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Mr. Stephen O'Brien (Eddisbury) (Con): I am grateful for the opportunity to speak in this important debate. I am always pleased to follow the distinguished and right hon. Member for Oldham, West and Royton (Mr. Meacher), with his long track record and undoubted concern on these issues. While he concluded on a more consensual note, a degree of anachronism crept into his arguments, because the whole point of the G8 and the Government's aims is that growth is not a zero sum game. The whole idea is that the growth of the rich countries can be spread through trade to help the growth of the developing nations and thus the world generally.
I start by setting out my total agreement with the proposition that the Government have a real opportunity at the G8 to set the agenda and the tone for the two paramount issues of far-reaching concernclimate change and relieving poverty in Africa. Those are the correct priorities, and they are laudable and timely. The Government have my party's support for those overarching themes. This is an occasion on which it is wholly appropriateas my right hon. Friend the Member for Bracknell (Mr. Mackay) saidto say that the Secretary of State's speech was one of the best and most memorable that I have heard in this House, and I am grateful to him for it. Equally, I appreciated the response from my hon. Friend the Member for Sutton Coldfield (Mr. Mitchell). There is a danger of the debate turning into a paean of praise, but the whole point is that we have a shared belief in the importance of the subject and in translating our will into effective action. That is the challenge for all of us in this debating Chamber as we discuss the deeply disturbing problems on the ground in Africa.
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Africa is a vast place and the topic is vast. I hope that the debate will bring out many aspects of the topic, but each one of us has to do our best to focus on the issues on which we can gain some purchase, instead of trying to cover the whole canvas. My own interest is well known, not least because I am Tanzanian born. I am chairman of the all-party group on that country, as well as the all-party malaria group. I am also involved with the all-party Africa group, whose chairman I see in his place, as well as being vice-chairman of the Uganda group and the debt, aid and trade group, which used to be the heavily indebted poor countries group and before that the Jubilee 2000 groupchanges of name that demonstrate how these issues have developed over time.
It is pleasing to note that Tanzania has seen a massive increase in the take-up of primary education, from 4 million to 7 million, to which the Secretary of State referred. Of course, as I was finding out in a conversation with the high commissioner of Tanzania to this country just the other day, the challenge is how to develop the secondary education system. By the time one gets any system in place for primary education, the cohort of children who benefit quickly become those who are challenged by the need to develop and consolidate the advantage, all of which has been hugely strengthened and assisted by the good will and financial aid from this country and many others. So that is now the challenge for Tanzania, as well as reaching out to the many rural areas where primary education has not even begun to become a reality.
Although such things, as the Secretary of State said, are certainly examples of aid that works, we need to pause for a moment to wonder whether the phrase that he might have used in his speech is that aid can and often does work, but not always. It is important for the future that western donor countries and their people continue to have the confidence that aid is worth while and an essential thing for us to do. That has been touched on, and it is part of the Secretary of State's and the Government's priority. So when we focus on poverty, in addition to the cancellation of debt, the big challenge now involves multilateral debt, which is subject to much wider agreements and where a solution is more difficult to secure.
Most of us feel that the progress made on private bank debt and bilateral debt through the Paris Club has been very significant and very helpful. However, we should bear in mind the words of Anthony Montague Brownthe former private secretary to Sir Winston Churchillwho, after Sir Winston Churchill died, went off into the City and the banks. In 1976 and 1977, he was instrumental in extending a lot of loans to developing countries. He said in his book that of course people never expected those loans to be repaid. When that is analysed, it is clear that those debts have long since been written off by those banks. The interest has long been way in excess of what was a sensible, commercial return. Let us face it. Many of those debts have in fact been cancelledrightlywhich shows the mental approach at the time.
We should not forget that there comes a timeperhaps this helps the argument of the right hon. Member for Oldham, West and Royton, who does not appear to be in his place at the momentwhen we
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should think about cancelling, either without conditions or without too many conditions, the debts that are causing some of the continuing problems
Apart from hoping that the Secretary of State will carefully consider the arguments made by my hon. Friend the Member for Sutton Coldfield about the advocacy funda topic and policy in which I was glad to be involved in a previous incarnation in the Housemy primary argument is that we must consider what gains the best leverage for the aid that is being translated from this country to Africa.
I am sure that many hon. Members are familiar with a very good body of work called the Copenhagen consensus, in which a rigorous assessment was undertaken of all the possible destinations for money in the developing countries and how best that can gain a purchase on the things that really matter when transforming those countries' structural inability to develop, so that they grow and gain the potential for economic independence. Such things were compared with many others that tended to be rather worthy.
I am inevitably bound to mention malaria. Hon. Members will know that I have an obsession with the need to tackle malaria. Rather than going through the detail, I shall quote what the Copenhagen consensus suggested:
"of less than . . . $50 a day and most of them less than . . . $25 which economists consider highly attractive in a very low-income country. As judged by the expert panel of Copenhagen Consensus, these are stunningly attractive investments. This panel of distinguished economists ranked controlling malaria as one of the top four global priorities that would yield the largest benefit/cost ratio."
Given that one of the other factors was dealing with climate change from the western world, we need to consider carefully whether we should devote aid to things other than health and education, clean water and the controlling of infectious disease. They bring the greatest advantages. In addition, we should free the rules for trade and support good governance.
How do we get the money past the tyrants to the poorest people? We face a difficult dichotomy. Where good governance exists, we should use it as a test and reward it with aid directed via Governments, through a liaison committee or non-governmental organisations. I used to think that aid should go directly to NGOs, but to reward good governance we have to go through the democratic processes so that democratically elected politicians gain some credit for what they have done. We should reward them "pour encourager les autres". Unfortunately, of course, les autres are often tyrants who do not allow people in the poorest countries to know about good governance. That is both a challenge and a dichotomy.
As there is a restriction on the overall package, we should use the money to best leverage effect and reward those who have shown good governance. It will increase the confidence of the west in continuing and sustaining that money if we ask for it to be directed where we would gain most leverage.
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The Copenhagen consensus made it clear, through a rigorous test, that controlling infectious disease was cost-effective. HIV/AIDS and TB unquestionably belong in that category. So, too, does malaria, which is hollowing out the generation of children that replaced those killed by HIV/AIDS.
We must concentrate on training people to deliver health care. Malaria is treatable and curable. The all-party group on malaria recently produced a persuasive report and I am grateful to the Under-Secretary for attending its launch. We can all collectively be proud and confident that, rather than just being worthy, we are making a huge and effective difference to the future of Africa and its peoples.
Our debate will rightly concentrate on the statistical evidence of the need to address Africa's poverty, to release its potential to grow and flourish, but as the Commission for Africa report correctly states:
"We have to remember that behind each statistic lies a child who is precious and loved. Every day that child, and thousands like her, struggle for breathand for lifeand tragically and painfully lose that fight."
I have had the opportunity to visit Africa only since I was elected, and I have witnessed the outstanding beauty of the continent and the warmth of its people, but I recognise the scale of the challenge that they face and their overwhelming desire for a better future. I am sure that the hon. Member for Tewkesbury (Mr. Robertson) will remember our visit to Rwanda. I shall never forget the scenes at the genocide site and the gacaca trial that we attended.
Last September, I visited Zambia on a British Council parliamentary exchange and followed the hon. Regina Musokotwane around her constituency in the rural south. We visited two schools. One had been opened by the state government, after the local community had waited almost 30 years; the other was built by local people themselves with supplies from a US charity. They had no money for a qualified teacher. They had no power or even a water borehole, and the school could offer only a basic syllabus for the first two years of primary education. The people were incredibly proud of their achievementrightly so; but at the same time as my visit, the World Bank and the International Monetary Fund were insisting on a nil budget deficit to enable the Zambian Government to reach the heavily indebted poor countries completion point. As a result, 5,000 qualified teachers had no job and the World Bank representative in Zambia was informing politicians that they should stop criticising his institution.
As the commission's report points out, debt relief is key to achieving the millennium development goals not only for the current HIPC group, but also for many other nations in sub-Saharan Africa. Was the meeting of G7 Ministers earlier this month what the Chancellor described as "a historic breakthrough" on the issue of debt? On certain key criteria, we can definitely say yes, but with the caveat that the fight to establish fully adequate debt relief has still some way to go.
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I am chair of the all-party group on debt, aid and tradeformerly the all-party group on HIPCand our group has long argued the justice of granting 100 per cent. debt relief to the world's poorest nations. I pay tribute to my predecessor as chair of the group, Julia Drown, the former Member for Swindon, South, for her marvellous work in pursuing that campaign. The decision taken at the meeting to grant 100 per cent. debt relief not only on the interest, but on the debt stock, for the world's 18 poorest countries, with another nine to be added in the next couple of years, was welcome.
The US Administration changed stance by agreeing to include International Monetary Fund debt as well as World Bank debt in the deal. That is significant because IMF debt is extremely onerous and constitutes half of all debt service obligations to the main multilateral institutions. The agreement to replenish the funds of the international financial institutions rather than reducing the amount available for grants was also significant. That news, when added to the recent announcement by EU states that they will effectively double their aid to Africa over the next five years and set a timetable to reach the target of 0.7 per cent, is a leap forward. I am sure that the private Member's Bill being promoted by my right hon. Friend the Member for Coatbridge, Chryston and Bellshill (Mr. Clarke), who is not in the Chamber, will help us to ensure that we reach that target.
This in itself is not however sufficient to allow Africa to meet its millennium development goals. Let us not forget that that was what the international community solemnly promised to achieve more than five years ago. We must go a great deal further and acknowledge now that such additional effort is achievable, rather than a pipe dream. Just last year, the international community cancelled $30 billion of debt owed by Iraq, which is more than has been delivered to the entire African continent over the past 10 years.
Even at this late stage, the G8 summit should next week consider extending the remit of the G7 debt proposal. The original HIPC list was drawn up in 1996 on a rather flimsy analytical basis and excluded key states such as Kenya and Angola. Kenya's total debt is $5.5 billion and 70 million Kenyans live on less than $1 a day, yet the World Bank considers its debt sustainable, despite the fact that 32 per cent. of its national budget is spent on servicing the debt, which is more than the amount spent on health and education combined. According to a debt sustainability analysis by the Jubilee debt campaign, Kenya needs total debt cancellation if it is ever to realise its millennium development goals. Some Kenyan politicians have suggested that the country is being penalised for keeping up debt payments. Debt relief seems to remain as elusive as ever for such nations.
It has been calculated that 35 non-HIPC, low-income countries warrant immediate 100 per cent. debt cancellation just so they can have a chance of meeting their millennium goals. To be fair, the UK Government have recognised that fact by agreeing to write off their share of multilateral debt for the world's poorest nations.
This month's agreement cancels only 10 per cent. of the debt owed by all 62 states with the lowest incomes which need 100 per cent. cancellation. The deal will
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amount to $1 billion per year for the next 40 years. That is $40 billion in nominal terms, but it is perhaps more accurately described as a net present value of $17 billion.
I know that the US Administration was reluctant to accept the sale of IMF gold reserves to fund debt relief and that an alternative decision was reached, but given that we in the UK accept the case for using the IMF's vast undervalued gold resources for the further extension of relief, will my right hon. Friend the Secretary of State continue pressing the point in the international community that we should give more relief and that we have a method of expanding debt relief? The undervaluation is estimated at $35 billion, so surely it is unreasonable to offer the people of Africa less relief from odious debt than what is offered to the current Iraqi Administration.
I welcomed the deal on Nigeria that was reached this week at the Paris Club. Will my right hon. Friend indicate the total amount of relief that will be granted to Nigeria as a result of the initiative?
I turn quickly to the conditionality that surrounds debt relief. Although I fully accept that we must show that relief is genuinely used properly and specifically for poverty eradication, I argue that multilateral institutions must accept responsibility for the many mistakes that they have made in the past by imposing inappropriate economic policies that were not focused on poverty reduction. I welcome the paper by the Department for International Development and the Treasury on conditionality, which acknowledges that fundamental changes must be made.
I am worried that those states that have still to reach the HIPC processthere are a number of themcould find themselves in exactly the same position as Zambia last year by spending all their energies on achieving nil budget deficits, rather than employing teachers, who are vital in the fight against poverty. The statement of the G7 Finance Ministers makes no concession on that. Instead, it ambiguously refers to good governance, accountability and transparency as crucial to releasing the benefits of debt cancellation. That appears to be a further test applied to low-income states on top of the already demanding requirements of the HIPC process.
It has been difficult to draw the boundaries between good governance conditions and economic policy conditions, with policy reforms, such as privatisation, sometimes promoted on an anti-corruption basis. Of course, there should be accountability, but as the hon. Member for Eddisbury (Mr. O'Brien) said, if we truly wish to foster good governance and democracy in a genuinely equal partnership with African Governments, we have to allow them and their citizens to make their own economic decisions and to take responsibility. Will the Minister assure me that the Government will press for further relief not to be subject to economically damaging conditionalities?
I congratulate my right hon. and hon. Friends in the Department for International Development on their enormous efforts over the past few months to place Africa at the top of the G8 agenda next week. That is proper and fit. To use a cliché, we are going forward and not back, but we need to maintain that effort so that
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Africa achieves its full potential, which is what we all desire. I hope that the Minister uses his good efforts to persuade the G8 to go even further next week.
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