§ 3. Mr. Biggs-Davisonasked the Minister of Overseas Development what study he has made of the reasons for the drop in the volume of British private capital invested in developing countries during 1966 when compared to 1965; and if he will make a statement.
§ The Minister of Overseas Development (Mr. Reg Prentice)It is not possible to discern a trend on the basis of two years' figures, but about one-third of the decline was due to fluctuations in oil and portfolio investment. The 1966 figure is still provisional, and the detailed country 2105 analysis of direct investment which would be necessary for a study is not available.
§ Mr. Biggs-DavisonIs not one of the major causes of this decline the lack of insurance against political risks? Will the Minister say with how many countries we now have treaties for the protection of private investments? Is it still only one country?
§ Mr. PrenticeI need notice of the latter part of the question in order to give a figure. On the earlier part of the question, political disturbances, sometimes with violence, have been a factor in this. The hon. Member is making a comparison with 1965, which was a higher year than the preceding years. It would probably be more objective to take a longer view of the problem.
§ Mr. BraineIs it not the fact that this country is almost alone among advanced industrial countries in not having a system of insurance against political risk? Does not the right hon. Gentleman feel that it is high time for the Government to take another look at this?
§ Mr. PrenticeThat is a question for my right hon. Friend the President of the Board of Trade. We have to bear in mind the present balance of payments problems and the difficulties of giving new direct incentives to individual overseas investment at this stage.