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Lord Mottistone: My Lords, I too thank the noble and learned Lord for his Statement and even more for having given me the opportunity to see him yesterday on this subject when he reassured me to a great extent. I was speaking on behalf of the Isle of Wight, which is unique in being a county of England but also and more importantly an island. With a population of 126,000, it has a larger population than many of the islands of the Commonwealth which recently in Edinburgh, so I am told by a magistrate from the Isle of Wight, were told that they were equal with other members of the Commonwealth. Therefore, our importance needs to be seen in proportion.

Having said all that, I am most grateful to the noble and learned Lord for what he said and how he said it. Without his making a firm commitment, I got the impression--I should be grateful if the noble and learned Lord could confirm this--that there will be no rush to change for anybody, including the Isle of Wight, if it is seen that the more efficient way of handling things is to have an independent magistrates' courts committee as at present.

The Lord Chancellor: My Lords, your Lordships will not be surprised if I say that I have an instinctive sympathy for islands. I am conscious that every part of the country is individual, not least the Isle of Wight precisely because it is an island. I do not see the position of the Isle of Wight as my first priority. I see no need to bring forward a proposal in the first phase, which I have described. However, in fairness to the noble Lord I must tell him that the second phase may be another matter, but that entails my accepting what has come from the noble Lord--that there should be no precipitate

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change. Consultations could therefore begin next year. But an amalgamation could not occur until 2000 at the earliest if--I emphasise "if"--I concluded that that was the right way forward for the Isle of Wight.

Business of the House: Debates this Day

4 p.m.

The Minister of State, Department of Health (Baroness Jay of Paddington): My Lords, on behalf of my noble friend the Lord Privy Seal, I beg to move the Motion standing in his name on the Order Paper.

Moved, That the debate on the Motion in the name of the Earl of Sandwich set down for today shall be limited to two and a half hours and that in the name of the Earl of Shannon to two hours.--(Baroness Jay of Paddington.)

On Question, Motion agreed to.


4.1 p.m.

The Earl of Sandwich rose to call attention to India's socio-economic achievements after 50 years of independence, and to the need for the United Kingdom to help her partners to combat poverty throughout the sub-continent; and to move for Papers.

The noble Earl said: My Lords, I rise to call attention to India's socio-economic achievements since independence and to the need for the United Kingdom to help her partners to combat poverty throughout the sub-continent. I extend my thanks to Cross-Bench colleagues who have enabled me to initiate this debate today and to noble Lords on all Benches, many of whom are more qualified than I to speak on the subject.

India is not often the subject of debate in this House, perhaps because there are sensitive issues in the background, but the 50th anniversary of its independence is a proper occasion to put this right. Within this very wide topic I propose to speak chiefly on aid and development. I know that others will strengthen the related arguments for trade and investment.

I shall concentrate on India but try not to exclude her neighbours. India has reappeared in our financial press in the past few years, not as a poor non-aligned country as we once thought it was, but as an emerging market of many millions with a huge stake in the world economy. How far this image can be realised remains to be seen.

We in this country greatly value our friendship and our trade and aid links with India. I believe that India would like to reciprocate and think well of us, despite the unfortunate media coverage which obscured the undoubted benefits of the Queen's recent visit. Further, I suggest that we have an historic commitment to the people of India, and all the countries of the sub-continent, which is in no way altered by the public relations problems of our new Government. The question is: are we making sufficient effort to sustain this unique relationship and to make it a priority?

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Some ask why India, for her part, seems to be so unwilling to admit its close relationship with this country. That is often the case with separations. Once independent, one tries to remain on good terms but one does not often talk of the shared past. It is over, and so are apologies. There are new matters to talk about, on the basis of equality. I believe that the recent embarrassments have arisen because, even after half a century, we have not given up our colonial nostalgia and still assume that we should get special treatment--like being invited to mediate over Kashmir. Was the alleged remark of Mr. Gujral in Egypt that Britain is a third-rate power too cruel? I believe, nevertheless, that it serves as a useful reminder that India expects better of us, and of Foreign Office briefings.

Many noble Lords who have visited India will know, as did the early Congress leaders, that there is an astonishing parallel with Ireland, and not just in the colours of the national flag. Both countries inspire a strong mixture of emotions in Britain. Both have been harshly exploited by the British and have endured and resisted the pain, humility and denaturing force of colonialism over centuries. It is impossible to enter a debate on the socio-economic agreement without recording this. Yet, the words "apology" and "forgiveness" seem out of place. What is needed much more is understanding and the gradual rebuilding of confidence. This process takes time.

The Commonwealth and the monarchy are playing an important part, but it is between peoples, not nations or governments, through the mutual advantage of tourism and immigration, educational exchanges, trade, aid and investment, that we will ensure a lasting friendship.

I have a personal affection for India and Pakistan which goes back to 1962 when I first visited them by road, and to 1968, when my wife and I spent a year working in Delhi and Mumbai. We have kept in touch with many friends over the years. Two of my children have Indian godparents. My experience since has been chiefly of voluntary agencies working in the poorest communities. I consider it a great privilege to have contributed in small ways during my time with Christian Aid, Save the Children and CARE International, among others. During those 30 years I learned the simple lesson that, however much you think you can help, an outsider, whether an individual, an aid agency or government, will never have the same knowledge, understanding and expertise as the people themselves. They are all too aware of their problem but are deprived by others of the means to overcome it. The best thing one can do is to help them remove this exploitation, in whatever form, whether it is abuse of human rights, bureaucracy or just the neglect which leads to poverty.

In a nation of 950 million divided between hundreds of minority communities and 14 major language groups, Indian democracy is a remarkable survivor. Without underestimating the suffering that individual states and minorities feel, we as outsiders must be grateful for the relative stability of Indian politics over the past half-century. Long may this situation prevail throughout the sub-continent.

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Under successive governments India has done an enormous amount to improve the condition of the masses of people who, as we all know, suffer from a range of deprivations. Given the now obvious disadvantages of centralised government, the past 50 years have seen remarkable achievements. These should be recognised.

South Asia as a whole contains nearly half the world's 1.3 billion poorest people. It has over half the world's 160 million pre-school children who are underweight. India's infant mortality rate has halved since 1960, but it is a sad fact that, although the fertile plains and wealthier regions have surplus food, any numerical successes in combating malnutrition have been offset by population growth. India's fast-growing urban industrial wealth is still dwarfed by the vast extent of its rural poverty.

However, largely because of improvements in distribution and communications, India has conquered mass starvation. This is an amazing achievement. There has also been considerable success in reducing fertility, especially in India where the rate has reduced to about 3 children per family and in Bangladesh where it is only 2.9. All of the expenditure on birth control programmes and the propaganda on all the great hoardings with the red triangle has finally paid off. Nevertheless, there will be 1,000 million Indians before we reach the millennium.

The UNDP's human development index provides some of the best indicators. I give some examples. India and Pakistan at 138 and 139 in the index are only just ahead of the 30 poorest countries in the index. Bangladesh, which has always been their poor relation, is a little behind at 144, while Sri Lanka, despite her internal conflict, is way up at 91.

Indian literacy has risen from 19 per cent. in 1952 to 51 per cent. today. That is low by world standards but considerably ahead of her two neighbours. Her aggregated school enrolment is 56 per cent., which is the average for all developing countries. Kerala would be number 80 if it were measured on the index, with female literacy as high as 81 per cent., while Uttar Pradesh would be down at 123.

The national figures for education are still far too low, especially for female school enrolment in rural areas. It is arguable that India started rural development too late. Despite land reforms, Nehru paid too little attention to rural areas, and Mrs. Gandhi's garibi hatao--"abolish poverty"--campaign merely reinforced central government control and was insensitive to local needs.

India's present rulers are well aware of the mistakes of the past and the need to avoid inevitable wounding comparisons. President Narayanan, in his Independence Day speech, singled out self-sufficiency and the doubling of life expectancy as the two great successes. "But obviously", he said:

    "these are not enough for us to be complacent about. Other countries have gone far ahead of us. We have to move faster ... We have to put special emphasis on the development of infrastructure and investment".

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Illiteracy, he said, was the greatest obstacle to progress, and he called for a new partnership of government and people in a mass campaign against illiteracy.

Those are stirring words. They are intended not just for Indians but for foreign donors and investors who are attempting to assist. The international community is only too keen to emphasise its part in India's success, but it is only now beginning to admit its role in India's failures; for example, the top heavy giant hydro schemes like the Narmada Dam, clearly unwanted in its original form by the local population. It would be absurd to suggest that foreign aid, which is only $2 per head of the population per annum, has made the impact that Marshall Aid did in Europe. It is a tiny proportion of the economy.

Bilateral aid from OECD countries has been falling steadily. Even Japan and Germany are unable to make up what we and the USA now seem unwilling to give. IDA lending to south Asia has also recently fallen. It has been India, against all the obstacles of caste, race and poverty--Indian health workers, Indian teachers and Indian entrepreneurs--which has created the achievement of bringing India some way out of poverty.

It has also been Indian campaigners. The most positive phenomenon in the past two decades has been the involvement of people in their own development--notably the growth of community organisations. That is an increasingly important force for poverty eradication. I give one example. In Tamil Nadu alone there are an estimated 25,000 community organisations. That is more than the total in Kenya and twice the number in the Philippines, and they are the registered ones only.

I congratulate the old ODA, now reborn as the DfID, on its steady support for local as well as international NGOs, because it is undoubtedly through them that aid can reach the poorest people. The latest annual report gives prominence to ODA's work in Bangladesh in supporting organisations such as BRAC and Proshika as local NGOs while CARE Bangladesh was the channel for capacity-building aid to the smaller NGOs.

The larger NGOs are sometimes criticised as unelected bureaucracies. Aid through them may mean less formal accountability, but if they are efficient the cost generally outweighs losses. There is a much higher standard of monitoring and assessment than, say, 10 years ago.

I should like to ask the Minister to confirm that he intends to increase support for local NGOs in India as his predecessor did and, if possible, to comment upon the cost effectiveness of such aid which, in my view, is more appropriate and closer to the direct aid which the British taxpayer is prepared to pay than the subsidising of tied aid to large-scale power projects. Will he say whether some of the soon-to-be-abolished aid/trade provision money will be used for that kind of aid and investment in people, perhaps through the British Council or Commonwealth agencies?

May I ask the Minister, on behalf of Save the Children, why the education of young children is so low on the priority list? Now that the Andhra Pradesh primary education programme is ending after 10 years

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will he say what has been achieved there and, in particular, what has happened to the enrolment level and retention of girls?

I started deliberately with the "people" end because their well-being is the primary objective of international development. That is what we all want, not just this Government. We all want to see basic human rights in our foreign policy. It is just that some are more cynical than others about achieving them. We need to try. The latest Christian Aid campaign for fair trade through the supermarkets is a pioneering way of achieving those rights through the consumer. Today's announcement that the Government are helping Save the Children to rehabilitate child labourers in Pakistan is another reminder that what we buy cheaply here may be at the expense of human dignity elsewhere.

I do not underestimate the infrastructural programmes if they are targeted properly and the people are consulted. Mr. Wolfensohn's latest speech in Hong Kong makes it clear that the World Bank is taking on the responsibility as well as the rhetoric of community involvement and what he calls the difficult, riskier projects. I am certain that some aid money alongside inward investment is necessary to build capacity, open up markets and provoke competition.

Inward investment has increased over the past few years owing to the long overdue deregulation and liberalisation. Foreign investment made a huge leap from $151 million in 1992 to $1,750 million in 1995. No one doubts that India has tremendous potential, not least in her trade with Britain, if certain criteria are met. Many constraints are recognised by the ODI, such as structural weaknesses, inefficiency of small markets, skills shortages and weak technological capabilities. If India, Pakistan and Bangladesh cannot overcome those they will continue to depend heavily on central government interventions and foreign aid. At the same time, if aid can be injected at the right level, poorer communities will benefit and the vast consumer market which is already developing is bound to expand more dramatically.

I welcome every opportunity for developing countries such as India to appear more frequently in our media and aid agency publications and in debates in your Lordships' House and government statements. I hope that they increasingly will in the months to come. I beg to move for Papers.

4.17 p.m.

Lord Desai: My Lords, we are grateful to the noble Earl for bringing this Motion to our attention and allowing us to discuss it. He has shown his extensive knowledge and interest in development aid not just for south Asia but for the whole of the third world. He brings to the subject not just a great deal of knowledge but a great deal of empathy. We are all grateful to him. The subject is vast. Even with the extra time available to us, it will be difficult to cover.

I wish to refer to the remarks the noble Earl made about the recent visit of Her Majesty on the occasion of the golden jubilee of the independence of India and

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Pakistan. He was right to say that it had the hallmarks of a family quarrel. What is of more interest to me is that the family connection between India and Britain has come full circle because of the presence in Britain of a large community from south Asia. It is no longer just an old colonial relationship, it has come back to the diaspora. To some extent, as with a family, the UK may not want to criticise a former colony, but in this respect it becomes difficult not to take a critical view of certain developments because, in a sense, we are no longer sufficiently distant or identical. There remains great concern.

As regards Kashmir, an issue which I do not believe we should debate tonight, there are genuine differences within the British/south Asian community. It would be foolish to pretend that those differences do not exist. The fact that neither Pakistan nor India wants us to discuss the issue is neither here nor there.

A point which I hope my noble friend Lord Whitty will answer concerns recent press reports about our High Commissioner in Delhi. I trust that my noble friend will tell me that Her Majesty's Government have full confidence in the excellent work of Sir David Gore-Booth. I was recently in India and had occasion to see his excellent work. I hope that my noble friend will reaffirm that view.

India's major socio-economic achievement is its vibrant parliamentary democracy. One forgets that when India became independent in 1947 it was not fashionable to believe that a developing country should have a parliamentary democracy. Indeed, many people believed that an authoritarian government was desirable and that democracies were for only moderately rich countries, perhaps only European countries. But India is one of the older democracies in the world; older than some European countries, such as Spain.

One must admire the courage and vision of the founding fathers who in 1947 took a gamble on universal adult franchise. Indeed, France achieved that only in 1945: until then women were not given the vote. Those who took that decision did so knowing the extent of illiteracy and India's myriad problems. It was a bold gamble and it paid off.

Today India is a vibrant democracy. One sees the proliferation of regional parties, caste parties, parties of untouchables and so forth. That should not cause alarm because it means that more people have a stake in the system, asserting through political action the rights that they wish to claim. However, because the economic system has not grown at a rate that permits India to afford a rapid elimination of poverty, people have taken the political route as a way of claiming scarce resources for themselves.

That is a healthy process. During the past 50 years, one of the favourite arguments of those who advocate PR as an electoral system is the gap between the proportion of seats and the proportion of votes which parties claim. In India during the 1950s there was one-party dominance and great disproportionality between votes and seats. However, there is now greater proportionality because many small parties which have strong regional affiliations are able to express the voice

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of their community at parliamentary level. Although it leads to fragile coalition government that is no bad thing because one wants governments which are not strong but which are capable of doing good. Those two aspects are not the same: in India strong governments have often done bad things.

One should also note another Indian achievement, in particular since we have recently hosted the meeting of the Commonwealth heads of government. The modern Commonwealth was born as the result of the efforts of Nehru and the then Labour Government to refashion it from the old Empire. After independence and after becoming a republic, India decided to continue to be a member of the Commonwealth. That led to the refashioning and redefinition of the Commonwealth. If it has become a large and flexible organisation spanning all the continents, some of the credit must go to India and the people who led it in the early days.

As the noble Earl, Lord Sandwich, pointed out, while there have been tremendous political achievements there has been less than adequate progress in the social dimensions. He mentioned all the salient statistics and therefore I do not need to do so. However, in terms of literacy, health, the education of women and so forth, India presents a paradox. Yes, a great deal has been done, but a great deal more remains to be done. Compared with other developing countries, India is somewhat behind.

There is a related and more serious problem. Although the people who pioneered India's economic policy in the 1950s were sincere, intelligent and patriotic, they genuinely thought--indeed, it was then fashionable to do so--that rapid development would be achieved through a central, democratic planning mechanism with a large and growing role played by the state. After 50 years' experience, one must say that that rapid growth has not been delivered. The reasons are many and complex and we need not go into them.

However, although somewhat later than the countries of east and south-east Asia, India has decided to open up its economy and go down the path of liberal economic reform. It is trying to attract foreign investment as a way of enhancing development. Since 1991, when the policy was adopted, there has been an acceleration of development. The economy grew by approximately 7 per cent. in 1994-95. The growth has been slightly slower this year, but I believe that the logjam has been broken.

The difficulty is that because India, unlike many other countries, has a strong democratic process and a number of vested interests have been created from the old economic system, there is a great resistance. In India one cannot have liberal economic reform, as in many other countries; it must come through consensus. Consensus is difficult to achieve when there are gainers and losers. The losers are usually more powerful than the gainers because they have gained from the old system.

India is currently going through a great open democratic debate about the speed with which liberal economic reforms should be implemented. However, at

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the same time there are claims of justice and fairness which must also be examined if the reform is not to increase inequality, which is bad enough. We are witnessing reform which is perhaps not proceeding rapidly, but it is irreversible. I do not believe that India will return to its old habits, but it may not satisfy the impatience of many people who would like it to do what they want rather than what it wants.

As regards the excellent record of Indo-British partnership, whenever I speak to people who are interested in investing money in India I tell them that they must be patient. I tell them that they are going to a sophisticated country which will not roll over. Yes, it needs money but it is not so desperate as to do anything people want. In that respect, India is unlike China. During the past 20 years, China has attracted a large amount of foreign investment, but it can set up special export zones where there are no trade union and environment laws, and so forth. One cannot do that in India because it is governed by the rule of law. Whatever criticism one can make, those laws will not easily be set aside merely for the sake of rapid economic development.

The cheering thing about India is that it has started a consensual, liberalising economic process in which, throughout, there will be a consideration of fairness. While it will not go as fast as we should like--India will be a fleet-footed elephant at best and certainly not a tiger--it will yet show us that that combination of liberal and economic reform and fairness can be achieved.

The second half of the noble Earl's Motion refers to what the United Kingdom can do. As I said in relation to the recent visit, I believe that there should be less politics and more business. Much as we should like to advise India on how to run its own affairs, either domestic or foreign, we should keep our own counsel and as much as possible try to further business relations. The position of aid and development and NGOs was well described by the noble Earl and I have nothing to add. All his points were well taken.

I am sure that my noble friend Lord Paul will say more about business; he knows more about it than I do. But we need to develop business relationships where trust exists on both sides. If there is trust on both sides between Indian and British businessmen, we can perhaps overcome India's fears in relation to foreign capital, perhaps more in the context of British capital than any other capital. We can demonstrate our sensitivity and care for India's interests and assure India that when we take our capital to India it is in the mutual interest of both India and Britain.

Yes, there are 950 million people. I do not worry about it. When I was born, India's population was one-third of what it is now. India has tripled its population and more than tripled its food production. Therefore, the Malthusian threat worries me less than anything else. What we have to look forward to is that combination of equity and freedom and economic betterment.

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