Developing Countries: Economic Aid (Hansard, 23 April 1991)

§ Lord Reay
My Lords, all British aid is designed to promote sustainable economic and social development while taking account of environmental considerations. We are providing special help to developing countries to tackle global environmental problems such as climate change. Last November the Government announced a new public expenditure survey sub-programme separate from the aid budget for developing countries on global environmental assistance. From this we are contributing £40 million to the global environment facility jointly managed by the World Bank, the United Nations environment programme and the United Nations development programme, and about £8 million to the fund established under the Montreal Protocol to help developing countries phase out ozone depleting substances.

§ Lord Hatch of Lusby
My Lords, I thank the noble Lord for that constructive Answer. Are the Government now preparing for next year's Rio conference where this will be a central issue? If so, what line do they propose to take at that conference in light of the proposal that a special fund should be set up to help developing countries to develop without damaging the environment?
In this very significant area—perhaps the most important of the next 50 years—will the Government consider setting up a working party of members of the Department of the Environment, the Overseas Development Administration, the Department of Trade and Industry and other experts, including those in this House, to prepare a specific policy to place before the Rio conference in its attempts to solve the problem?

§ Lord Reay
My Lords, the sub-programme to which I referred, which is a new budget line, is managed by the ODA and will be used for Britain's contribution to the global environment facility. We believe that that facility fully meets the needs for new mechanisms to help developing countries. It should become the funding mechanism under the proposed conventions on climate change and biodiversity which are currently being prepared for signature at the conference in Rio to which the noble Lord referred and at which we hope to play a full part.

§ Lord Gibson-Watt
My Lords, does my noble friend agree that with regard to the environment one of the most important ways that this country helps developing countries at present is through the secondment of people from the Forestry Commission and other agricultural organisations to encourage forestry and agricultural matters in those countries?

§ Lord Reay
My Lords, I entirely agree with my noble friend that our encouragement of forestry is an important part of our aid programme. There are major and growing overseas development aid programmes in the forestry field. For example, in October 1988 the ODA was financing about 80 forestry projects at an aid programme cost of £45 million. In early 1991 the ODA had ongoing, or in preparation, over 200 forestry projects at an estimated aid programme cost of £160 million.

§ Lord Cledwyn of Penrhos
My Lords, are not the main culprits the countries of the developed world? Can the noble Lord say what specific steps are being taken in this country to develop clean technology? While I agree with what my noble friend said about the importance of the Rio de Janeiro conference next year, will there not shortly be a conference between EC Foreign Ministers and the Foreign Ministers of South America? Is this subject on the agenda for that meeting?

§ Lord Reay
My Lords, I do not have the agenda to which the noble Lord the Leader of the Opposition refers. I shall look into the matter and let him know.
Technology transfer is an important factor in helping developing countries to tackle their environmental problems. We believe that the commercial mechanisms are the best route for the safe and effective transfer of that technology.

§ Lord Hylton
My Lords, do the Government agree that one of the best ways of helping developing countries is by reducing their burden of debt, much of it incurred when economic conditions were different and commodity prices a good deal higher? Are they following the admirable lead set by the right honourable gentleman, Mr. Lawson?

§ Lord Reay
My Lords, the noble Lord is quite right. Britain has taken the lead in international debt relief efforts, in particular for the poorest countries which are pursuing economic reforms. At last year's Commonwealth Finance Ministers' meeting in Trinidad my right honourable friend the Prime Minister, who was then Chancellor of the Exchequer, proposed that the Paris Club should reduce by two-thirds the bilateral debt of those countries. We are working for early agreement to that proposal which could lead to a reduction of some 18 billion dollars in the debt of the poorest countries.

§ Lord Peston
My Lords, did the Minister say that it is the Government's view that commercial considerations should be dominant in considering the development of these technologies? Is he not aware that the most fundamental proposition in the economics of the environment is that that is the one area in which commercial considerations cannot possibly do the right job? It is in no one's commercial interest not to pollute the atmosphere and therefore governments must involve themselves in such matters.

§ Lord Reay
My Lords, that is an over-simplified view. I was referring to the transfer of technology and in countries such as ours the major companies develop 137 and own such technologies. Only if the property rights are respected can the transfer of technology be encouraged.

§ Lord Ezra
My Lords, is the Minister aware that recently the Department of Trade and Industry held a symposium on this subject? It was most impressive and showed the progress that has been made by British firms to develop suitable technologies and equipment for dealing with the environmental problem s. Is the Minister further aware that the main issue is to stimulate the export and transfer of such technologies to the countries which need them?

§ Lord Reay
My Lords, I am pleased to hear that. It appears to answer the noble Lord opposite.

§ The Earl of Shannon
My Lords, in Eastern European countries approximately one-third of the locally produced food is lost between harvest and consumption. In developing countries the amount is about two-thirds. Therefore, is it not more appropriate that the Government should channel aid into transferring technology on packaging and transport? That would considerably increase the local food supply without causing damage to the environment. One notes that from the recorded aid given to, say, Czechoslovakia, it is spent on banks, macro-economics, the training of the federal Minister of Economy and so forth. Does the Minister agree that aid given to keep the food that is grown might be more helpful?

§ Lord Reay
My Lords, I am not an expert on the subject raised by the noble Lord. However, I am happy to take on board his point and pass it on to my honourable friend.

§ Lord Dean of Beswick
My Lords, other than food, the biggest necessity for developing countries is an adequate energy supply. Bearing that in mind, from where do the Government believe that necessity will come, given the increasing world population, without further polluting the atmosphere?

§ Lord Reay
My Lords, as countries develop they will need to use more energy which could add to global environmental problems such as climate change. There is a need to promote further energy efficiency and conservation so that their development may continue unimpaired without unnecessarily adding to the global environmental damage. The ODA supports projects to promote energy efficiency and conservation in developing countries and intends to continue to do so.

Lord Hunt
My Lords, what support have the Government given to intermediate technology; that is, the designing of equipment which is simple to make locally? People in the third world can use that without the expense and environmentally damaging effect of heavy equipment imported from other countries.

§ Lord Reay
My Lords, the noble Lord has made a good point that has been taken on board by the ODA.

§ Lord Hatch of Lusby
My Lords, I too was disappointed to hear the Minister's comment about 138 reliance on market forces. Is he aware that the present chairman of his party, Mr. Chris Patten, when he was Minister of State for the Environment said that this is one of the areas in which market forces are not sufficient and in which intervention is essential if disaster is not to follow? Does the Minister accept that this form of intervention and supportive intervention through the DTI could assist in the export of many environmentally friendly technologies which have been developed in this country? That would assist trade in this country while at the same time help to avert the disaster which will arise if the developing countries are not assisted to do so without damaging the environment.

§ Lord Reay
My Lords, I had hoped that I had made plain in my original Answer the fact that we are doing a great deal to encourage development while at the same time encouraging protection of the world environment.