Tanzania: Aid (Hansard, 19 March 1986)

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

§ Baroness Young
My Lords, there is no new policy on aid to Tanzania. We have told the Tanzanian Government that we are ready to provide balance-of-payments support once economic reforms are in place along lines advocated by the International Monetary Fund and the World Bank. Meanwhile, we are continuing to provide modest capital aid to maintain recently completed major projects such as the Songea-Makambako Road and for certain other rural 966 development and health projects. We also maintain a significant programme of technical co-operation for English language training, for the universities and for the Tanzania Harbour Authority.

§ Lord Hatch of Lusby
My Lords, is the noble Baroness aware that it has been reported that when her honourable friend the Minister of State visited East Africa she said that no further British aid would be forthcoming for Tanzania until Tanzania had agreed to the IMF conditions? Is that the policy of Her Majesty's Government, or was that misreporting?

§ Baroness Young
My Lords, my honourable friend Mrs. Chalker was reported as saying that we would give no more aid until Tanzania agreed with the IMF. We are not offering aid, except where it is needed to ensure that existing projects remain effective, such as providing for road maintenance. Further aid must depend on an economic climate in which we could expect it to bring real benefits.

Lord Oram
My Lords, does not the first Answer of the noble Baroness indicate that there is considerable linking between the provision of aid to Tanzania and their performance in relation to IMF proposals? Is it not wrong that we should be appearing to administer our aid programme almost as the agents of the IMF, because has not that organisation already imposed deflation on quite a number of economies in the third world and thereby substantially contributed to the global slump?

§ Baroness Young
My Lords, the reason for the original Answer I gave is that we believe that Tanzania should conform to the principles laid down by the IMF and if they did not do so the benefits of any aid would be short-lived and largely wasted. There is need for a structural adjustment. Aid that allows developing countries to delay making reforms that are necessary can in fact do more harm than good.

§ Lord Harmar-Nicholls
My Lords, if it is clear that any aid we give will not take into account how the recipient country reacts to the recommendations of the IMF, would that not be tantamount to undermining IMF influence and suggestions?

§ Baroness Young
My Lords, yes; that indeed was the point that I was making. The aid that we are giving is in support of specific projects to which we have already contributed to make quite sure that they remain effective, but at the same time we hope that Tanzania will accede to the requests of the IMF.

§ Lord Hatch of Lusby
My Lords, is the noble Baroness not aware that there has been widespread criticism of the policies imposed by the IMF in many third world countries over the past few years? There have been criticisms from all sides, as my noble friend has pointed out, because those policies have led to deflation and to a reduction in the standard of living of third world countries and contributed to the world depression. Does the noble Baroness not agree that Tanzania is a shining example in Africa of a country that has concentrated on rural development, which has less corruption in administration than most third 967 world countries have, while at the same time it is suffering from commodity price reductions which are hitting its economy very strongly? Does she agree that Tanzania is one of the countries that Her Majesty's Government wish to assist, but not simply according to the dictates of the IMF?

§ Baroness Young
My Lords, I think that if the noble Lord, Lord Hatch, looks at my original Answer to his Question he will see that I have made it quite plain that we have not cut off aid to Tanzania but that it is being provided in specific instances. Indeed, we are spending £14.5 million on aid to Tanzania in this financial year. That includes £5.8 million on technical co-operation to provide training, teaching and advice. Although we have great sympathy with the economic problems with which Tanzania is faced, we believe that the IMF programmes and World Bank assistance remain central to the task of structural adjustment and economic policy reform, and indeed for restoring economic growth and for the management of its debt problems.

Lord Chelwood
My Lords, how confident can we be that British aid for Tanzania, to which I am in no way opposed, actually reaches the targets for which it is intended? Have there not been great difficulties over that question in the past and can we have some reassurance on it?

§ Baroness Young
My Lords, I think it is precisely for the reason that my noble friend has identified, that there have been difficulties in the past, that the greatest care is taken to try and ensure that the aid that is given reaches the people for whom it is intended.