Aid to Government

HC Deb 21 April 1986 vol 96 cc17-8

55. Mr. Stuart Holland

asked the Secretary of State for Foreign and Commonwealth Affairs what is his policy on providing aid to Governments who have not reached agreement with the International Monetary Fund on structural adjustment.

Mr. Raison

Our general policy is to make balance of payments support for countries in difficulty conditional upon agreement with the International Monetary Fund. In the absence of such agreement, the level and form of any assistance must depend upon individual circumstances, and in particular on how effectively aid can be used.

Mr. Holland

The Minister will be aware that, in practice, the IMF's structural adjustment terms have proved a formula for deflation, devaluation and the denial of the public sector and social spending. Is he not worried that countries such as Tanzania have very little prospect of development if those IMF conditions are applied? Is this to be a general or universal policy? Will the Minister make an independent evaluation of the real development needs of those countries, or has the ODA simply become an agent of IMF policy?

Mr. Raison

I do not accept the hon. Gentleman's comments. We are absolutely right to support those countries which are prepared to take the steps of policy reform, which are widely accepted as desirable. It is interesting that the recent development committee communiqué stressed the growing commitment of African Governments to policy reform such as the hon. Gentleman talked about.

Mr. Beith

Is the Minister aware that it is often possible for British aid to contribute directly to the welfare of peoples, even when the policies of their Governments on economic or other matters do not meet with our satisfaction?

Mr. Raison

We continue to give aid to countries such as Tanzania, where we have useful programmes. I remain of the view, which is being accepted by an increasing number of African countries, that if we do not have policy reform there will not be any progress but a continuation of the rather depressing record of aid going in without commensurate results coming out.