HC Deb 20 March 1978 vol 946 cc970-3
38. Mr. Forman

asked the Minister of Overseas Development if she will make a statement about the Government's policy with regard to the writing off of the outstanding official debts of the poorest developing countries.

43. Mr. Spearing

asked the Minister for Overseas Development if she will make a statement on the outcome of the recent Trade and Development Board meeting in Geneva.

Mrs. Hart

At the UNCTAD Trade and Development Board meeting earlier this month, I am pleased to report that a significant measure of agreement was reached on two issues of considerable importance in the North-South dialogue. First, in the field of aid policy, we and other developed countries were able to join in an undertaking to seek to adopt measures to adjust the financial terms of past aid, or other equivalent measures, for those poorer and least developed countries facing serious development problems. We are now urgently examining the scope and modalities of any scheme which we might adopt following this undertaking. Second, in the debt field, we reached agreement on four basic concepts on future operations relating to the debt problems of developing countries. Further work in UNCTAD will take account of these common concepts.

With permission, Mr. Speaker, I shall publish in the Official Report a copy of the operative paragraphs of the resolution adopted by the meeting.

Mr. Forman

If this multilateral progress in UNCTAD and elsewhere gets bogged down, is the right hon. Lady prepared to recommend to her colleagues that the Government should consider proceeding unilaterally on the question of official debt for the poorest developing countries? Can she confirm that, if that were to be the case, she would see that countries with regimes hostile to Britain or tyrannical to their people, such as Uganda and Kampuchea, would be excluded from such a concession?

Mrs. Hart

On the first question, I do not think that this really arises, because my understanding from the TDB meeting in Geneva is that all the developed countries subscribe to the phrase We will seek to adopt these measures. It is a question now for us to consider whether we do it case by case or across the board for the poorest countries. But I can assure the hon. Member that the Government will take into account his last point, as I do myself. Clearly, there might be exceptions that we would wish to make.

Mr. Spearing

Although the whole House will welcome the results of the conference, does my right hon. Friend agree that countries which have not incurred debts because they did not have the products whereby they could borrow will not be helped by this? Can she say whether she was able to contribute to the progress of the conference in her capacity as Minister in attendance?

Mrs. Hart

I think that the essential factor which arises here is that there is obviously a real inconsistency between giving grants, as we have done for the last three or four years, to the poorer developing countries and at the same time clawing back from them debt repayment and servicing. To the extent that there are countries—there are very few amongst the poorest countries—for which this would not provide advantage, there is plenty of opportunity open within the aid programme to increase our level of aid to them, and we seek to do this within the terms of the White Paper "Aid to the Poorest". The two are quite different.

Mr. Rhodes James

While strongly supporting the two points made by my hon. Friend the Member for Carshalton (Mr. Forman), may I ask the Minister for an indication of the time scale that we are discussing? How soon can we expect a more positive statement rather than the vague phrase "seeking to adopt measures"?

Mrs. Hart

I suppose it will not take my colleagues and myself more than a couple of months to determine the modalities of this matter, and thereafter I should be able to report to Parliament on the results.

Following is the text: Operative paragraphs of the Resolution adopted by the UNCTAD Trade and Development Board meeting

A

  1. 1. Members of the Board considered a number of proposals made by developing and developed market economy countries.
  2. 2. The Board recognises that many poorer developing countries, particularly the least developed among them, face serious development problems and in some instances serious debt service difficulties.
  3. 3. The Board notes with interest the suggestions made by the Secretary-General of UNCTAD about an adjustment of terms of past bilateral official development assistance (ODA) in order to bring them into line with the currently prevailing softer terms.
  4. 4. Developed donor countries will seek to adopt measures for such an adjustment of terms of past bilateral ODA, or other equivalent measures, as a means of improving the net ODA flows in order to enhance the development efforts of those developing countries in the light of internationally agreed objectives and conclusions on aid.
  5. 5. Upon undertaking such measures, each developed donor country will determine the distribution and the net flows involved within the context of its own aid policy.
  6. 6. In such a way, the net flows of ODA in appropriate forms and on highly concessional terms should be improved for the recipients.
    7. 973
  7. 7. The Board recommends that the fifth session of the Conference should review measures taken in pursuance of the above.

B

  1. 1. In accordance with resolution 94(IV), the Board has reviewed the intensive work carried on within UNCTAD and other international fora on the identification of those features of past situations which could provide guidance for future operations relating to debt problems of interested developing countries.
  2. 2. Notes with appreciation the contributions made by the Group of 77 (TD/B/670, Annex II) and by some Group B members (TD/B/L.498).
  3. 3. Common to the varying approaches in this work are certain basic concepts which include inter alia:
    1. (i) International consideration of the debt problem of a developing country would be initiated only at the specific request of the debtor country concerned.
    2. (ii) Such consideration would take place in an appropriate multilateral framework consisting of the interested parties, and with the help as appropriate of relevant international institutions to ensure timely action, taking into account the nature of the problem which may vary from acute balance-of-payments difficulties requiring immediate action to longer-term situations relating to structural, financial and transfer of resources problems requiring appropriate longer-term measures.
    3. (iii) International action, once agreed by the interested parties, would take due account of the country's economic and financial situation and performance, and of its development prospects and capabilities and of external factors, and bearing in mind internationally agreed objectives for the development of developing countries.
    4. (iv) Debt reorganisation would protect the interests of both debtors and creditors equitably in the context of international economic co-operation.
  4. 4. The Board requests the Secretary-General of UNCTAD to convene a meeting of an Intergovernmental Group of Experts to recommend to the tenth special session of the Board prior to the fifth session of the Conference detailed features for future operations relating to debt poblems of interested developing countries taking into account the above-mentioned concepts and in the light of proposals made on this issue.