World Bank

HC Deb 14 July 1986 vol 101 cc679-80

46. Mr. Yeo

asked the Secretary of State for Foreign and Commonwealth Affairs when he last met officials of the World Bank.

Mr. Raison

My right hon. and learned Friend and I had meetings with the then president of the World Bank on 13 March. My officials have also recently had separate discussions here with the two senior vice-presidents.

Mr. Yeo

Bearing in mind that last year there was a transfer of resources from developing to developed countries, does my right hon. Friend share my concern at the implications of that position for debtors, creditors and the world economy? Will he undertake to support any initiatives proposed by the World Bank designed to reverse that position?

Mr. Raison

The World Bank is concerned with this problem, and so am I. We support a generous eighth replenishment for IDA and in due course there will be a new general capital increase for the bank. Also, we welcome the proposed role of the World Bank in implementing Secretary Baker's initiative, which is to make fast disbursing loans available to support the adjustment efforts of heavily indebted countries.

Mr. Beith

Does the Minister hope to have a meeting with the new president of the World Bank before very long? Will he take the opportunity to stress that it cannot be right for the Third world to be sending more money to the World Bank than it is getting from it and that therefore it is important to get new flows to the Third world—perhaps, for example, by increasing the involvement of Japan and Japan's surplus in the World Bank?

Mr. Raison

I hope to meet the president of the World Bank before too long. As I have just said, both the World Bank and the Government are concerned about this problem, and I have outlined some of the additional resources which we believe can and should be made available to the World Bank.

Mr. Bowen Wells

Has my right hon. Friend taken the opportunity to discuss with officials of the World Bank the problem that exists as a result of the debt problem, particularly in Africa, and the fact that the most optimistic forecast by the World Bank is that African countries will be in greater debt at the end of the next decade than they are at present? Is my right hon. Friend planning with the World Bank to make available additional funds on concessionary terms in an effort to solve that problem?

Mr. Raison

We are of course concerned about the problem. Our belief is that the best approach is to focus sums of aid on those countries that are able to make adjustments to their policies so that their economies can be made effective. We shall be very happy to support them.

Mr. Tom Clarke

Is the Minister aware that in its development report 1986 the World Bank referred to the need for an increase in bilateral aid and relief for sub-Sahara? Is the Minister's Department making progress in an effort to achieve those objectives?

Mr. Raison

I am very concerned about finding opportunities in Africa where we can give the kind of aid that will help to produce good results. Almost certainly that means aid that is matched by effective policy reforms.

Mr. Heathcoat-Amory

Before my right hon. Friend authorises additional credit for developing countries, will he examine the extent to which their economic plight has been self-inflicted by years of mismanagement? Will he be very careful not to underwrite mistaken policies or to bail out those who are responsible for them?

Mr. Raison

It is very important to match aid with policies that are likely to prove effective. The encouraging aspect of the special session of the United Nations on Africa that was held in May was that the African countries themselves were prepared to be analytical about their own policies and in some cases their own policy failures.