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House of Commons

Wednesday 29 March 2006

The House met at half-past Eleven o'clock

PRAYERS

The unavoidable absence of Mr. Speaker having been announced, The Chairman of Ways and Means took the Chair as Deputy Speaker, pursuant to the Standing Order.

DEEPCUT REVIEW

Resolved,

Oral Answers to Questions

INTERNATIONAL DEVELOPMENT

The Secretary of State was asked—

Asia

1. Mr. Piara S. Khabra (Ealing, Southall) (Lab): What steps his Department is taking to co-ordinate international aid and development in Asia. [61825]

The Parliamentary Under-Secretary of State for International Development (Mr. Gareth Thomas): The Department remains at the forefront of efforts to improve the effectiveness, quality and co-ordination of aid to Asia. Earlier this month, we successfully hosted a major international conference to chart the development partnerships that are needed with Asian Governments and civil society. Later this year, we will take part in a further, smaller seminar specifically focused on aid effectiveness in the region.

Mr. Khabra: I thank my hon. Friend for that answer. What part of the development budget is allocated to primary school education in India?

Mr. Thomas: First, I pay tribute to my hon. Friend's continued advocacy of investment in development assistance for India. He is right that more progress is needed in getting every child into primary school, and he may be aware that we, in partnership with the World Bank and the European Commission, have committed some £210 million to India's primary education drive. He will also be pleased to hear that the number of children in India who do not go to school has fallen from some 25 million in 2003 to 9.6 million in November 2005. We have made progress, but there is more that we need to do.
 
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Mark Simmonds (Boston and Skegness) (Con): Inward investment and export-driven growth have lifted 500 million people in Asia out of poverty, yet the area remains home to two thirds of the world's poor, with dramatic wealth disparities. Many people in Asia are concerned that they are ignored, in preference to Africa. The UN Development Programme believes that the solution is greater regional co-operation, but a DFID report criticised the Asian Development Bank for being too centralised and poorly co-ordinated. What is the Minister doing to strengthen DFID's support for region-wide initiatives on matters such as water, transport, disease, disaster preparedness, corruption and drug trafficking, which all play a part in exacerbating and perpetuating poverty in Asia?

Mr. Thomas: As I mentioned in my answer to the original question, we hosted a major international conference, attended by more than 150 Asian Ministers, senior officials and representatives of business and civil society, which was opened by my right hon. Friend the Prime Minister and Pakistan's Prime Minister Shaukat Aziz. Its aim was precisely to talk through the challenges that still have to be met if the millennium development goals in Asia are to be achieved. It looked at what has been successful over the past 10 years, and at the further challenges ahead. The hon. Gentleman will be interested to know that, at that conference, we committed some $50 million to try to catalyse further investment in infrastructure projects in Asia. We continue to work on supporting Pakistan's anti-corruption strategy and further efforts to improve public financial management across the region. We are already doing a lot to support tackling the governance problems to which he rightly alluded, but he will know that the challenges facing us with poverty in Asia mean that all donors have to do more.

Nigeria

2. Mr. Shahid Malik (Dewsbury) (Lab): What assessment he has made of the impact of Nigeria's debt repayment programme on its poverty reduction strategy and economy. [61826]

The Secretary of State for International Development (Hilary Benn): The October 2005 Paris Club agreement with Nigeria—which the Nigerian Government pushed for—represents the largest debt-relief deal ever in sub-Saharan Africa. The UK alone will cancel £2.8 billion and the Government of Nigeria will use part of its oil windfall to pay off the remaining debt. The savings from the deal will free up at least an additional $1 billion a year for Nigeria to spend on reducing poverty, and will help employ an extra 120,000 teachers and enable 3.5 million children to go to school.

Mr. Malik: I thank my right hon. Friend for that response. There is speculation in certain quarters that Britain is a net beneficiary of Nigeria's debt repayment programme. Will he confirm or deny that that is the case, and offer clarification?

Hilary Benn: My hon. Friend is right: two thirds of Nigeria's debt will be written off, and the remaining third will be paid back at a discount. The UK will receive £1.7 billion as a result, but I emphasise that the
 
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Government of Nigeria asked for this deal, and pressed for it. Nigeria will make a one-off payment but will receive a continuing long-term benefit. As a result, it will make the savings of $1 billion in the first year to which I have referred already. That money will go on further investment in health, education, water, power, agriculture and public works. Frankly, it would have been impossible for Nigeria to have secured such a deal two years ago, as the world would not have agreed it. That is a testament to the country's efforts at reform.

Mr. Stephen Crabb (Preseli Pembrokeshire) (Con): The Secretary of State will be aware that Nigeria ranks close to the bottom of Transparency International's index of corruption. What independent studies has DFID commissioned on the effectiveness of our aid to countries where there is a high level of corruption? How do such assessments affect decisions about where we target our aid resources?

Hilary Benn: I am aware that the hon. Gentleman takes a close interest in these matters, as his ten-minute Bill yesterday demonstrated. We base our assessments on the situation in different countries and we adjust the way in which we give our aid according to the outcome of the assessment. Corruption has indeed been a big problem in Nigeria for a long time, but the Government have begun to take action and the Economic and Financial Crimes Commission has launched a number of investigations that have resulted in the prosecution of high-ranking politicians and others. They have also reformed their public expenditure management.

Due to that process of reform Nigeria was able to persuade the Paris Club and the international community to back the debt deal, which is an international acknowledgement of the efforts that Nigeria has begun to make. Furthermore, Nigeria is one of the strongest supporters of the extractive industries transparency initiative and I welcome that enormously.

Gordon Banks (Ochil and South Perthshire) (Lab): Does my right hon. Friend agree that, as well as Nigeria's ability to reform further its Government institutions, which we are seeing, the paramount factor in the country's development will be its ability to grow its own private sector?

Hilary Benn: I agree. One of the ways to encourage private sector investment to Nigeria is to tackle corruption. If investors are faced with the choice between a country where corruption is endemic and a country where it has been tackled, it is not surprising if they choose to invest the money where they will not have to pay bribes.

Mr. John Leech (Manchester, Withington) (LD): I understand that the Chancellor said that there are technical reasons why the British Government cannot reduce Nigeria's debt. Can the right hon. Gentleman explain what they are and is he committed to overcoming them?

Hilary Benn: I am not sure that I follow the point that the hon. Gentleman makes, because in fact we are contributing to reducing Nigeria's debt by having agreed to the deal as part of the Paris Club. If, as may be
 
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the case, the hon. Gentleman is referring to the Export Credits Guarantee Department, he is aware that it has an obligation to break even on its activities and to recover debt owed to it. It might help the hon. Gentleman to know that Dr. Mansur Muhtar, the director general of the debt management office in Nigeria, said:

That is the view in Nigeria and that is why we supported the deal.


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