HL Deb 12 December 1961 vol 236 cc226-7

2.42 p.m.


My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.

[The Question was as follows:

To ask Her Majesty's Government (1) whether a total of 15,300,000 dollars has now been granted to Formosa by the International Development Association since November 8, 1960, and generally how this sum has been expended and (2) whether the International Development Association has recently granted a credit of 5 million dollars, to assist the development of private industry in Formosa under the current four-year plan, and in what particular manner this credit is to be expended.]


My Lords, the International Development Association has approved four development credits to a total of 15.3 million dollars to the Formosan authorities in recent months. The first three of these were for a ground water scheme, for harbour dredging and for the Taipei Regional Water Supply project. The fourth was a credit of 5 million dollars made in the first instance to the Formosan authorities but for on-lending to the China Development Corporation; its purpose is to assist in financing the foreign exchange cost of the establishment and expansion of private industrial enterprises.


My Lords, while thanking the noble Earl for his Answer, may I ask whether he is aware that the refugee Government of Chiang Kai-shek on Formosa is under American protection by the 1954 Mutual Security Pact, and is heavily subsidised by America, American economic aid exceeding 550 million dollars between 1951 and 1957?

And is he further aware that the United Kingdom has no diplomatic relations with Formosa? In all these circumstances, is it not quite astonishing—indeed, incredible—that the British taxpayer should be compelled through the International Development Association to contribute, even to the smallest degree, to the economic aid of Formosa, and particularly to the development of private industry on the island?


No, my Lords; I would not think that this is at all an odd situation, given the fact of Formosan membership of the International Development Association and of the International Bank for Reconstruction and Development. Given that fact, Her Majesty's Government took the view that the circumstances did not require our executive director to depart from the generally observed practice in both these institutions, of voting according to the economic merits of the proposal under consideration.


In taking that view, had he any regard at all to the special circumstances which I have related in my Question, and to the fact that the American Government heavily subsidises the Formosan authorities?


My Lords, I think this decision was taken having regard to all the circumstances, including the fact that the gross national product in Formosa amounts to about £40 per annum per head. It is therefore an underdeveloped country and perfectly eligible for assistance of this kind from an international organisation.


My Lords, the noble Earl said in his Answer that the grant had been made for dredging in connection with a harbour. Am I to take it that that harbour is not a naval harbour used by the Formosan navy in its various naval operations?


My Lords, I think I should need notice of that particular question. I have not the precise details.


My Lords, in view of the statement by the noble Earl that Formosa is a member of the International Bank, does she become a member because she is occupying the China seat at the United Nations?


My Lords, I think the question of Chinese membership of international organisations would be far better directed to my noble friend the Foreign Secretary.