HL Deb 03 March 1982 vol 427 cc1290-6

3.14 p.m.

Lord Oramrose to call attention to the deteriorating situation of less developed countries with particular regard to their growing burden of indebtedness, their rapidly increasing population and their inadequate food and energy resources; and the response of Her Majesty's Government to the proposals for the alleviation of these problems put forward in the Brandt Report and in subsequent international conferences; and to move for Papers.

The noble Lord said: My Lords, in moving my Motion my first reflection is a general one—namely, that the quality and nature of human compassion are, to me, extremely puzzling. We respond readily to the personal and to the particular, but when suffering is remote our compassion is much less easily aroused because it is remote. For example, if at this moment it were known that, within the precincts of this Parliament, a three-year old boy called, for example, Johnnie Smith, were in imminent danger of dying and that the reason was that he had not had an adequate meal throughout his life, there would not be a single person in this building who would not rush to his aid, if aid were possible, at considerable sacrifice if need be. But multiply Johnnie Smith by literally hundreds of millions and put him and others thousands of miles away, and all of us I suggest—and I certainly include myself—find it difficult to relate to that problem in the same compassionate way as we readily do when there is a single, identifiable, human tragedy near at hand. The problem on a world scale becomes statistical, impersonal and remote.

The statistics that relate to my Motion are so mind-boggling that it is all too easy to abandon the effort even to understand, let alone to overcome, the problems of massive hunger, disease and homelessness which characterise so much of the southern continents—South-East Asia, Africa and South America. It is at that point, when the mind is overwhelmed by the enormity of the problems that we face, that some people in their individual capacity take refuge in phrases like, "But surely charity begins at home? What is my responsibility here?" It is at that point too that Governments, not least our present Government in this country, become inward looking and conscious of other problems nearer home and start declaring, as has so often been declared, that we must give priority to setting our own house in order. It is the main thrust of what I wish to say today that setting our own house in order and helping to overcome the problems of the third world are closely intertwined and we cannot do the one, we cannot solve our own economic problems, unless we do the other—unless we do all that we can to solve the economic problems of third world countries.

Raising this subject as I do this afternoon I am sad to reflect that, owing to the recent death of our good colleague Lord Ritchie-Calder, we shall very much miss a contribution from him today. He could always illuminate debates on these questions from his vast experience and from his fascinating scientific knowledge. We all regret his passing. I recall how once he quoted aptly from Kipling to illustrate the very psychological dilemma to which I have referred. I think that his quotation is so apt that it is worth repeating. It comes from Kipling's poem entitled" Debits and credits" and it goes like this: Father and mother and me Sister and auntie say, All good people like us are 'we' And everyone else is 'they'. And 'they' live over the sea, While 'we' live over the way But would you believe it, would you believe it They look upon 'we' as another kind of 'they '.". I think that that is the dilemma in which we are so often placed. I suggest that there can be no better text than this quotation for the Brandt Report.

It seems to me that that document's essential message—if one dares to sum up such a comprehensive report in a sentence or so—was that it is no longer valid to regard the economic problems that beset the world as falling into two distinguishable groups: the problems that they suffer over the sea and the problems that we suffer in our developed economies. The point is—and it comes through the Brandt Report—that we are all "we" now. Of course, there are still the rich industrialised countries, on the one hand, and poor countries with largely peasant economies, on the other. I am not suggesting for one moment that that has changed.

But what has changed is the degree to which the problems which afflict the one group of countries are basically the same as those afflicting the other group. Their particular manifestations may differ from one country and from one group of countries to another, but both groups—developed and developing—are threatened by the increasing pressure of population on the world's resources, and particularly its resources of food and energy.

The problems that arise from that pressure are, in the phrase of Brandt, "global problems", and the solutions to them, therefore, must be global solutions too. Indeed, on maturer reflection, I believe that the Motion that I have moved is defective in this respect, because it refers only to: The deteriorating situation of less developed countries". But I suggest that in this debate today we should have broader considerations in mind.

In the last two years since the Brandt Report was published, it is the world economy in general that has markedly deteriorated, giving still greater point to the case for partnership solutions. I have here a quotation from the Sunday Times of two years ago, about the time that the Brandt Report was published. It is a brief and striking catalogue of the woes of the world. It says: What threatens mankind—and it is as large a peril as that —is a lethal and unpredictably volatile mixture of starvation, inflation, escalating unemployment, international monetary disorder, protectionism, major tension between countries competing for energy and food and raw materials, growing world population, advancing deserts, over-fishing, pollution of air and water, and the arms race.". Two things struck me about that list when I read it two years after it was written. First, in every case those problems are worse today than they were two years ago, and in almost every case they are not just problems of the developing countries; they are problems afflicting industrial economies too. Fortunately, we in the West do not suffer the first in that formidable list; we do not suffer from starvation. Nor do we suffer from advancing deserts, unless it be industrial deserts that come to mind from that phrase. But the rest are, indeed, global problems.

They are Britain's problems as well as India's; they are America's problems as well as Africa's; they are Europe's problems as well as those of South America. They are—to repeat some of them—inflation, escalating unemployment, international monetary disorder, competition for energy and food, growing world population, and the arms race. I said just now that these problems, though global, reveal themselves in different ways in different countries. Take the problem referred to in the Motion, the problem of energy. In thinking of that problem go to any African country. My most recent memory of a few years ago is of a journey in Malawi. I remember every day seeing women and children walking up the hillside, several miles a day, seeking bundles of firewood and bringing them hack on their heads. Every bundle that they brought back was from a hillside already largely denuded of trees, and there was the consequent soil erosion to add to the problems of the peasantry. Take another aspect from the developing countries' point of view: go to India and see the round pats of cow dung drying on the walls, being prepared as fuel for the cooking stove. Surely there is no more wasteful habit of fuel in the world than that. Yet it is a practice from which the peasants have no escape and for which they have no alternative. Again, it makes matters worse because it denies the soil the fertiliser it so desperately needs. So we can be sure from these examples that the peasants of Africa and Asia have their fuel crises.

But do not we all? Was not it brought home to us less than a decade ago when the oil producers decided to demand a more realistic price for their oil? —and the price was quadrupled almost, as it seemed, overnight. The consequences that have flowed from that change of policy on the part of the oil producers have massively increased inflation, industrial and commercial depression, rising unemployment, world tension —all those things.

In contemplating the energy crisis that is worldwide, I suggest that we do well to remember that the oil producers—those who now hold such actual and potential power—are themselves almost exclusively developing countries; not just those in the Middle East, but Venezuela, Gabon, Ecuador, Nigeria and Indonesia. They are the members of OPEC and they are learning to use their power, and we do well to remember that and to heed their power.

I think that there are one or two brief passages from the Brandt Report which are worth quoting in this connection. The first comes from page 168 of the document: The greatest dangers facing the world in the short and medium term are supply disruptions, consequential price surges and incompatible national policies. The need to seek an international accommodation has been recognised since the oil crisis of 1973 — the increasing importance of oil in world trade and payments gave them [the oil producers] a growing concern in the functioning of the international monetary and financial systems. All this led them to insist that the problem of energy supplies was only part of the broader problem of restructuring the world economy; and at the same time, along with other nations of the South, they pressed for fairer terms for other commodities, and for a more equitable distribution of the world's resources. These problems are still on the agenda today". By "today" they meant two years ago, and they are still on the agenda today, 3rd March 1982. It is my view that by calling attention, as they did, to the need for an accommodation in oil matters the Brandt Report was simply asking for international common sense, and one day in these matters either common sense will need to prevail or, if not, disaster will.

So much for energy. A problem equally fraught with danger is that of food and the closely related problem of increasing population. I know that my noble friends Lord Houghton and Lord Vernon will be dealing in more detail with this question. I am glad to be associated with them in the work of the British Parliamentary Group on Population and Development. I shall leave that part of the case to them, but I would make only a few points in this connection. First, although it is of the utmost importance, through the work of such organisations as the United Nations' Fund for Population Activities and the International Planned Parenthood Federation, to bring the birthrate down, in the immediate future there is no escape that way from the pressure of population on food, because irrespective of such population programmes, even if the young people already in the world have only two children per family, the world's population will increase by one third by the end of the century, and of course in reality the growth will probably be distinctly more than that.

Therefore, more food is the answer. Here, unfortunately, the trends are not good, because over the last two decades population has been growing at a faster rate than has the production of food. Because all these problems are linked one with the other I would draw attention to two financial consequences from this pressure of population on food, because food prices have risen and have themselves added to the inflationary pressures throughout the world. That is one consequence.

Secondly, ill balanced food supplies increase the balance of payment difficulties of some countries and, once again, as I shall illustrate, we come up against the fact that what we are talking about when we are talking of food problems and balance of payments problems is not just a Third World problem but a problem for all of us. There has been a remarkable polarisation of food supplies in recent years. Before the war the United States was but one of six major grain exporting countries. Today the United States is the only one of major significance. In the late 1940s the United States exported 23 million tonnes of grain. In 1981 it exported 150 million tonnes. Every other region which, as I have said, before the war was an exporting region is now an importer except in the case of Australia.

Moreover we read—and I take this from The Times of 25th February of this year—that the Russians are scouring the world for grain to avert catastrophe following the three bad grain harvests that they have had. As we know, both the Romanians and the Poles owe huge sums of money to western banks and if, as is happening, the Soviets are forced to use their currency reserves for buying grain they cannot use those reserves to bale out their satellites. This means that the lending by western banks has become a precarious situation. We know from history that a default in any one country can easily have a chain reaction and lead to defaults in others.

However, it is not only when western banks look to their East European customers that they need fear for the security of the funds that they lend. If they look southwards, if they look to the developing countries, there is an equally precarious situation for them to consider. According to the Financial Times recently, which was reporting on information in the Amex Bank Review, it was indicated that the situation in 120 developing countries is that their currency reserves are now so low that they allow for only two and a half months of imports, and that, I suggest, is a precarious situation.

Reflecting on such facts, and bearing in mind the rapid increase in recent years of developing countries' indebtedness to private banks by comparison with public institutions—there has been an increase over recent years to something like 40 per cent. of their total indebtedness compared with 20 per cent. as it was about 10 years ago—one cannot but wonder, looking back on the Cancun Conference in Mexico, about the emphasis that President Reagan placed on the need for continued reliance by developing countries on private sources of funds. That was a view that was apparently supported at Cancun by the British Prime Minister.

That brings me to the second part of my Motion, which I shall deal with briefly. It refers to the response of the Government to the Brandt proposals and to the series of conferences which took place during the latter part of last year. To start with, one can recall the negative character of the White Paper which was the Government's direct response in the early months of the discussions about Brandt. One can recall the earlier declaration by the Government about aid policy—it was given in this House by the noble Lord the Foreign Secretary—in which in addition to setting the new emphasis on political, commercial and industrial criteria (I think that was the phrase) that Statement, and we welcomed it, reiterated the Labour Government's declaration that aid should go to the poorest people in the poorest countries.

We welcomed that declaration. Yet, despite that declaration, when we came to the Paris Conference in the middle of last year, it was the British delegation that had to be dragged at the eleventh hour into agreeing that 15 per cent. of aid should be earmarked for the poorest of developing countries. Those who followed that series of conferences last year— Ottawa, Paris, Melbourne and Cancun—must agree that it is fair to say that, when efforts were being made by others, notably the Mexican President and M. Trudeau of Canada, at Cancun to reach an accommodation with the position of developing countries, it was again, throughout that series of conferences, the American and British delegations who were consistently dragging their feet.

When the Government are challenged on these matters, as they have been from time to time in this House and in another place, we get two standard answers. The first I have referred to—that we must give priority to our own economy. The second is, "We are providing £1,000 million and that is a good achievement". It is not a good achievement. The recognised measure of aid performance is that operated by the Development Assistance Committee of OECD as aid expressed as a percentage of GNP, and this country is pledged to aim at the 0.7 per cent. target.

In the years in which the disbursements of aid were determined by the decisions of the Labour Government—1975 to 1979–there was steady progress towards that objective; 0.39, 0.45, 0.47 and 0.51 per cent., steadily upward steps year by year. Then there was a big step down when the present Government came to office: down in one year from 0.51 per cent. to 0.34 per cent., less than the figure at which the Labour Government took over back in 1974. Now still further cuts in aid are planned, making that performance still worse.

I will deal briefly with one important cut that was raised at Question Time today by my noble friend Lord Listowel, the contribution to the funds of the International Development Association. Despite what the Minister said today—and I, in response, quoted the global figures which he had given me—the noble Lord provided me with a Written Answer indicating that whereas we had promised £185 million to IDA, we were in fact releasing only £125 million. That, however it is wrapped up, represents a cut of one-third in the funds of the organisation to which developing countries can turn for loans on favourable terms.

What are the excuses for the cuts? We are told, as I said, that they are made with a view to putting our own economy in order. But surely what this country needs most is markets; and I call the attention of the House to a little-noticed speech by the noble Lord, Lord Walston, in the debate on the Address before Christmas, in which he made some significant suggestions about the link between our unemployment and the possibility of creating markets in the third world. Creating those markets by a series of financial measures not only helps them but provides us with what we need, and that must be the way to apply the criteria which the Government announced; namely, that of our commercial and industrial advantages.

Changing the third world's all too evident demand for goods and services into effective demand is, I agree, a difficult financial problem, and the Brandt Report exercised a good deal of its mind on that question. There is no one answer, and I am not suggesting that it can be done simply by an increase in the aid programme. But a package of proposals such as the Brandt Commission put forward—better access to Western markets for commodities from the third world, particularly processed commodities, more generous aid programmes, increasing the provision of special drawing rights from the IMF and recycling to the developing countries surpluses from oil which the OPEC countries have earned—internationally organised (of course, we can only play our part) is the kind of a programme we need to restore some measure of international stability in a dangerously unstable world.

I therefore conclude with a question to the noble Lord, Lord Trefgarne, who will reply. He said recently—and a similar statement was made in another place—that the Government, in response to the Cancun conference, was setting about helping to organise the United Nations talks on these problems. Well and good, and I only hope they will show themselves more wholeheartedly behind that than they have behind the agendas of the conferences to which I have referred. In particular, I should like to know, in addition to setting up the talks, what they are proposing to do by way of injecting new policies into those talks, for at present our policies are contrary to the interests both of the third world and of our own economy.

Will the Government take a more positive attitude in the United Nations than they have hitherto? Are we seeking to overcome the mood of frustration and despair which was all too evident in last week's conference of developing countries in Delhi? In other words, I am asking the Minister whether we will now be more positive, or shall we once again be seen to be dragging our feet? That is the question on which I hope the Minister can be more forthcoming on this than he has been on previous occasions. My Lords, I beg to move for Papers.