are our biggest asset. They are the reason why Wales has been so successful, and that drives the WDA's efforts to bring jobs and projects to Wales. We are keen to upgrade the skills level in the Welsh work force still further. But we need not only a highly skilled work force: it also has to be the most flexible.

There are formidable challenges ahead if Wales is to preserve its position as one of the leading locations for investment in Europe. Our partners in the European Union are now more alive to the benefits of inward investment than they were five or certainly 10 years ago. The economic reforms in eastern Europe make those countries formidable competitors for global investment. Recently in my own constituency, Lucas shifted 500 assembly line jobs from Neath to Poland where wage costs were 60 per cent. cheaper. The only way Wales can rise to this challenge is by being the best--not necessarily the cheapest, but the best. To be the best, we must have the most skilled and flexible work force and be at the leading edge of technological advance.

Our strategy must include rationalising or abolishing quangos and making them more democratically accountable to a new Welsh Assembly. That will strengthen existing partnerships, especially with local government. We want more power and decision making to be devolved to the regions of Wales. That will help to spread inward investment more evenly across the whole of Wales.

We want closer ties between the companies that choose to invest in Wales and the communities that will serve them, so as to boost the prospects of the rural and more remote parts of Wales, which are a priority for the Government.

If inward investment is crucial, so, too, is in-Wales investment. The development of home-grown firms is more important than ever before. Most of the jobs growth in modern economies is in small and medium-sized

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businesses. I shall meet the North Wales Federation of Small Businesses tomorrow to discuss how the Government can support its activity.

I have also asked the WDA and Welsh Office officials, and the other institutional agencies, to discuss how we can advance the proposals for a new economic powerhouse that will be contained in our White Paper on devolution next month. Businesses and their workers in Wales need a Welsh Assembly to give them a real voice in winning new jobs and investment opportunities; otherwise, Wales will fall behind.

This has been an important debate. The consensus demonstrated in it should now be built on, and a new Welsh Assembly should be formed to secure the extra investment, economic activity and jobs to ensure that Wales becomes a world-beating economy.

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10.59 am

Mr. Keith Hill (Streatham): I congratulate the Minister of State, Foreign and Commonwealth Office, my hon. Friend the Member for Manchester, Central (Mr. Lloyd)--who will reply to the debate--on his appointment. He and I have fought shoulder to shoulder on human rights issues in the past, not least in regard to Nigeria. I know that his response will be informed both by personal concern to resolve the human rights tragedy that is Bosnia and by the Government's wider concern to secure peace and stability in that part of Europe. Indeed, the one cannot be achieved without the other.

I do not intend to make a long speech. As I anticipated, the debate has attracted some interest among other hon. Members, and I look forward to hearing the contributions of those who, unlike me, have direct and personal experience of Bosnia.

I am pleased to have secured a debate on Bosnia now. It is nearly a year since the House last had a substantive debate on the subject, and we are evidently at a crucial moment in international decision making on the future of the country. In 12 months' time, the mandate of SFOR, the stabilisation force, runs out, and discussions are under way between Governments on its future. I shall argue strongly in favour of the maintenance of a large and powerful international military force in Bosnia. I know of no observer of the Bosnian scene who believes that withdrawal would be anything other than an unmitigated disaster for the region. I shall also argue, however, not only that the international force should stay but that its mandate should be widened as quickly as possible to allow it to undertake more direct responsibility to support the civil agenda of the Dayton agreement.

There are other reasons why this is the right time for a review of the international community's role and SFOR's mandate in Bosnia. In Britain and France--two of the three main military contributors to SFOR--we now have new centre-left Governments, who might reasonably be expected to take a more positive stance on human rights in Bosnia. At the end of this week, the new United Nations high representative, Carlos Westendorp, assumes his responsibilities. On 24 June, the international donor conference will meet, with the aim of raising £1 billion in economic aid for Bosnia. It is essential for that conference to commit itself absolutely to the principle of conditionality in the aid package. In other words, aid should be disbursed only as a condition of the implementation of the civil agenda of Dayton by the Bosnian entities.

We are also in the run-up to the municipal elections in Bosnia, which are set for 13 and 14 September. The 1996 legislative elections, also conducted under the supervision of the Organisation for Security and Co-operation in Europe, were deeply flawed, particularly in relation to the right of displaced persons to vote in their place of origin. The OSCE is now asking for, and receiving, additional funds to oversee the elections. It claims that it is only approving candidates who make a declaration of acceptance of the Dayton peace agreement, but that claim needs to be validated. There must be renewed efforts to give voting rights to displaced persons, and the OSCE's work must be subject to intense international scrutiny. It is vital for the municipal elections to meet acceptable

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international standards, in a way in which the Croatian elections--also monitored by the OSCE this week--evidently did not.

The final and most important reason why this is the right time to review the direction of international policy and the role of SFOR is the evidence of a renewed American commitment in Bosnia. Just over two weeks ago, when she visited Bosnia, the United States Secretary of State, Madeleine Albright, suggested that the United States was in Bosnia for the long haul, and left open the possibility that some American troops could remain there after next summer. I hope that the British Government will welcome and encourage those indications of continuing US involvement, which would be best served by a continuing US presence on the ground in the form of combat troops. If, however, the United States will not lead on the ground after mid-1998, it is essential for the major European powers to plan now for their own force in Bosnia for as long as it takes to fulfil the Dayton objectives.

It is right and proper to recognise the important achievements of both the original international force, IFOR, and its successor, SFOR, in fulfilling the military objectives of Dayton. The ceasefire was effected, and has been sustained. In some areas, there has been a transfer of authority. A zone of separation has been created, and the inter-entity boundary has been effectively patrolled and policed. I pay tribute to the thousands of British troops who have played their full part in those achievements.

A number of other military aspects of the Dayton agreement remain unfulfilled, however. De-mining has yet to begin in earnest. It is acknowledged, in the present circumstances, that further progress in implementing the sub-regional arms control agreement will be difficult, with Republika Srpska continuing to resist its obligation to destroy large numbers of tanks and heavy weaponry. The critical weakness in Bosnia, however, has been the near-total failure on the civil agenda of the Dayton peace agreement: the establishment of national institutions, freedom of the media, freedom of movement and, above all, the return of the refugees and the arrest of the war criminals.

The scale of the continuing refugee disaster in Bosnia was described in a recent report by the international crisis group entitled "Going Nowhere Fast". In the 16 months since the Dayton peace agreement came into force, only about 250,000 refugees and displaced persons have returned to their homes, almost exclusively to areas where they form part of the majority group. In the same period, a further 80,000 people have been displaced, largely during the transfer of territory between the two entities. In Bosnia and Herzegovina as a whole, some 750,000 people remain displaced, of whom roughly 450,000 are in the federation and 300,000 in Republika Srpska.

It is important to understand that, in seeking solutions to the refugee crisis in Bosnia, we are seeking solutions for Muslim and Serb refugees alike. Nor should we forget the 160,000 Croat refugees who have sought refuge in Croatia, and who are part of a Bosnian refugee diaspora which numbers 250,000 refugees in the Federal Republic of Serbia and 315,000 in Germany. To add to the crisis, in late 1996 the western European states, starting with Germany, began proceedings to deport Bosnian refugees.

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As a consequence, the United Nations High Commissioner for Refugees expects up to 200,000 refugees, half of them from Germany, to return to Bosnia and Herzegovina this year. Unless action is taken now to enforce the return home of refugees, the total number of refugees and displaced persons in Bosnia will grow to nearly 1 million by the end of 1997. The situation is getting worse, not better.

That further build-up of refugees will mean more human misery and greater political tension, especially in the federation area. Of course, there are physical obstacles to the return of the refugees, such as the destruction of property and infrastructure. Those must be dealt with by the international aid programme, and it goes without saying that all housing and infrastructure reconstruction programmes must be linked to the return of minorities.

The major impediment to the return of refugees is the continuance in power of the nationalist authorities and, in some places, of indicted or suspected war criminals. It is unrealistic to leave the responsibility for guaranteeing the security of returning minorities to local authorities, many of whom ethnically cleansed them from their respective regions in the first place. That is why, first, the international community needs to ensure that there are far more human rights monitors on the ground to oversee and facilitate the return process.

If what the international crisis group describes as the "vicelike grip" of the nationalist parties is to be broken to help minorities go back to their homes, the issue of war crimes has to be tackled head on, and those indicted by the international tribunal for former Yugoslavia must be arrested, surrendered to the tribunal at The Hague and prosecuted. Of 75 indicted war criminals in all parts of Bosnia, only nine have been arrested and two prosecuted so far. More than 50 remain at large in Republika Srpska. Radovan Karadzic and Ratko Mladic are both charged with genocide and crimes against humanity. While such men remain at large and their apparent immunity from arrest confers continuing legitimacy on the ethnic cleansers, there will be no return of refugees.

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