HC Deb 22 July 1996 vol 282 cc14-5
32. Mr. Spearing

To ask the Secretary of State for Foreign and Commonwealth Affairs what consultations he has had with the United Kingdom representatives on the board of the World bank concerning its policies for financing development projects in the third world. [36783]

Mr. Hanley

My right hon. and noble Friend the Minister for Overseas Development, who is also the UK alternate governor for the World bank, and her officials have frequent consultations with the United Kingdom executive director and his office.

Mr. Spearing

Does the Minister recall that, four weeks ago today, I inquired about the policies of the International Monetary Fund in respect of comparable investments? He kindly said that he would make inquiries, particularly with regard to the prejudicial effect of any of the IMF's conditions on Rwanda and former Yugoslavia that may lead to a stoking up of strife in those areas. If such allegations by the debt crisis network have any substance, will representations be made not only to our representative on the IMF, but to the World Bank on comparable activities in that organisation?

Mr. Hanley

I am grateful to the hon. Gentleman for sending me the two appendices to which we referred the last time we discussed the issue. I read them and I have replied to him in a letter which he may by now have received. I have put a copy, as I pledged, in the Library. The G7 summit in Lyon at the end of June was a further step in the process of reaching agreement on the multilateral debt initiative. A copy of the communiqué has also been placed in the Library. We hope that final agreement can be reached at the World bank-International Monetary Fund meeting in October. We are working hard with our partners to that end. The British Government have written off the aid debts of 31 of the world's poorest countries, with a value of more than £1.2 billion. All our aid is now on grant terms. We are taking the lead in pressing for solutions to the debt burden of the poorest countries.

Sir John Stanley

Is my right hon. Friend aware of the World bank's valuable initiative to make a line of $200 million available for micro-loans to be targeted on the poorest of the world's poor? Given the critical importance to the very poorest of access to credit, will he give serious positive consideration to launching a similar initiative in the context of the British Government's bilateral aid programme?

Mr. Hanley

Again, my right hon. Friend is right. I am delighted that the World bank has offered $500 million from its net income this year as its contribution to the multilateral debt initiative, with the prospect of substantially more in succeeding years. The IMF and the World bank have identified some eight to 20 countries as candidates for the initiative, which applies only to highly indebted, poor countries that have demonstrated commitment to economic reform.

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