International Development Association: Finance (Hansard, 15 December 1983)

§ Lord Hatch of Lusby
My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

§ The Minister of State, Foreign and Commonwealth Office (Baroness Young)
My Lords, the resources of the International Development Association are secure up to the end of June 1984, under the special funding arrangements for the current fiscal year which have been agreed by all donor countries except the United States of America. Thereafter, the seventh replenishment of IDA's resources should become effective. That would provide the association with funds for a further three years, until 30th June 1987.
Negotiations are continuing on the overall size of IDA 7, as well as on individual donors' shares. We are anxious that these should be concluded soon to allow the replenishment to take effect from 1st July.

§ Lord Hatch of Lusby
My Lords, is the noble Baroness aware that this gives me a very rare opportunity of congratulating the Government on their policy and leadership in the issue of overseas aid, although one would still say it is far too low? May I ask the Minister two specific questions regarding the IDA? Can she say anything about the meeting which is taking place today, I understand, between Britain, Japan, West Germany and France, to try to help the situation, or is this too early? If it is too early, will she make a satement next week after the meeting? Secondly, what influence is the British Government bringing to bear on the United States Government to give the IDA the money it requires to carry out its invaluable task after June 1984?

§ Baroness Young
My Lords, I thank the noble Lord for his kind remarks and I thank him in the spirit in which they were given. The answer to his first supplementary question is that the meeting in Paris is a consultation between IDA management and several major donors concerning what would be their shares of a United States 12 billion dollars IDA 7 assuming a United States share of 25 per cent. The total of 12 billion dollars is the target which all donors other than 350 the United States thought appropriate in the circumstances when the replenishment was discussed by the UDA deputies in Paris last week.
On his second question as to what the Government are doing about this possible shortfall. I can confirm that all donors other than the United States have made known their view that the target for the next replenishment should be 12 billion US dollars rather than the 9 billion dollars implied by the limit which the US Government have currently placed on their contribution.

Viscount St. Davids
My Lords, will the noble Baroness confirm that this is a happy and rare occasion on which the words of the Paper actually say what is meant? The financial difficulties of the International Development Association have indeed been anticipated rather than merely expected, which is what the words are usually used to mean. In this case they are really being used in their proper sense.

§ Lord Taylor of Gryfe
My Lords, would the Minister agree that fundamental to the success of this excellent organisation is the contribution of the United States, since the United States has always been the major contributor? Would she stress to the United States Government that expediture of aid in this direction is frequently more important than purely military intervention in combating communism in the third world?

§ Baroness Young
My Lords, we and other donors have made clear our view that a replenishment of 9 billion United States dollars based on a United States contribution of 750 million dollars a year would be an inadequate response to the needs of the world's poorest countries.

Lord Oram
My Lords, does the Minister recall that the Prime Minister has said that at the recent Commonwealth conference she was asked to make a special personal effort to ensure an adequate replenishment of IDA finances? Furthermore, has not the Prime Minister agreed to send a message to President Reagan, as Chancellor Kohl of West Germany has done, urging that the United States should not reduce its contribution in the way that it has threatened? Can the Minister say whether the Prime Minister has taken such action, and with what effect? May I further ask what action the British delegation will take at the meeting in Washington on 11th January—which, I think, will be the conclusive meeting on these matters—to ensure that the gap is filled if the United States does what it has threatened to do?

§ Baroness Young
My Lords, I should like to make plain that we have made our views on this matter clear to the United States Government. I do not think that I can add anything further at this point. On the question of what would happen if there is a gap, I would point out that we are ready to play our part in a replenishment of up to 12 billion dollars on the basis of fair burden-sharing among the donors. But that has always presumed an increase in the United States Government's offer in this matter.

§ Lord Bauer
My Lords, will the Government consider substantial cuts in our taxpayers' contribution to the IDA? I ask that question in view of the lack of any effective parliamentary control over this form of aid, which may help to explain the numerous anomalies in regard to what it does.

§ Baroness Young
My Lords, I am well aware of my noble friend's views on this matter, since he has previously expressed them in your Lordships' House. But I think that I ought to say that we have agreed that our contribution to IDA 7 would be at a level that could be justified by reference to our relative economic strength.