Heavily Indebted Poor Countries (Hansard, 23 July 1998)

§ 8. Mr. Dennis Canavan (Falkirk, West)
How many representations he has received since 1 May 1997 about the debt problems of the poorest countries in the world. [50494]

§ The Chancellor of the Exchequer (Mr. Gordon Brown)
Since 1 May 1997, the Treasury has received more than 9,000 letters and postcards about third-world debt. In the past year, eight of the poorest indebted countries have moved into the debt reduction process.

§ Mr. Canavan
Although some progress was made at the G8 summit in May, is my right hon. Friend aware of the disappointment at the failure of some of our G8 partners to agree on more positive measures for debt relief? As the International Development Committee report on debt relief was published more than 11 weeks ago, can we expect an early positive response to the Committee's excellent recommendations? Will my right hon. Friend assure us that the Government will step up their efforts to write off the unpayable debts of the world's poorest countries by 2000?

§ Mr. Brown
I assure my hon. Friend that a response has been sent to the Select Committee, outlining a number of initiatives in which the Government are engaged. As a result of the heavily indebted poor countries initiative, Uganda became the first country to receive a debt reduction—it will complete the process this month—by $347 million. Another five countries will have their debt reduced by $3 billion as a result of the negotiations and of the decision points that have been reached. Another two countries are about the reach the decision point, and we are close to agreement on six other countries.
My hon. Friend makes an important point. By the millennium, as a result of the Mauritius mandate, on which Government policy is based, we want all countries to become part of the debt reduction process. That will go hand in hand with the commitment of my right hon. Friend the Secretary of State for International Development to increase overseas aid and the proportion of our national income that is given in overseas aid.

§ Mr. Nigel Evans (Ribble Valley)
What discussions is the right hon. Gentleman having with other European Union financial leaders about how substantial progress can be made towards ensuring that the whole of the EU helps to reduce the debt burden of the poorest countries?

§ Mr. Brown
Much as many hon. Members want the European Union to work in an integrated way on all issues of foreign policy, debt relief works through the Paris club and through pressure in the G7 and other organisations. I think that what the hon. Gentleman wants is what we are trying to do—to persuade our G7 partners to become far more fully involved in the debt reduction process and to persuade countries to reconsider their refusal to sell International Monetary Fund gold. Through our new initiative for post-conflict countries such as Rwanda—which have been burdened not only by huge, unsustainable debts but because they are recovering from war—we can do more as members of the international community to extend the debt reduction process.
A year ago, when we came to power, only one country had finished the decision-making process on debt relief. As a result of international efforts, eight countries have finished that process and another six will soon be at the point of reaching a decision. We must also move forward with the post-conflict countries. I assure the hon. Gentleman that we are not complacent about these matters; we shall try to move other countries that have hitherto done less.

§ Mr. Vernon Coaker (Gedling)
Will my right hon. Friend redouble his efforts to solve some of the debt problems of the poorest countries? I, like many hon. Members, receive many representations from schoolchildren, who absolutely cannot understand why we cannot do something about the terrible pictures that we see on the television. I welcome the progress that has been made, but will he redouble his efforts, so that, when we go to schools, we can talk about the real progress that we are making?

§ Mr. Brown
The Government want poverty to be halved in the future. I assure my hon. Friend that our efforts are designed to ensure that international development aid money goes to the reduction of poverty, to health programmes and to education. We want to avoid 1253 what happened in the 1980s, when much borrowed money financed prestige projects, was wasted on military expenditure and, in some cases, led to the corrupt use of resources.
As we move forward, countries such as Mozambique—where 9 per cent. of the national income was being spent on debt relief but only 4 per cent. was being spent on education and health—are now part of the debt reduction process, which enables money to be spent on the education of children and the health of all people. That is the aim of the Government. I hope that, in the run-up to the millennium, our international millennium initiative will be to ensure that every country is part of the debt reduction process.