§ 6. Dr. Doug Naysmith (Bristol, North-West)If she will emphasise the link between debt relief and poverty eradication at the spring meetings of the World bank and the IMF. [79108]
§ The Secretary of State for International Development (Clare Short)Yes, the Chancellor of the Exchequer and I have emphasised continually that the purpose of debt relief should be to increase resources for poverty reduction programmes, not to enable countries to take on new contracts, which is sometimes what it is designed to do. We shall be stressing the central 215 importance of poverty reduction in the discussions on debt relief at the spring meetings of the World bank and IMF in a few weeks' time, and are pressing for this linkage to be strengthened as part of the outcome of the current review of the heavily indebted poor countries initiative.
§ Dr. NaysmithI thank my right hon. Friend for that reply. Does she agree that much greater international collaboration is required if these problems are to be solved? Has she been having discussions with other Governments on that?
§ Clare ShortMy hon. Friend is absolutely right. Sometimes, people suppose that the debt that we are talking about is commercial debt, but it is overwhelmingly debt to the World bank, the IMF and export credit departments; and we shall make progress only if we can get international agreement. Since the change of Government, the German Government have adopted a stance supporting deeper and stronger debt relief. We are therefore very hopeful that we shall get agreement, at the forthcoming spring meetings of the World bank and IMF and then of the G8 in Cologne, to get multilateral support for wider and deeper debt relief.
§ Mr. William Cash (Stone)Will the Secretary of State note that the all-party committee for the reduction of third-world debt under the aegis of Jubilee 2000 is extremely grateful for the personal efforts that she has made with respect to the relief of debt in the third world? Will she note that, at 4 o'clock this afternoon, in the Jubilee Room, there will be a meeting, attended by the Secretary-General of the Commonwealth together with the wife of President Museveni, for the purpose of continuing that campaign? Will she also note that an initiative is being taken, the object of which is to obtain the support of all parliamentarians throughout the world to apply increasing pressure in support of the campaign for the reduction of third world debt, which I know that the right hon. Lady is doing a great deal to achieve? We wish her every success in what she is seeking to achieve, and congratulate her on the efforts that she has been making.
§ Clare ShortI am grateful to the hon. Gentleman. Would he consider inviting me to the all-party group?
§ Clare ShortAt the review of the heavily indebted poor countries initiative, we are pushing for a much stronger link between debt relief and poverty reduction. That is very important. We want debt relief, but we want it to benefit Governments who will adopt policies that really benefit the poor; and at the time of decision the support of the hon. Gentleman's group might be very helpful.
§ Ms Julia Drown (South Swindon)Given the World bank's report last week that showed that for every pound given in grant to developing countries in 1998, £13 was paid back in debt relief, and that that compares with £9 in 1996, does my right hon. Friend agree that much more needs to be done to try to relieve the unsustainable debt of some of the poorest countries in this world which are 216 committed to tackling poverty; and does she consider that that should include considering completely writing off the debt of some of those countries?
§ Clare ShortI very much agree with my hon. Friend that there should be more debt relief for the poorest countries that have unsustainable debt and have adopted policies to benefit the poor. Some of the figures that claim that those countries are paying out more on debt than they are receiving in aid are exaggerated, but that is not the main point. The point is to back the reformers and enable them to lift up their poor and create examples of successful development. I strongly support my hon. Friend in that.
§ Mrs. Cheryl Gillan (Chesham and Amersham)I agree with what the Secretary of State has just said, and I know that she would agree that debt relief could undoubtedly be used more effectively as a tool of international development. If a heavily indebted country is prepared to spend effectively on poverty eradication, as opposed to using debt relief to purchase arms and support war; and if, to substantiate that, it is prepared to be independently audited, surely that could be rewarded with more positively phased debt relief.
Would the Secretary of State support the establishment of a new international development auditor, to carry out impartial and rigorous monitoring of budgets, and would she promote that concept at the World bank and IMF meetings later this month?
§ Clare ShortI completely agree with the hon. Lady's objectives, but we already have the type of auditor that she is looking for—it is called the IMF. In addition, the heavily indebted poor countries initiative is linked to a certain absolute requirement, and all these countries are instituting enhanced structural adjustment programmes with the IMF and have to comply with them. We are trying to get those programmes focused more specifically on poverty.
So the hon. Lady's argument is right, but in fact the machinery is already in place. We do not need a new structure. We need to focus the structure that we have much more sharply on the link with poverty.