Third World Debt (Hansard, 7 February 2001)

§ 2. Mr. Jim Dobbin (Heywood and Middleton)
What progress has been made on the eradication of third world debt. [147639]

§ The Secretary of State for International Development (Clare Short)
There are 41 countries that are so poor and indebted that, without exceptional help, they will be unable to escape from their debt overhang, to focus Government spending on poverty reduction and to borrow wisely for sustainable development. In 2000, 22 of those countries qualified for exceptional debt relief totalling more than $50 billion. That will reduce their debts by around two thirds, on average. Of the 13 remaining countries, we hope that as many as four will qualify for relief this year, but many others are affected by conflict, and are unlikely to qualify without making progress in ending that conflict and focusing on the needs of the poor.

§ Mr. Dobbin
Does the Secretary of State agree that, under the present Government, Britain has taken a lead internationally not only in areas of debt reduction, but, more generally, in areas of development? That is because of the Government's increased investment in debt reduction. I believe that that commitment will be on-going. Does she agree that it would be a disaster for development if the Conservative party were to assume power, with its in-built commitment to getting rid of debt reduction and to making cuts—particularly cuts in taxation for the wealthy—which would affect millions of people throughout the world?

§ Clare Short
I am grateful to my hon. Friend. I agree; I am most proud of the record on debt relief, for which people both in Britain and throughout the world have campaigned, but the big change is that the IMF and World Bank now back countries' strategies for their macro-economies, revenues, debt relief and aid to reduce poverty systematically. We led on that; everyone can be proud of the United Kingdom's general effort.
I agree that the Conservative party is talking nonsense economics. Its figures do not add up. It says that it will cut taxes and increase spending—[Interruption.]

§ Mr. Speaker
Order. As I have mentioned before, it is not for the Minister to concern herself with the Opposition's figures. She is here to answer for the Government.

§ Mr. Gary Streeter (South-West Devon)
The right hon. Lady will no doubt be pleased to know that, now that we have identified £8 billion worth of savings, not a single penny will come from the Department for International Development's budget. I am glad that she raised the matter.
The right hon. Lady will remember that, in March 1999, I raised with her the issue of debt relief for Nigeria. What progress has the international community made in enabling Nigeria to qualify for debt relief? It is, after all, a country of 120 million people, with £30 billion of debt overhang, racked up by a military dictator who has now gone. Is that not an example of where the heavily indebted 912 poorest countries initiative is too slow and bureaucratic? What is she doing to ensure that Nigeria qualifies for some debt relief?

§ Clare Short
I remind the House of the Tory record on development assistance. [HON. MEMBERS: "No!"] I am simply trying to answer the question. We inherited a shrinking aid budget. We have reversed the cuts. I do not believe that the Tories can cut taxes and protect the aid budget: the arithmetic just does not add up.
Nigeria is not an HIPC country. Because it is an oil producer, it is enjoying a big increase in revenues; but it has been dreadfully run under the military dictatorship. Poverty is very great. Major reform is needed, so that its resources can be used beneficially for its people. It has a debt rescheduling agreement with the Paris club. The delay now in Nigeria is in economic reform; it is desperately important that it should reform. It is a big country. Its president has fine motives, but there has been no economic reform as yet, which is very worrying.

§ Mr. Streeter
I find the Secretary of State's answer very complacent and worrying. If she is not prepared to take effective action on debt relief in Nigeria, will she at least take effective action to ensure that the new Nigerian Government can recover funds that were illegally stashed away by outgoing President Abacha? Several other countries are taking effective action to ensure that those stolen funds are recovered. Why are not the British Government taking effective action to help the poor people of Nigeria?
By the way, in our policy document, which was launched this morning, a copy of which I will send to the Secretary of State, we make it clear that there will be no cuts in a Conservative aid budget.

§ Clare Short
Every time the hon. Gentleman gets up, he shows his ignorance—so I do not know what will be in that document. For Nigeria to prosper, its oil resources, which have been ripped off by a corrupt elite, thus distorting the country's whole economy, need to be deployed to benefit the people. Debt relief from outside, when Nigeria will not refocus its own resources, would not help the people of Nigeria. The policy that he advocates is foolish and not in the interests of the poor of Nigeria. He should look more closely at the documents that my Department publishes—he might learn something.