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6.40 p.m.

Lord Chesham: My Lords, I, too, thank the noble Lord, Lord Wright of Richmond, for initiating this fascinating debate today. I wish to be rather more specific than many other speakers as to some practical steps that should be taken by the Government over the next five months. It appears to have escaped the notice of some people that we are already one month into the six months of the presidency.

I understand that the long promised review of the dependent territories is still not available and will not be available in time for the dependent territories conference on 4th February. I find that quite extraordinary. I have given the Minister notice of my next question. Can we be assured that her right honourable friend the Foreign Secretary will not refer to the results of the review in his keynote address to the conference on 4th February, bearing in mind the requirement expressed in paragraph 27 of the ministerial code that,

I am sure that noble Lords will agree that this review will represent "an important announcement".

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Noble Lords may wonder why I have asked this question in the context of today's debate. I can assure noble Lords that it is relevant in relation to the conflict between Spain and Gibraltar. It may be helpful to your Lordships if I were to outline political activities in this connection over the past few months. Spain has applied to join the NATO command. The Foreign Secretary immediately reacted to this and indicated that Britain would use its veto to stop Spain's membership unless and until the Spanish Government withdrew their restrictions on military and civilian aircraft on the approaches to Gibraltar airport. He further asked that the sea restrictions should be lifted.

What has happened? At the meeting of NATO held in early December Her Majesty's Government would appear to have capitulated and have agreed to allow membership on condition that Spain cannot participate fully in the NATO structure until such time as the restrictions on military aircraft are lifted. There is no mention of civilian aircraft and no mention of the sea. Where does Gibraltar now stand vis-a-vis its NATO command? Will this be removed to Spain? Will Gibraltar remain a British military base and lose its NATO status? Whilst NATO is not directly associated with the EU presidency, this is a moment in time when Her Majesty's Government could exert pressure on Spain in a move to resolve the Gibraltar situation.

In the meantime the continual, well documented harassment continues. I refer to Spanish claims to sovereignty; delays at border crossings; the 350 telephone number; the non-recognition of Gibraltarian ID cards and passports etc., etc. The UK presidency offers an excellent opportunity to bring these items forward towards resolution. The Minister in a recent debate on Gibraltar in this House stated that she would be happy to take further the issue of Gibraltarian disenfranchisement for European elections. Has she done so, and what has been the result?

The noble Lord, Lord Thomas of Swynnerton, said he believed that we should look to a solution on Gibraltar based on the Spanish proposal of joint sovereignty. Will the noble Baroness repeat the assurances of this and previous governments that the question of sovereignty is up to the Gibraltarian people and is not negotiable?

I now leave that point and go slightly farther afield. In common with my noble friend Lady Young, I wish to encourage Her Majesty's Government to secure EU agreement to negotiate a waiver from the WTO rules, to maintain the current Lome preference to the ACP countries for a 10 year period, and to safeguard the livelihoods of smallholder banana producers by guaranteeing sufficient market share to those countries' economies which critically depend on the EU banana market, whilst providing comprehensive support for economic diversification. On a recent trip to the Caribbean I was surprised to discover that one of the easier forms of diversification is the growing of vegetables particularly for the cruise liner market. I am informed that all cruise liners are revictualled in Miami. Is that perhaps a consequence of the Helms-Burton legislation in the United States?

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6.45 p.m.

Lord Desai: My Lords, we have had a fascinating debate so ably introduced by the noble Lord, Lord Wright of Richmond. We have also enjoyed two excellent maiden speeches. So many points have been made that it is tempting to respond to what has been said rather than say something different. However, the debate concerns foreign and Commonwealth affairs and therefore I feel I should say something about an area of the Commonwealth I know something about and which is important; namely, south Asia.

South Asia is important as it contains two nuclear powers; one is an actual nuclear power and the other is potential. Both have refused to sign international treaties which forbid nuclear testing and have taken a determined stand. They are in a state of at least tepid, if not hot, war with each other. India and Pakistan are engaged in hostilities at an altitude of 18,000 feet. There are daily shootings. This situation needs to be watched. I do not think that the EU presidency is at all designed to consider former interests of any country other than France. France is the only country to have its former colonies looked after by the EU. I believe that Commonwealth interests are likely to be neglected by the EU. I hope that while the Government are occupied with the EU presidency they will not take their eyes off the situation in south Asia as, in terms of foreign policy, it is an important region for us. It is also a potentially dangerous region, given the likely change of government in India and Bangladesh and the rather delicate situation in Sri Lanka. There is also the consideration that about 1.5 billion people live in the area. Therefore we ought not to take our eyes off it.

The Commonwealth as a whole is a global sub-system; it reaches across all continents. It is difficult to encompass Commonwealth interests within the framework of the EU presidency but we ought not to miss the opportunity offered to us by the Commonwealth for across-the-globe diplomacy. I refer to Iraq and many problems with regard to Islam. There are in the Commonwealth a number of Moslem countries which could be of assistance through quiet diplomacy if we encounter problems in the Middle East. That kind of lateral thinking may be helpful. The Commonwealth is useful in terms of facilitating diplomatic channels and it is a region which is of great economic interest to us. For those reasons, as I said, the Commonwealth should not be neglected while we are concentrating on the EU presidency.

I wish to mention another issue to which reference has been made. It is development in the context of the presidency. I am astonished that the debt of highly indebted, poor countries, which amounts to no more than 5 billion dollars, should be such a tough nut to crack. International agencies have been unwilling either to write off, or do something drastic about, the debt of those countries. Yet 45 billion dollars can be found overnight for badly made private loans by commercial banks. How can those banks find 90 billion dollars for bad debts by relatively rich countries? I do not begrudge those countries 45 billion dollars; we all have to pay for bankers' mistakes. But it is somewhat astonishing that the 5 billion dollars has been left standing.

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I know that the Government have done sterling work. I urge them, however, during their EU presidency, to push much harder. One country reluctant to agree to a generous settlement of the debt problem is Germany, both in the IMF and the World Bank. I believe that the problem of debt can be tackled more vigorously.

I was fascinated by the speech of the noble Lord, Lord Howell of Guildford, who referred to the Asian crisis. It may look a serious crisis, especially to those in south-east and east Asia. To some extent there is a problem of confidence. It is difficult to say whether we are at a precipice and going down, or at a turning point. However, the fundamental strength of south-east or east Asian economies is such that if the IMF does not mismanage the financial confidence problems, I am sure that within a year to 18 months most of the south-east Asian economies, with perhaps the exception of Indonesia, will return to prosperity.

The return of south-east Asian or east Asian economies to prosperity, as the noble Lord implied, is in our interest. They are competitors, but their prosperity is important for our prosperity. We should not regard them as rivals. Nor should we celebrate in a quiet way the fact that they are on a downward slide. I believe that mistakes were made. We have learned that while the IMF has been watching jealously the amounts of public indebtedness, it has not watched the figures as regards private indebtedness. In a globalised financial market, private indebtedness is a much bigger problem than public indebtedness. In contrast, the IMF, which is unwilling to forgive public indebtedness, is willing and able, and is even cajoling people, to write off large private debts. Private debts may have to be written off, and some banks may have to go bust. That is a fact of life in a private market economy. But unless there is massive mismanagement, I believe that we shall see the return to prosperity of the south-east Asian economy.

The noble Lord, Lord Wright, and many other noble Lords, referred to Islamic fundamentalism. It is clear that Islamophobia is a bad thing. Like all such doctrines of hatred, it arises from ignorance and prejudice. But when one talks about Islamic fundamentalism, as with Christian fundamentalism or Hindu fundamentalism, it has nothing to do with religion. It is a secular political programme by certain people to capture the government of a country and to change policies in a certain direction. Part of the current problem of the United States arises from Christian fundamentalism; but I shall not go into that. It is important that Islamic fundamentalism is doing most harm to Islamic countries. It is undermining the stability of modern, progressive Islamic countries such as Egypt and Algeria. It has undermined Afghanistan; it has almost ruined Iran. When we take a stance on Islamic fundamentalism, it is important to remember that we should be encouraging democratic forces wherever they are.

Paradoxically, in some cases, as in Algeria, if a fundamentalist party wins an election, we should let it govern and not stand in its way. The big mistake in Algeria was made at the beginning. We are now suffering because the nature of Islamic fundamentalism was not understood.

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