AFRICAN DEVELOPMENT FUND (IMMUNITIES AND PRIVILEGES) (Hansard, 30 April 1973)

§ The Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Anthony Kershaw)
I beg to move, That the African Development Fund (Immunities and Privileges) Order 1973, a draft of which was laid before this House on 16th April, be approved The purpose of the order is to confer upon the fund, and persons connected with it, the privileges and immunities which are required to be conferred by Chapter VIII of the agreement establishing the fund. The main importance, therefore, of the order is that we cannot ratify the agreement unless the order has been made.
The African Development Fund is an international organisation established to supplement the activities of the African Development Bank, whose membership at the moment consists exclusively of African States. The participants in the fund will be the African Development Bank itself and several major non-African countries. The purpose of the fund is to make loans available on "soft" terms to African countries which are members of the bank and which, because of their economic situation and prospects, need assistance on those terms. The bank makes loans on more commercial terms.
The scale of privileges and immunities to be accorded to the fund follows closely that accorded to the Caribbean Development Bank, a similar financial organisation, in respect of which a draft order was approved by this House in February last year. On ratification we shall make certain reservations which are permitted by the agreement. These will have the effect of limiting the privileges and immunities which the fund and its personnel can enjoy in this country. For example, it will mean that the fund and persons connected with it will be able to be prosecuted for traffic offences and persons connected with the fund who are resident here will be subject to United Kingdom tax. These limitations are already included in the order.
The African Development Fund shares the headquarters of the bank at Abidjan in the Ivory Coast. It is not, therefore, 926 expected that it will set up an office in this country, so the practical application of the order will be very small. Nor will the fund operate, so far as one can tell, in its corporate capacity in this country, as it can, by its own charter, borrow only on "soft" terms and cannot participate in the issue of securities.
I trust that the House will approve the order and so demonstrate our continuing support for and participation in measures designed to promote the economic growth of developing countries.

§ Mrs. Judith Hart (Lanark)
I am grateful to the Minister for giving us a picture of the African Development Bank and the African Development fund. One has no objection whatever to this order, but since we have the opportunity to get a little more clarification, would he answer two or three questions?
First of all, as the hon. Gentleman said, there are several non-African countries involved in the bank and in the fund. Could we have more detail? These matters become the more relevant in the light of our entry of the EEC and negotiations going on about the European Development Fund. It would be interesting to know which non-African countries the Minister means.
Second, what is the present scale of British financial involvement in, first, the bank and, second, the fund? There is developing a view that it might be a good tiling if a higher proportion of our direct official development assistance programme were channelled through the development banks and the development funds, on the ground that these are now being run by people who know their own areas and their own problems and can make their own decisions about what is needed and what is not so badly needed. A little decentralisation of donor country aid in the direction of the development banks might be very welcome. It would be useful to know the scale of our involvement and whether the Government have plans to increase it.
Third, to what extent are the loans given by the bank and the fund indeed on "soft" terms? One knows that some of the loans provided are on "soft" terms but that others are strictly commercial. One would like to know the 927 proportion between the two. If anything is becoming crystal clear in the "third world", it is the problem of debts, the rescheduling and repayment of debt and the payment of interest on debt which arises from loans given in the past by various aid agencies, both bilateral and multilateral, which were on pretty "hard" terms, the repercussions of which are now being felt. Would the Minister give us just a little fuller picture on these points?

§ Mr. Kershaw
The non-African countries which have signed are: Belgium, Brazil, Canada, Denmark, Finland, the Federal Republic of Germany, Italy, Japan, the Netherlands, Norway, Sweden, Switzerland and ourselves.
Next, what are our existing financial commitments? As I apprehend it, there is none in this connection because we have not yet started. But we have it in mind to be committed. If I may, I shall write to the right hon. Lady about that and set out our future approach to the matter. At this moment I think I can say without fear of contradiction that we are not committed, though we intend to be, and that is the purpose of our joining.
The normal "soft" terms—the right hon. Lady will probably recall this, having taken a leading part in her time in these matters—are a moratorium of five to seven years, with very low interest or a nil rate of interest, and total repayment time of 25 years. This is now the standard and those are the terms which we intend should be the "soft" terms at this time.
I shall take careful note of what the right hon. Lady has said and write to her to clear up any questions of detail which I have not covered in this short reply.