§ 6. Mr. Wareingasked the Secretary of State for Foreign and Commonwealth Affairs if he will assess the implications for the United Kingdom's relations with the countries concerned of the current Latin American debt crisis.
§ The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Tim Renton)The Latin American debt crisis has of course led to an intensified dialogue between ourselves and the debtor countries of the area. As my right hon. Friend the Chancellor of the Exchequer told the House on 25 October 1984, the British Government have played a leading role in promoting co-operation between Governments, international institutions and banks to tackle the problem of international debt.
§ Mr. WareingWhat will be the Government's response when the rescheduling of the Nicaraguan debt is considered later this year? Will they merely follow their usual role as puppets of President Reagan, or will they be generous and take on board the overriding regional development problems of the area, as our EEC partners are doing? Does the Minister agree that we should be looking for other ways in which to finance development in countries such as Nicaragua, especially through direct investment in the natural resources of such countries, to overcome their long-term problems?
§ Mr. RentonThe Government are playing a constructive part in considering and helping to restructure the international debt problems of Latin American countries. We are aware of Nicaragua's economic difficulties. We hope that its Government will agree to follow International Monetary Fund advice on policies to tackle those difficulties. We understand that the World Bank is discussing with the Nicaraguans the resumption of regular payments of outstanding debts to the World Bank.
§ Mr. Maxwell-HyslopWith the return of an elected President to Brazil, will the Government use their best endeavours, with other creditor nations, to ensure that Brazil is not submitted to stresses that are incompatible with a full return to democratic Government throughout that enormous country?
§ Mr. RentonWe strongly welcome the election of the first democratically elected President of Brazil for 21 years. My right hon. Friend the Prime Minister has sent a message to Dr. Neves congratulating him. As my hon. Friend said, it is significant that Brazil is making important steps towards tackling her overseas debt problems. It is a matter of great pleasure that my right hon. Friend the Minister for Trade was able to announce in December that, for Brazil, there is now a resumption of medium-term export credit cover from Britain. I shall bear in mind the other points that my hon. Friend has made.
§ Mr. HealeyNow that the Government and British banks have contributed to the agreement on Argentine debt, which was reached a few weeks ago, is it now established policy of the Government to lend Argentina money which might be spent on rebuilding the Argentine armed forces with weapons supplied in part by British firms?
§ Mr. RentonI am glad that the right hon. Gentleman expresses support for the action taken by the Paris club recently in agreeing to multilateral settlement of Argentina's debts. We look forward to playing our part in establishing what can be done on bilateral debt arrangements between Argentina and Britain.