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INTERNATIONAL DEVELOPMENT

G8 Summit

Mrs. Irene Adams: To ask the Secretary of State for International Development if she will make a statement on the outcome for heavily indebted countries of the recent G8 summit. [73674]

Clare Short: At the Summit in Kananaskis, last July, the G8 leaders reaffirmed their commitment to ensuring the full financing of the enhanced Heavily Indebted Poor Countries (HIPC) Initiative. The G8 agreed to provide their share of up to an additional US$1 billion for the HIPC Trust Fund. This will help meet the current shortfall in the financing of the Initiative, and ensure that those countries whose debt positions have worsened because of the global economic slowdown and falls in commodity prices will get enough debt relief to enable them to exit the HIPC process with sustainable levels of debt.

At the Annual Meetings of the World Bank and the IMF held at the end of last month in Washington, the international community welcomed the continued progress made on the HIPC Initiative, and reconfirmed their commitment to its implementation and full financing. Some donors, including the UK took the opportunity to pledge their firm support for the HIPC Trust Fund. The UK announced a bilateral contribution of US$95 million plus its share of any EDF contribution to the Trust Fund. This is in addition to the US$306 million which we have already committed. Germany are contributing US$100 million and Sweden US$21 million. The US are considering a contribution of US$230 million, many other countries said they would announce their contributions later this month.

World Summit on Sustainable Development

Tony Baldry: To ask the Secretary of State for International Development what financial target has been set for the Solidarity Fund on poverty in poorer countries agreed at the World Summit on Sustainable Development; how the Government intends encouraging voluntary contributions to the fund; and whether these will be from (a) business and (b) civil society. [74527]

Clare Short: The modalities of the world solidarity fund to eradicate poverty and promote social and human development will be determined by the General Assembly of the United Nations based on the Report of the Secretary-General of 2 July 2002. The Report of the Secretary-General recommends that,


No financial target has been set for the world solidarity fund. The Government does not intend to contribute to this fund and does not currently have any

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plans to encourage voluntary contributions. We do not believe that the creation of a new funding mechanism is the most appropriate and efficient way to increase the resources available for development. There are already too many development channels operating in developing countries. This places burdens on developing country administrations coping with the different demands and procedures of different aid delivery mechanisms.

Tony Baldry: To ask the Secretary of State for International Development what assessment she has made of the achievement of the World Summit on Sustainable Development in addressing commodity prices; and how this will relate to the 2015 millennium development goals. [74608]

Clare Short: I refer the hon. Member to the answer I gave on 19 September 2002, Official Report, column 416W.

A major outcome of WSSD is that it reaffirmed many of the commitments made at recent global conferences, including New York, Doha and Monterrey. In particular the text agreed at WSSD endorsed the Doha commitment on issues to be considered in the new trade round. This sends a strong signal for the need to reduce perverse subsidies (such as agricultural subsidies) as well as other obstacles to development such as high tariffs, tariff peaks and tariff escalation.

Tony Baldry: To ask the Secretary of State for International Development what assessment she has made of the achievement of the World Summit on Sustainable Development in further debt cancellation in the developing world; and how this will relate to the 2015 millennium development goals. [74597]

Clare Short: At the recent World Summit on Sustainable Development, participants reaffirmed their commitment to reducing the debt burden of the poorest most indebted countries. The Summit supported the Monterrey Consensus on external debt, recognising the need for the speedy implementation of the Heavily Indebted Poor Countries (HIPC) Initiative and the full financing of the HIPC Trust Fund to help the Multilateral Development Banks meet their share of HIPC costs. Since then, at the Annual Meetings of the World Bank and IMF, Ministers stressed the urgency of meeting the financing shortfall, which could be up to US$1 billion, and called on donor countries to make firm pledges and contributions as soon as possible. Savings from debt relief are used towards the financing for the poverty reduction strategies that HIPC countries are developing with civil society and donors. However, debt relief alone, no matter how generous, cannot ensure that the Millennium Development Goals will be met. This will require substantial additional donor resources as well as other measures, such as improvement of health through the Global Fund to combat HIV/AIDS, TB and Malaria, increasing the availability of education through higher quality and quantity of spending, and trade reform.

Tony Baldry: To ask the Secretary of State for International Development how the specific target reached on water and sanitation at the World Summit

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on Sustainable Development will relate to existing policies on the 2015 millennium development goals. [74607]

Clare Short: The World Summit on Sustainable Development placed poverty eradication at the heart of efforts to achieve sustainable development. The central focus of this Government's policy on international development, first set out in the White Paper on International Development in 1997 and reaffirmed in the second White Paper in 2000, is a commitment to the internationally agreed target to halve the proportion of people living in extreme poverty by 2015, together with the associated targets including those relating to water and sanitation.

My Department's strategies for achieving the international development targets in the water sector are set out in the March 2001 paper ''Addressing the Water Crisis—healthier and more productive lives for poor people''. DFID has been at the forefront of efforts to promote international acceptance of the new sanitation target agreed internationally at the World Summit on Sustainable Development. Better management of water resources, access to safe water and basic sanitation with hygiene promotion are key contributors to poverty reduction and other development objectives.

Tony Baldry: To ask the Secretary of State for International Development how the agreement made on trade at the World Summit on Sustainable Development will relate to the 2015 Millennium Development goals. [74528]

Clare Short: The Plan of Implementation agreed at the World summit on Sustainable Development provided a strong reaffirmation of the agreement on a ''development agenda'' at the 4 Ministerial Conference of the WTO at Doha, Qatar. The commitments made in Doha and again at the WSSD can potentially generate significant benefits for developing countries. The Ministerial resulted in an agreement on the need to reduce (with a view to phasing out) subsidies and barriers to trade in agriculture. Agreement was also reached on continuing negotiations on service and commitment to tackle tariff peaks, high tariffs and tariff escalation as well as non-tariff barriers to manufactured goods. The declaration on TRIPS recognised the need for a flexible interpretation of TRIPS to enable developing countries to protect public health during crises such as the HIV/AIDS pandemic Southern Africa.

The outcome of Doha represents a real achievement for developing country negotiators. As a recent joint paper on Market Access by the World Bank and IMF points out, estimates of the welfare gains from eliminating barriers to merchandise trade, range between $250 billion and $620 billion annually with about one-third to one-half accruing to developing countries. This is several times what developing countries receive in development assistance.

However, this is not yet a Development Round – it is a development agenda and is only the beginning of negotiations. To make it a real Development Round we will need to work to ensure that these commitments made become a reality.

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Tony Baldry: To ask the Secretary of State for International Development, when the Anglo-France Euro100 million fund to guarantee business ventures in developing countries agreed at the World Summit on Sustainable Development will be established; for how long will it operate; how businesses will be seconded; to whom it will be accountable; and how the fund will relate to the 2015 Millennium development Goals. [74524]

Clare Short: There will be no single fund. DFID will use a number of facilities, some of which are in existence and some of which are now being developed, through which to channel our funds. The French propose, in the main, to use other channels for their inputs. We will, however, work to coordinate inputs at the country and project level. It is also hoped that we may be able to persuade the French to channel some of their funds to the mechanisms we are developing with others, through which DFID funds will be disbursed.

There is no finite life to the various facilities we are developing through which our funds will be disbursed, but we are planning to channel Euro100 million through these over the coming three years.

The involvement of the private sector at the fund level will vary from facility to facility. At the project level, the funds will help to partner and/or guarantee (depending on the facility) private sector investment to help mitigate risks and encourage increased private sector flows.

Copies of the joint statement by President Chirac and my right hon. Friend the Prime Minister, together with Annexes describing the British and French approach to the initiative, have been placed in the library of the House.

Caroline Spelman: To ask the Secretary of State for International Development if she will list the changes she will make in her Department's (a) policies and (b) spending plans in response to the recent UN Conference on Sustainable Development in Johannesburg [74341]

Clare Short: The World Summit on Sustainable Development placed poverty eradication at the heart of efforts to achieve sustainable development. It brought together the agreements made at the Millennium Summit in September 2000, the Doha meeting of the World Trade Organisation in November 2001 and the Financing for Development Conference in Monterrey in March 2002. It integrated sustainability into the existing international agenda and added some important new targets, such as the target of halving the proportion of people without access to basic sanitation by 2015.

My Department will continue to focus on improving the effectiveness of the international development effort to reduce poverty and achieve the Millennium Development Goals. My Department will work with other Government Departments for a round of trade negotiations focused on making the international trade system fairer to developing countries, and will work to ensure that the commitments made at Monterrey on increasing the levels, and improving the effectiveness, of official development assistance are delivered.

The agreement of a new target on access to basic sanitation should lead to effective implementation through sector wide support on sanitation. In addition,

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water resource management, access to safe water, hygiene promotion and basic sanitation are key contributors to poverty reduction and other development objectives.

The spending plans of my Department have not changed as result of the World Summit. Following the recently announced 2002 Spending Review settlement, the UK's level of Official Development Assistance (ODA) will increase by #1.5 billion to reach 0.40 per cent. of national income by 2005–06. This is the highest UK ODA/GNI level for over twenty years, marks a 93 per cent. real terms increase since 1997 and represents significant progress towards meeting the UN target of an ODA/GNI ratio of 0.7 per cent. By 2005–06, we will also have more than met the target for aid volume set at Monterrey.

Tony Baldry: To ask the Secretary of State for International Development, when the Transparency Initiative on cooperation on anti-corruption in developing countries announced at the WSSD will be introduced; how many corporations have indicated a willingness to comply; how many firms will have to refuse to comply before the initiative becomes compulsory; and at what stage corrupt corporations delisting from the stock exchange would be sanctioned. [74596]

Clare Short: At the World Summit for Sustainable Development the Prime Minister announced a partnership of governments, companies, international development agencies and NGOs which would work together to develop an initiative to promote transparency of payments in resource extractive companies.

Natural resources are a vital asset for many developing countries and the global community has a responsibility to work together in order that the revenues generated by these resources are managed in an effective and transparent manner. The initiative aims to empower countries to make informed choices about their natural resource use in support of long-term sustainable development. This is intended to provide a virtuous circle of good governance, stability and investment that will benefit everyone.

At this stage the formal partners to the initiative are:





The partners have committed to develop a framework to promote transparency of payments from companies to host-country governments. This will help to improve government management of the revenue through their budget. Research currently being undertaken by the World Bank will provide the technical basis for the framework. Multi-stakeholder discussions are underway to develop a project strategy and timeline. We expect that the framework will be completed in the spring of 2003.

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All options for achieving transparency will be considered, including both voluntary and mandatory approaches, and a decision taken by all partners to the initiative after a full appraisal of the evidence. This process is likely to cover many of the issues raised by the hon. Member.

The partnership is neither closed nor exclusive and the UK will be actively engaged in trying to bring other governments and civil society organisations on board. To this end preparations are underway to host an international meeting involving all existing and prospective partners to this initiative.


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