Overseas Aid

HL Deb 15 June 1994 vol 555 cc1699-749

3.8 p.m.

Lord Judd rose to call attention to the overseas aid and development policies of Her Majesty's Government in the light of the growing needs of the third world; and to move for Papers.

The noble Lord said: My Lords, this debate takes place against the background of disturbing contrasts. On the one hand, there is the excitement and hope of the new democracies in South Africa and Malawi; on the other, there is the sickening nightmare of Rwanda, with genocide on a scale that we have not seen since the killing fields of Cambodia.

In South Africa, after decades of racial oppression, there is now the challenge to work effectively with the courageous leadership of that country in achieving the responsible objectives set for housing, education, health, land and employment and for which the £100 million so far promised from our own aid programme —considerably less than half of what has been found for just one highly questionable dam in Malaysia, Pergau —is for many of us a disappointingly minimal start. In the Middle East, Gaza and Jericho have already indicated how a bright new dawn can be jeopardised by lack of sufficient practical international backing.

In the third world as a whole during the past 40 years, the number of children dying before the age of five has fallen from 28 per 100 to 10. In the past 30 years, the percentage of children enrolled in primary schools has risen from 48 per cent. to 78 per cent. In the past 20 years, life expectancy has increased from 53 to 62. In the past 10 years, the percentage of families with access to safe drinking water has risen from 38 per cent. to 68 per cent. is South East Asia, from 66 per cent. to 78 per cent. in Latin America and from 32 per cent. to 43 per cent in Africa. All that demonstrates what can be done. Yet every year an additional 26 million people—equivalent to almost half the population of the United Kingdom —are still falling into the cesspit of absolute poverty.

Add to that the escalating environmental crisis worldwide, with 70 major international disasters in the 1980s as compared with only 16 in the 1960s, or the prediction that there may well be 100 million refugees and displaced people in the world by the end of the decade, and where in such statistics is there any hope of a stable, decent and secure future for our grandchildren? Of course, there is a major population crisis. No sane Member of this House could possibly deny that. But there is also a consumption crisis, with 80 per cent. of the world's resources being consumed by 25 per cent. of the world's population. We need more effective population policies, but such policies depend upon adequately resourced health, education, gender and other social policies. We need sound sustainable environmental policies, but those policies depend upon greater equity and justice in the distribution of resources and upon the transfer of technology from the industrialised world to the developing world.

What of our United Kingdom response? In replies to Parliamentary Questions, the Government still sub-scribe to the modest UN target of 0.7 per cent. of gross national product for overseas aid expenditure. But, it must be said, they also staunchly refuse to set a timetable for achieving it. Worse, they move disastrously in the opposite direction. From more than 0.5 per cent. of gross national product in 1979, the UK has come down to little more than 0.3 per cent., and it is predicted on the Government's own figures to fall still further to 0.26 per cent. by 1995–96. If the Government are genuinely committed to reaching the UN target, they should obviously timetable a planned expansion of the aid budget to achieve it.

Then what of the division of the aid budget that there is? Some is spent multilaterally and some bilaterally. But by what rational criteria are the funds apportioned? On the one hand, we have the expertise, the experience, the dedication and the professionalism of our own ODA personnel —no mean accumulation. But, on the other hand, we have the powerful case for a co-ordinated, multilateral approach, avoiding confusion imposed upon struggling administrations in the third world as they endeavour to cope with uncoordinated and, frankly on occasion, competing inputs. Surely the objective should be to use our perhaps unrivalled expertise to ensure that bilateral and multilateral aid is never in competition but always well co-ordinated, complemen-tary and, above all, effective and accountable.

Despite all the past assurances that there would be no robbing Peter to pay Paul and that aid to Eastern Europe and the former Soviet Union would be additional and not at the expense of the third world, we now—all too predictably—have one budget, one pot, for the two purposes. Frankly, the additionality is conspicuous by its absence. The amount of aid going to the former Communist world is planned to rise from £188 million in 1992–93 to £331 million by 1995–96. How far will that trend be allowed to go? What will be the eventual cost to the third world?

At present, 66.7 per cent. of British aid is tied to the purchase of British goods and services. We on these Benches would never suggest that all tied aid is bad per se; indeed, that would be absurd. If Britain can combine genuinely assisting the third world with promoting British industry and jobs, so much the better. The difficulty lies in the inherent conflict of interests which can too easily arise between commercial and economically and developmentally sound priorities.

The tying of aid can result in developing countries paying prices above the market rate because of lack of competition. Recent estimates suggest an average of 15 per cent. It also leads to the purchase of inappropriate goods dependent upon availability in the donor country, rather than what may really be needed for sustainable development. Aid tying can also hold back the development of a range of industries in the developing countries themselves. Improving the quality of commercial aid—so that, unlike Pergau, it is always primarily justified on convincing developmental grounds—will bring enhanced value for money to the British taxpayer as well as having a greater impact in reducing poverty.

Sometimes, even on the same day, I receive a number of press releases from the ODA about the aid that it is distributing. The Minister works herself commendably hard in her national and international travel programme, speaking about her latest concerns. But a speech here and a press release there is not enough. The ODA is central to the future of humanity. Many of our domestic preoccupations fade into relative insignificance against the crucial issues; in fact, the very survival of humanity with which the Minister has regularly to deal. Yet we still have too little sense of collective government strategy—of how they see the coming together of Treasury policy, environment policy, defence, trade, agriculture and the rest with aid; of what should be the strategic interrelationship between, on the one hand, the private and particularly effective voluntary sectors and, on the other, the government programmes; and of what should be the right balance between bilateral and multilateral commitments.

Why all the plethora of White Papers on tactical domestic issues but none on the absolutely fundamental issue of the UK's strategy for global survival, let alone development? It is 19 years since we last saw a comprehensive White Paper on ODA matters. That, it must be said, was produced under a Labour Government.

In its recent outstanding human development report, to which my noble friend Lord Desai has made an important contribution—and I look forward to hearing from him in the debate—the UNDP has suggested that industrialised countries should enter a 20–20 compact with developing countries whereby 20 per cent. of their aid budgets will be committed to human development priorities such as health and education on condition that recipient countries put 20 per cent. of their budgets to the same priorities. The UNDP estimates that currently most donor countries spend only 7 per cent. of their aid budgets on such human development priorities. It calculates that the figure for the UK is 6.6 per cent. Does the Minister endorse the UNDP proposal? How would she reorientate the existing aid budget to accommodate it?

Trade flows, which dwarf aid in developmental significance, fall under the DTI. Political comment on the conclusions of the latest GATT round has tended to concentrate on the benefits to Britain resulting from the expansion of world trade. But what of the significance of GATT in terms of global, sustainable development? Sub-Saharan Africa alone, home to 300 million people barely existing in absolute poverty, is likely to lose £1.7 billion a year, while countries of the European Union, whose citizens on average enjoy incomes 37 times as large, are expected to gain £40.8 billion per year. That is mainly due to a loss of preferential export agreements with the European Union. How do the Government reconcile that injustice with their development priorities?

Meanwhile, debt remains a Treasury responsibility. The Prime Minister likes to recall the lead which he indeed gave to the Group of 7 with the Trinidad terms initiative on bilateral debt. But that initiative will do little to help countries like Uganda which owe over 60 per cent. of their debt to multilateral institutions—debt which the standard Treasury line insists cannot be considered for rescheduling or cancellation. Instead, Uganda is compelled to ask donors for still more bilateral aid to make repayments on debts to multilateral institutions. As a member of those institutions, we are in effect giving with one hand and taking away with the other. How does the Minister intend to break that vicious circle?

In 1992, the developing countries repaid £100 billion in interest on their debts; that is well over twice the amount that they received in aid. Between 1988 and 1992, it is true that OECD countries—of which we are one—cancelled £6.6 billion worth of debt, but they received £318 billion in debt repayments; in other words, 48 times as much. Where does the development priority begin to be in that situation?

Nowhere is the need for policy co-ordination greater than in our response to conflict resolution. The resources devoted to such work and to pre-emptive diplomacy are pitifully small. We agonise over the additional resources needed by the United Nations High Commissioner for Refugees, but we spend less than peanuts on preventing the crises that lead to the pressures on UNHCR.

ODA expenditure on emergencies has increased five-fold since 1987, inevitably diverting funds from long-term development. In Angola, Somalia, Bosnia and Rwanda the world has been confronted with the dual requirements of humanitarian relief and military intervention. In each case the United Nations has been criticised, but surely it is the member states, especially the permanent five members of the Security Council, who should accept the responsibility. The UN has no separate existence from its member states. In the case of Rwanda it was after all—and we must never forget it —the Security Council which took the shameful decision, now belatedly reversed after God knows how many have been slain, to reduce the UN presence at the outset of the current crisis. No UN force could possibly have stopped all the killing, but a strengthened force could have offered protection to groups of civilians seeking refuge in safe areas.

When tragedy occurs on such a horrific scale it may be that it takes a little while for the sheer awfulness of the situation to sink in. But that such disregard for humanity can happen diminishes the humanity in us all. It demands that we face up to unpalatable truths, for example that 86 per cent. of the world's arms are supplied by the permanent five members of the Security Council; the fact that two-thirds of these are sold to the poorest countries of the world; and the fact that the United Kingdom continues to sell arms to countries whose citizens live in abject poverty and gives aid to countries with high military expenditure. Similarly, we must face the issues of international crime, corruption, Swiss bank accounts and the indispensability of integrity in government and public service of both donors and recipients alike.

This year sees the 50th anniversary of the Bretton Woods institutions—the World Bank and the IMF. Next year sees the 50th anniversary of the United Nations itself. All of these institutions were born of a vision of a new world order in the aftermath of World War II. But the security issues which confront us today are not the same as those of 1945. A relevant Security Council will be more representative and one dedicated to arbitration, conflict resolution and pre-emptive diplomacy; but it will also be one with a key strategic role to play in policy formulation on the economic and environmental challenges to world security.

Far from a new world order, we are experiencing a new world disorder. The time for a comprehensive review of our national policies and our international institutions is long overdue. Such a review would enable us to develop a global strategy for meeting the destabilising humanitarian challenges of hunger, disease, poverty and conflict. It would help us to take seriously the very survival of humanity on our crowded, overstressed and tiny globe as it vulnerably hurtles through the intimidating vastness of space. I beg to move for Papers.

3.23 p.m.

Lord Redesdale

My Lords, I must thank the noble Lord, Lord Judd, for initiating this debate this afternoon. I hope he will forgive me if I do not make such a full speech as he made and limit myself to sub-Saharan Africa. I would particularly like to talk about sub-Saharan Africa as I recently had the privilege of visiting that area to monitor the elections in South Africa and Malawi.

I have to admit that I went to South Africa with a degree of trepidation knowing that the group that I was with—the Awepa delegation—which also included my noble friend Lord Tordoff, had been assigned to Natal and KwaZulu. It was suggested to me on a number of occasions in this House that I should take a bullet-proof jacket with me when I visited that area. However, it turned out that my fears were unnecessary as the Inkatha Freedom Party joined the election just in time. The elections themselves were peaceful. In fact one of my abiding memories of the election was of arriving in the Ndeleni township, which is known for its violence, at six o'clock in the morning for the opening of the polling station at seven o'clock and finding 1,000 people queuing quietly and waiting to vote. Many of them had walked 10 miles to get there and many of them had walked through the night.

I also wish to mention the election that I then attended in Malawi as an observer. The way in which that election was carried out was immensely impressive. It was carried out efficiently. However, I have a story that I wish to share with the House which may illustrate some of the lessons that we could learn from Malawi. I turned up at one polling station to find that the voters had divided themselves into two queues, one for women and one for men. We intended to discuss this matter with the presiding officer and as we walked to the polling station an old man said to me, "I am glad that you are here to help us". I thought that he was referring to our helping them with the election, but when we reached the front of the queue it turned out that he meant that he was glad that we were there to help the men vote as the women had quite happily blocked the doorway and were all voting first.

I now wish to discuss one of the major problems that is facing sub-Saharan Africa. Although there has been a peaceful transition to democracy in southern Africa and the peaceful manner in which this was done shows that there is a great desire for democracy, the new democracies that are coming into existence in much of southern Africa face a crippling legacy from the past; that is, debt. As the UN Secretary-General has pointed out, External debt is a millstone around the neck of Africa. Easing the continent's debt burden must be a priority for the international community". If this problem is not addressed in such a way that African countries are able to pay, development in Africa will fail to materialise. While there has been an improvement in the economic situation in the developing countries, particularly in Asia and Latin America, the position in sub-Saharan Africa has deteriorated. One of the major reasons for this is the inability of sub-Saharan Africa to service its debt repayments. The scale of the problem can be shown by the amount disbursed by Africa between 1985 and 1992–81.6 billion US dollars to repay debt. To show the effect that this has had on social expenditure, one can cite the case of Tanzania. Since the mid-1980s interest payments on debt have absorbed a greater share of that government's budget than either health or education. Indeed, according to the World Bank debt tables, during the 1980s the region's debt increased from the equivalent of 28 per cent. of its GNP to 109 per cent. in the early 1990s.

Extensive default on Africa's debt has been prevented only by repeated rescheduling operations, in which official creditors, meeting in the Paris Club, have allowed interest and future debt charges to accumulate by deferring payments. More than 30 African governments have been forced to reschedule, many of them repeatedly. Paradoxically, however, these rescheduling exercises have fuelled rather than alleviated the debt crisis, by contributing to the unsustainable build-up of arrears. Over 40 per cent. of the non-concessional debt owed by sub-Saharan Africa to the industrialised countries in 1993 represented deferred interest payments capitalised by the Paris Club and added to the total debt stock.

One area of concern that is being increasingly expressed is the high multilateral debt to the World Bank and IMF, as the noble Lord, Lord Judd, pointed out earlier. The argument for the principle of full repayment will have an increasingly negative effect on the African debt burden. If the debt trap in Africa is not addressed in a comprehensive manner, it threatens to destroy any hope of development in the emerging democracies. Democratic governments in Africa which fail to reverse the decline in living standards and to deliver basic health and education services are unlikely to enjoy more than a temporary stay in office. That may mean that the democratic experience is a failure.

It would be churlish of me if I did not congratulate the Minister on the role that she has played in debt relief. I realise that £1.1 billion worth of debt has been forgiven by Britain, and I commend the lead role played by the British Government in the G7 summit in Tokyo last July. I hope that the Minister can give the House some assurance that the British Government will continue to play a lead role in lessening the debt burden, especially in the area of multilateral debt.

3.30 p.m.

Lord Deedes

My Lords, I should like to add my thanks to the noble Lord, Lord Judd, for enabling us to take a look at our policies on aid and development.

I am not sure whether we shall improve those policies unless we recognise one or two mistakes that we have made in the past. Like the noble Lord, Lord Redesdale, I relate my remarks mainly to Africa, where my principal interests lie.

I believe that there have been two main failures so far in our aid policy. First, we in the West have somehow contrived to leave the poorest people in the third world worse off than they were before. Secondly, we seem to be without means for anticipating disaster, whether famine or conflict. We lack an early warning system for situations such as that in Somalia, which has cost the international community something like 2 billion dollars and a sorry lack of face.

Taking the first point, I doubt whether we have yet fully grasped the damage inflicted on Africa and parts of Asia by what we call the Cold War. For much of Africa and Asia the legacy of 45 years of East-West tension was hot Cold War but hot and bloody wars, some of which continue, as in Angola. In my view both East and West treated much of the third world, particularly Africa, as front line agents in an ideological struggle. We judged the ruler, however despotic, by whether he was on our side. If he was on our side we were sometimes all too happy to prop him up with aid with no strings attached and without much regard for the consequences for his own people. That is when the rot set in. That is when some of the aid began to go down rat holes —into follies for the ruler and Mercedes cars for his entourage. That is when, throughout that Cold War, the poorest on earth began to become poorer.

We have survived the Cold War, but it has wrought havoc in Africa and in parts of Asia. Now what do we find? I travel a number of these countries, usually under the auspices of the international aid organisation CARE. In those countries I see a more realistic economic policy taking shape. I see more concern for human rights and democracy. The Cold War over, we find that we can afford concern for the moral dimensions. But nowhere do I see much material improvement in the condition of the poor. In my experience, in many instances it has become worse. As the World Bank applies its economic restructuring, as the economic screws tighten, as food subsidies come off, as welfare services are cut, the poorest suffer most.

On top of that we have revised our policies, as I am sure my noble friend Lady Chalker will tell us later. We have been moving our long-term development assistance from the poorest nations towards those with a better return on investment. That is where dams come in so useful. So be it. I believe that we should invest some of our aid more profitably. But we should not delude ourselves that we are relieving poverty in the third world. If we are going to take the poor more seriously then in my view there will have to be a modest shift in humanitarian aid from the ODA towards some of the voluntary agencies, which work at micro level among the poor on health, education, water, sanitation and above all on helping people to set up on their own.

I find the work of those people in the field impressive —a good deal more impressive and cost effective, bluntly, than some of the UN agencies. I am persuaded that for humanitarian aid we should depend more than we do on some of the non-governmental organisations.

However, aid and development policies are barren in countries where conflict persists. As I have seen in the Sudan, Mozambique and Cambodia, and as we witnessed last year in Somalia and we witness now in Rwanda, conflict reduces aid and development to dust. An urgent task in the world today is to find ways of anticipating and, if possible, averting some of those bloody struggles.

We must learn to read the signs better. Where there is food and economic insecurity, where human rights are being violated, where ethnic or religious minorities are being persecuted, where there are unequal rights to basic services, where there is high military spending, there you will find the likelihood of national breakdown. In my view our aid and development policies should be more closely related to reducing the risk of those symptoms developing. They should be conditional on more equitable economic policies. They should positively encourage local communities to take more responsibility for their own lives. And they should encourage cohesive rather than divisive policies. They should weigh on the minds of governments which flout human rights and which persist in the persecution of ethnic minorities.

What we have just witnessed in Rwanda is beyond any doubt genocide. Are those responsible being brought to book? Are we interested in them being brought to book? If we are not we are sending out a terrible message to some of the world's tinpot dictators.

In short, I think that we need a shift in our criteria for aid. We no longer have to buy friends in the Cold War. We are, or we should be, in the business of bringing some order into the wilder reaches of the third world, because that is, above all, what the poor, the oppressed and the persecuted are crying out for.

3.37 p.m.

The Lord Bishop of Lichfield

My Lords, it is difficult to avoid a doom-laden atmosphere when thinking about Africa. I should like to pinpoint my remarks on two African countries where I have lived and worked and with which I am still in close contact —Rwanda and Uganda.

As other speakers have said, it is difficult to find words adequate to describe the tragedy of Rwanda at this time. One estimate suggests that 500,000 people have been ruthlessly slaughtered in the past few months, while many thousands have fled to refugee camps in neighbouring countries. I am sure that all of us have been horrified by the TV pictures of men, women and children macheted to death as they sought refuge in churches and other supposedly safe sites in that country.

I should like to make two points about that country. First, I remind your Lordships of the long-standing and very deep-seated ethnic hatred between Tutsi and Hutu which, I submit, may be of far greater and more durable power than anything that United Nations pre-emptive strikes can accomplish. However much this hatred has been exacerbated, as it has in part in the past by colonial policies, and however much it is exacerbated still by grinding poverty—when there is very little cake, conflict about that little which is available is always exacerbated—that hatred must be recognised.

My wife and I had the privilege of being guardians for some years of a teenage Mututsi boy whose parents had been killed in massacres in Rwanda as long as 30 years ago. Let us just remember that for 30 and more years there has been a refugee problem, with refugees streaming into Uganda and neighbouring territories. Each year my son goes on a work party rebuilding and building new primary schools for Rwandan refugees. No United Nations peace-keeping force can itself heal the problem of the deep-seated ethnic root of that tragic conflict.

I should like to dream a dream. It is the second point on Rwanda. In a recent debate in your Lordships' House on the great future potential of the Commonwealth, reference was made to the vital role of African leaders from within Africa making substantial contributions to the healing of those essentially African conflicts. There has been reference to the trusted personal contacts among government leaders within the Commonwealth. Much was said in your Lordships' debate about the informal usefulness of the Commonwealth, in which people can meet behind scenes and establish trust and new visions. Much was said about the way in which the Commonwealth could become a catalyst for peace-making, in which a Museveni, a Chikane or, dare I add, a Mandela or a Buthelezi, who have deep and long experience of dealing with conflict, could themselves become peace-makers in their own Continent.

In particular, I wish to thank the Minister for the trouble which she personally takes behind the scenes in this field. She recently made time to see the Archbishop of Rwanda at very short notice and the Provincial Secretary of our Anglican Province there. I wish to ask her this. Is it possible that she could gather a team of African leaders who would give a lead with her, and with our long experience, in mediating in essentially African conflicts?

That brings me to some final words about Uganda. We think of the darkness in Africa, but let us just remember for a moment the light. I lived through Amin's Uganda when it was full of killing fields. People were executed below my house each morning. However, under the leadership of President Museveni, Uganda is making splendid progress. Inflation has been reduced from over 200 per cent. to 5 per cent. Economic growth is running at about 5 per cent. per annum. Widespread demobilisation of the armed forces is taking place—that is a key point. The Asians expelled by Amin have now been encouraged to return. In that situation perhaps I may encourage the Minister to continue to give a lead in keeping the Government to the Trinidad terms, and beyond them, as the noble Lord, Lord Judd, said. Far be it from us to give with one hand and to take away with the other.

However, I draw your Lordships' attention to the fact that Uganda's success, brave and strong as it is, is now deeply threatened by a debt of 2.6 billion dollars which drains Uganda of 100 million dollars annually which could be spent on those primary schools and easing tension with the refugee problem from the neighbouring Rwanda. As Museveni said to a recent delegation, money spent on servicing such debts is money which cannot be spent on the needs of health and education in his country. Uganda is struggling on, using one third of its annual budget to service an unpayable debt burden.

I have seen the effectiveness, as many noble Lords have, of our Government's aid to Uganda. I have seen our ODA technical co-operation officers—paediatricians and consultant surgeons—teaching young African doctors in the African medical schools. Never let us back-track on that. I applaud the fact that the ODA is contributing £1.13 million to the AIDS prevention programmes in Africa and even more money to the MRC's work on AIDS research. But at Harare in 1991, as we have been reminded, the right honourable Gentleman the Prime Minister, then Chancellor of the Exchequer, proposed wiping off two-thirds of the debts owed to our Government—not to the multilateral agencies —while pressing on with our aid programmes.

A final word would be this. Prevention of that kind is always better than cure. Money spent in support of such recovery today is a much better investment than any money spent on conflict resolution tomorrow.

3.48 p.m.

Lord Greenhill of Harrow

My Lords, the noble Lord, Lord Judd, has been energetic in seeking recruits to participate in his important debate. He spoke with his usual eloquence and intensity; and most of us would like to help him. I certainly would. But we must not diminish our sympathy with the noble Baroness, Lady Chalkei, who daily deals with extremely difficult problems both domestic and international. Your Lordships will recall how she steadfastly protected her budget when it was brought under threat in the past year.

I shall be brief because I think that many noble Lords will not agree with what I have to say. I cannot pretend to be an expert in these matters, but I was struck by a document recently produced for the ODI by Dr. Howell and Adrian Hewitt, for whom all those of us who know them have great respect. The document states: There is little evidence of diminishing support for overseas aid in the UK". That is not quite the positive assertion that many of us would like to see. I imagine that support varies in different age groups. But personally I doubt whether their opinion still holds true. Much depends on the way in which the question is presented to the general public and the identity of the recipients of our aid. Possibly the terrible events in the third world have renewed public sympathy. However, they have also created antipathy, disgust and a feeling that it is too much to expect that we can help.

However, as one who attends this House regularly, I cannot dismiss from my mind the theme that has been incessantly reiterated by noble Lords for many months —not only Members of the Opposition, colleagues of the noble Lord, Lord Judd, but throughout the House and across parties. That theme is that the Government are not giving sufficient funds to health, welfare, housing, training, research, education, homelessness, defence and many other vital domestic areas which greatly affect large numbers of our population. The complaints are for the most part justified —unhappily justified. If they are to be met even partially, where will the funds come from?

On reflection, I find myself regretfully taking the old-fashioned view that some of our domestic needs which I have mentioned should take priority over attempts substantially to increase overseas aid. I would ask the Government to face this possibility when they are considering the great pressure that may increasingly be put upon them.

I recognise that much overseas aid brings economic and political benefits to the country, not always immediately but in the long run: for example, assistance in third world countries as regards population control and so on. There are, of course, many other types of aid.

However, what worries me is the lack of support for many of our own domestic activities which are so often referred to in this House and which lack funds Rather than widely expanded overseas aid, many here would prefer more of our charity to increase at home.

3.50 p.m.

Baroness Lock wood

My Lords, I should like to thank my noble friend for giving us an opportunity to look, I hope in a positive way, at some of the problems which affect the world as a whole. It seems to me that there are two levels to the problem. There is the crisis level, the crisis issues with which we are all familiar and which gain much publicity in our media and call for an immediate response. Then there are the long-term fundamental issues which are often exacerbated by the crisis problems. Those long-term fundamental issues themselves require a long-term strategic approach. I wish to deal with the latter.

Aid programmes are rightly concerned with trade and with economic affairs, attempting to build up the economies of third world countries. But they are also concerned with social problems and the two need to be in balance. It seems at present that the two are not in balance. Factors such as adequate health services, including reproductive health care, education and access to safe water and sanitation all support successful economic development. A lack of those services detracts from successful economic development.

My noble friend referred to the report which has been prepared for the UN 1994 Human Development Programme. This, too, suggests a shift in emphasis. It recommends that 20 per cent. of aid would be an appropriate figure to devote to human development projects. It advocates compacts whereby developing countries, wherever possible—accepting that some of them are too poor even to do this—should match that by allocating 20 per cent. of their public spending to human development resources.

A 10-point target programme has been developed for the next 10 years. This covers 10 very important issues, including: everyone to have access to basic education; everyone to have access to primary health care, clean drinking water and sanitation; all willing couples to have access to family planning services; adult illiteracy to be reduced to half the current figure; and female illiteracy, which is much higher than male illiteracy, is to be put on a level with that of men; and world population moves should be towards stabilisation at 7.3 billion by 2015. That is the lower projection target for world growth.

It is an important programme requiring additional spending in terms of aid, to the point of some 30 billion to 40 billion dollars a year. But the report suggests that it could be done by making better use of existing resources. It would certainly be more easily achieved if all countries were to devote the UN target of 0.7 per cent. of GDP to aid.

I should like to ask the Minister what percentage of UK aid is devoted to these areas of human development. Are there plans to increase it? In particular, I would like to ask the Minister how much of the aid is allocated to population matters. Population growth is one of the most fundamental problems that must be tackled if we are to establish a world at peace with itself.

The preparatory meetings for the United Nations International Conference on Population and Development, to be held in Cairo in September this year, have increased the target percentage of development aid to population activities from 2 per cent. to 4 per cent. Has the United Kingdom achieved the current 2 per cent. target and does it accept the new 4 per cent. target?

The issue is crucial. We cannot go on for ever adding 90 million people a year to the world's population. There are finite resources and there is finite space in the world. Once the present hump of such a large proportion of the world's population being of reproductive age is overcome—in some countries over 50 per cent. of the population is between the ages of 15 and 35—we must secure a more sustainable age profile. It is an enormous task, but it is not an insoluble one.

Progress can and is being made. For example, in Kerala in South India, the fertility rate has now come down to 2.3 children per woman. In Thailand, average family size has fallen from 6.14 in 1965–70 to 2.2 in 1987. In Bangladesh, it fell from 7 in 1979 to 4 in 1990. This fall in family size has been achieved through an interacting process, a chain reaction, if you like, of increased use of contraception; better education for women; improved status for women, both in the home and in society as a whole; later marriages for girls and better spacing of children. This continuing process is something which we must aim to achieve in all developing countries.

Over the past few decades, contraceptive use in developing countries has increased fivefold and contraception is now used by 55 per cent. of married couples. But access to family planning has developed unevenly and in most of sub-Saharan Africa it is still below 15 per cent. In many areas, there is still a large unmet demand for contraceptive supplies and access to reproductive health care.

The International Conference on Population and Development to be held in September this year gives another opportunity to tackle these problems on a global scale. I should like to ask the Minister for an assurance that the British Government will support the draft action programme that has been prepared and that they will do all in their power to ensure that there is no compromise on that.

3.58 p.m.

Lord Blake

My Lords, I too am grateful to the noble Lord, Lord Judd. Indeed, if it had not been for a very persuasive letter which he wrote to me, I am not at all sure that I should have been here this afternoon. He persuaded me, and I should also like to say how lucky we are in this House that the Minister responsible for the subject is sitting with us and in a position to answer the questions that have been and no doubt will be raised.

Many noble Lords who have spoken and who will speak this afternoon are far more expert in these matters than I can ever hope to be. My direct experience is limited to sub-Saharan Africa, and to a limited part of that. I have, however, been for many years a trustee of a charitable trust which now disperses something like £2 million a year in the countries of the old central African federation: Zimbabwe, Zambia and Malawi. The trust gives its main priority to health and education. It has always made a point—I believe that this is important (it is one of just two points that I want to make this afternoon)—of giving money directly to the relevant institutions which we can contact, and of never doing so through governments. To say this may be unpopular in some quarters, but the fact is that until very recently a great many of the governments in sub-Saharan Africa have been inefficient, corrupt and greedy, and have been by no means competent at using the aid that they have received. So far as is possible—I appreciate that it may not always be possible—aid should be given directly to institutions—to hospitals, schools or whatever it may be —and not be funnelled through governments, which may for all sorts of reasons misuse it, sometimes for ideological reasons, sometimes through sheer greed, and sometimes because they want to line their own pockets.

I should emphasise on behalf of the trust with which I am concerned that this policy goes back a long while. It has nothing to do with the fact that most of the territories about which I am talking are now black-ruled. They were white-ruled, but we did just the same then. I hope that the noble Baroness, Lady Chalker, will not mind my saying this, but I am afraid that that has to do with a general mistrust that we happen to have of governments in general. Of course I am sure that the noble Baroness would not be the sort of person whom we would have in mind at all. Nevertheless, in Southern Africa there has in the past been very good reason to be doubtful about funnelling any money through govern-ments. The misuse of some of the funds is notorious.

Without the use of some of that aid, it would not have been possible, for example, for some of the countries to build brand new capitals, at enormous expense and quite unnecessarily. Why waste an enormous amount of money on building Lilongwe in Malawi, when there was a perfectly good capital in Blantyre? A lot of money has been wasted in the past. I commend to the House a book on this subject which some noble Lords may already have read. It is Reality and Rhetoric, by my noble friend Lord Bauer, in which he analyses some of the things that have gone wrong with aid in the past. They are well worth bearing in mind. It may well be that we are moving into a new and better world of government in Southern Africa. But I remind noble Lords that democracies, as well as dictatorships, are capable of inefficiency and corruption. The whole situation needs watching.

My second point, which arises from my experience as a trustee, is that one wants to supervise what is done with aid and to do it on the spot. One wants to have people who can go out there and see that the money that is allocated is being rationally and sensibly spent. That is by no means always necessarily the case.3

As a trust, we have made a point of having two people in each of the territories with which I am concerned whom we call correspondents; they look at what is happening on the ground and report to us. Furthermore, we make a point of having each trustee in turn take a few weeks to visit the countries concerned to see what has been done with our money. That may sound somewhat Gradgrind-ish in spirit. But we must remember that there will never be enough money for these purposes. Therefore the money that is allocated —and perhaps it should be more than we do allocate —must be efficiently spent and targeted at people who deserve it and need it. That is very important.

So far as the Government are concerned, if they can make sure that the moneys which they generously give are being properly spent, so much the better. That is the only moral that I can draw from my own, admittedly limited, experience.

4.5 p.m.

Lord St. John of Bletsob

My Lords, a few noble Lords may be aware that the main cricket ground in the township of Alexandra, just outside Johannesburg, is known locally as the John Major Oval. That lush, green oasis in a bleak landscape is named after the Prime Minister because it was made possible by a £25,000 grant from the British Government in 1990. Since then it has become a centre of hope, activity and advancement for hundreds of youngsters in Alexandra.

I am grateful to the noble Lord, Lord Judd, for giving us the opportunity today to debate this extremely important and topical issue. In my seven-minute time allocation, I wish to concentrate my remarks on how Her Majesty's Government might best support the ongoing progress in South Africa and shed some more general light on the issue of overseas aid and development.

The new South African Government are starting to address the immense expectations that were aroused by the euphoric election and inauguration of President Mandela. Their needs are vast, with so many imbalances born of apartheid still to be addressed. Hopes are high; but time is short.

What sort of aid do the South Africans themselves think that they require? I would contend that it is not just a matter of monetary assistance, but also one of more practical assistance: in education and training; in developing skills and technology; in health care; and also in administration. One specific area where concessionary finance and grant aid is sought in South Africa is in the area of electrification. Almost two-thirds of the population are without electricity, particularly in the rural areas.

Many would argue that generous cheques from overseas are not the only answer. That is not just because cash can easily disappear into mischievous hands—a point that was made by the noble Lord, Lord Blake. It is also because South Africans are determined not to fall into the same debt trap from which so many African nations have struggled to escape. Obviously that latter point applies more to IMF loans than to overseas aid, which is in the main grant aid. The noble lord, Lord Redesdale, has already raised the need to alleviate the debt burdens of many African countries whose economic growth has, to say the least, been crippled by those debt burdens.

British aid to South Africa, I understand, currently runs at around £45 million a year, with over three-quarters of that in the form of bilateral aid, much of which is directed at improving the quality of education. As many noble Lords have mentioned, the noble Baroness, Lady Chalker, rightly deserves praise for much of what has been achieved in South Africa.

There is a perception that multilateral aid is less effective. Often, the aims of multilateral aid projects have become muddled, or even lost, within the machinery of vast organisations. Clearly the less space between the giver and the receiver the better.

I would have liked today to have touched on the definition of aid, more specifically whether it is a charitable donation from our taxpayers to the world's poor or whether it is intended often as a subsidy to our export initiatives, but I am sure that this will be raised by other noble Lords who will be speaking today. It has already been raised in part by my noble friend Lord Greenhill.

The noble Lord, Lord Deedes, spoke about the rot that set in in many African countries, particularly Angola and Mozambique, during the Cold War years. However, since the end of the Cold War there has certainly been an explosion of conflicts and violence right across the globe—from the tragic events recalled by the right reverend Prelate the Bishop of Lichfield in Rwanda, through what has been happening in Somalia, to Bosnia-Herzegovina—which have all resulted in the ODA's expenditure on emergencies increasing fivefold since 1987. This has obviously led to concerns by Oxfam, Christian Aid and other aid agencies that the quantum of monetary aid by Britain to developing countries has fallen.

I would like to touch on just one final issue in the Government's stated seven key objectives of overseas aid, namely helping developing countries tackle environmental issues. Taking care of the environment does not always rank high on the priority list of poorer countries confronted with problems such as famine and civil war. But it should, and initiatives such as the funding of forestry management experts in Nigeria and the £25 million project for the conservation of the Western Ghats forest in India are essential in the effort to preserve natural resources.

The new South Africa could benefit from environmental guidance and similar aid, but let that aid be clear and focused. A report published last week by the British charity, Action Aid, outlined a global crisis of such proportions that the efficacy of aid strategies becomes ever more important.

So in conclusion I would urge your Lordships to assess British aid not only on the quantity as a percentage of GDP but also on the specific quality. It may be true that the £25,000 spent specifically and practically on the John Major Oval in Alexandra had a more positive impact on the daily lives of under-privileged Africans than many of the large American cheques, many of which remained in the pockets of such individuals as President Mobutu of Zaire. "Bilateral aid for a clear purpose"—that should be the motto which rules Britain's overseas aid strategy.

4.14 p.m.

Lord Kennet

My Lords, I hope that in time this House, the whole country and successive governments will increasingly look upon our aid expenditure as part of our overall economic relationship with the poorer part of the world. That global focus seems a bit lacking at the moment. It is particularly important to do this as a greater and greater proportion of our aid becomes tied aid; we have heard today that that figure is now two-thirds. So two-thirds of British aid overseas can now be described as a special kind of export trade, a subsidised export trade.

Today I want to concentrate on that part of the special kind of trade (which is also known as aid) constituted by the arms trade. I believe I am right in saying that, after drugs, by value that may now be the second largest trade in the world. My noble friend Lord Judd has just told us that 86 per cent. of the world's arms' exports come from the five permanent members of the Security Council, and that two-thirds of those exports go to the third world.

Of course arms' exports and military aid, under a separate heading, are sold within the global envelope that I outlined. There are publicly visible and publicly justified sales of arms to the third world, and there are also clandestine sales. It is enough to mention the names Matrix Churchill and Pergau to establish that point.

I shall give a sketch of reasons for thinking that the export of arms—whether or not in the form of aid—is bad national economics and harms this country's economy. I can think of three reasons why it is good for the British national economy. First, it increases foreign exchange earnings; that is, if it is a sale. Secondly, it increases employment and, thirdly, it enables our arms industry to achieve longer product runs.

However, I believe that there are seven reasons why it is bad for our national economy. First, it impoverishes the poor countries, thereby making them less able to trade with us in the normal way. Secondly, it destabilises their governments and makes them less suitable trading partners. Thirdly, it leads to conflicts between third world countries, which obviously has the same effect. Fourthly, it increases the call on us for aid because of the devastation that those third world countries inflict upon one another. Fifthly, the military capacities of the recipient countries to which we have contributed may be used against us directly on the battlefield, and there are plenty of examples of that. Sixthly, when that happens, or when we fear it may happen, it tends to increase our own defence expenditure—to the distress of the Treasury. An example of that is the current planning phase to establish ballistic missile defences in this country to protect ourselves against, particularly, Libya and Iran. Seventhly—this one is so obvious that I put it last—it directly impoverishes this country by the export credit guarantee payments which have to be made when the purchasers of our arms, especially in the third world, default.

I am not talking about the difficulty of stopping the arms trade in the world; that is obviously enormous, and we have to face the fact that we have not yet really begun to try. The Prime Minister made a welcome and unusual statement in that direction about three years ago, and there has been an attempt to produce some sort of register; but the surface has not yet even been scratched. It is simply that the fingers that would scratch the surface are perhaps getting nearer to the surface each year. I have suggested that we might try to analyse the economic effect on us of these arms shipments, and to encourage the other great arms' exporters —France, Russia, the United States and China—to do the same.

4.19 p.m.

The Viscount of Falkland

My Lords, I too had an invitation from the noble Lord, Lord Judd, to participate in this debate, and I never knowingly refuse a good invitation. I have not spoken on these subjects for some time, although just over 10 years ago I made my maiden speech in a debate on roughly the same Motion. In those days there were some great figures in this House—there are still great figures in this House, and I see some of them here today who speak on these matters—and I think in particular, when I spoke all those years ago, of Lord Brockway, Lord Hatch and my noble friend at that time Lord Walston. We did not all agree with everything that Lord Hatch said on these subjects, nor indeed with what Lord Brockway said, but they were always passionate and sincere advocates for the oppressed people of Africa—a continent in which I have had a particular interest during my working life and which I have continued to follow closely in these latter years.

During the past 10 years a number of enormously important events have taken place which have affected Africa and the attitude to it of the rest of the world. In turn, that has affected the attitudes to aid. Some of those events were described very effectively in the speech of the noble Lord, Lord Deedes. I do not disagree with a single word in his speech. That is a rare position to take in this House. Indeed, some of the points that he made I also have attempted to make in the past.

I was rapped over the knuckles one day by the late Lord Hatch because I related much of the corruption in the African countries in which I had worked to the situation engendered by the Cold War and what he called the lack of the moral dimension in those times. He said that he agreed with me but that I should not say that because all that it would do would be to play into the hands of the Government, who would have a further excuse to reduce the amount of aid. I did not entirely agree with him, but that was his view. After that, I desisted, but I am glad that the noble Lord, Lord Deedes, put his finger on the point.

In my view, some good has come from the most important political event that has taken place; namely, the collapse of the Soviet empire and the removal of Africa as the battlefield between the two great powers. We have seen that happen. It was reflected in the excellent speech made by the right reverend Prelate the Bishop of Lichfield who spoke to us of Uganda. It is a country which I too know well. He said that enormous progress had been made in that country. It is a country which is one of the most fertile in Africa, although it has the disadvantage of being landlocked. It was the show place in colonial times of British educational expertise, as a result of which Makerere University produced some of the best educated Africans on that continent—a legacy which continues to this day. During the horrifying years of Amin and Obote we saw in London the number of highly educated Africans from Uganda who came here as refugees and, not surprisingly, did not want to go back in a hurry, thus impoverishing further that poor country.

It is an absolute miracle that that country has recovered. It had collapsed to the point of anarchy and where the kind of massacres that we witness today in Rwanda might well have taken place. The massacres of those appalling years from the early 1970s to the early 1980s were bad enough, although they were less publicised. Since then, it has gained a president who has the interests of the whole country at heart. It is a country which, like a lot of African countries, has arbitrary borders which were drawn in early colonial times and as a result has all the attendant problems of different races and different tribes. In that country he has managed to create a stability which none of us thought possible. I must give credit to the Government and the ODA because they have contributed most valuable training in that country, most particularly for the police and the armed services.

Africa is a very unpredictable country. Had anybody told me 10 years ago that the events that have taken place in South Africa could have occurred, I should not have believed them. I always thought that they would happen eventually; but at that time in my view the Cold War, which was mentioned by the noble Lord, Lord Deedes, in a way put a brake on the kind of progress that could be made toward seeing that problem clearly. I believe that there is a connection between the quite rapid changes that have taken place with the resulting position in South Africa and the breakdown of the Soviet empire.

As a result of what has happened in South Africa, provided that everything goes well—I do not see why it should not since it has the good will of most of the world —the other countries in Africa to the north of South Africa should benefit in fairly quick time. After all, it is in the interests of South Africa. It has natural customers on its borders to the north. It is has no interest in seeing tribal warfare and upheaval. So I take an optimistic view about that and with all my heart I hope that progress in South Africa will continue. That matter has been referred to by other noble Lords this evening.

In the meantime, countries other than Uganda have the same problems. The problems of debt have been mentioned by other noble Lords. The debt in Uganda is largely multilateral debt, which is very difficult to deal with. I hope that when the Minister comes to respond to the debate she will mention that issue. There is very little bilateral aid in Uganda because of the terrible history of that country. It has not benefited from all the good work done by the Government and by the noble Baroness and her right honourable friend the Prime Minister in helping to arrange for writing off debt in bilateral areas. It is a country which, like many African countries, wants to progress. Again, I shall take Uganda as my example—and time is running short. To enable it to progress, it is absolutely vital and important that we as a nation (and I hope other nations too) encourage it to develop its agriculture and produce crops with added value. It is no good producing raw materials, as such countries have been encouraged to do. That simply moves the economy out of the control of the area. We must encourage them and can only do so with the removal of the debt burden. I hope that that, too, the Minister will address when she winds up the debate.

4.26 p.m.

Baroness Macleod of Borve

My Lords, the number of noble Lords who have put down their names to speak this afternoon shows how very important the third world is to us in this House. I thank the noble Lord, Lord Judd, for initiating the debate. When my late husband was Secretary of State for the Colonies from 1959 to 1961, he and I had a great deal to do with the third world and Africa in particular, although my husband also had a lot to do with the West Indies. I discovered a great deal of love for Africa and the Africans. I suppose that in those two years I cooked more meals for 16, 18 or 20 people every day of the week than perhaps anybody else in this Chamber has done.

Certainly more needs to tie done to help developing countries. Those of us who know some of the countries involved can always find reasons and more ways of contributing to those who are less well off. But the United Kingdom is the sixth largest aid donor, with an overseas aid programme of £2.2 billion from 1994 to 1995. Personally, I believe that we can be very proud of that fact.

Over the past four years the aid budget has averaged 0.3 per cent. of the GNP. As we all know, the Government are working towards a 0.7 per cent. target. I understand that the increase will be targeted primarily towards the poorer countries, of whom, as we heard this afternoon, there are a great number.

Financial aid is bound to play a big part in our Government's programme. We must not forget the two other important parts of UK aid. First, there are the people who go to various countries to give material assistance, of which VSO is a prime example. But many people go to give their time and knowledge to peoples who need and will benefit from their expertise. I have in mind school teachers, medical staff, agricultural experts, foresters, and scientists—the list is very long. All are welcome. The other day I was told—with a little hilarity—that a woman scientist was sent from this country to start water bore holes. I understand that she got rather wet and dirty and the Africans could not understand why a woman scientist should be sent from here to do that job. Of course, she was an expert and did it brilliantly.

The voluntary organisations and charities are well aware of the deprivation suffered in some parts of the world. I was interested to hear what my noble friend Lord Blake said about the part of the world that he has been helping in a financial capacity. I am sure that everybody there is grateful for the work that he and his trustees perform. The charities and organisations raise money locally and nationally for much needed equipment, food, clothing and so forth. But it is the people on the ground—as my noble friend Lord Blake said—who see the suffering and the need; they are the carers.

I want to say a few words about a country which I know and love well. I am glad that the noble Lord, Lord Redesdale, had a happy sojourn there during the last general election. I refer to Malawi. For 30 years the former Nyasaland struggled to overcome poverty, drought, lack of money and the many necessities of life which the western world takes for granted. For 30 years Dr. Hastings Banda led his tiny country towards education. It now has a university, a beautiful sixth form college, which I have visited, and both secondary and primary schools. There is a better standard of living with improved medical care. Its economy was, and I am hoping will be in the future, sound.

Malawi has 8 million inhabitants but three years ago —and this caused the economic problems—2 million people fleeing from Mozambique came over the borders and had to be fed, watered and housed from its scarce resources. This they did with a charm that is characteristic of the people. Dr. Banda has led his people all these years and is known as the "grand old man of Africa". Having known him and his people all these years—since my husband made him President literally at half-past five one morning—I should like to pay my tribute to him.

Finally, we, and indeed all the third world countries, owe a deep debt to my noble friend Lady Chalker. Her work on behalf of the UK is recognised everywhere and I thank her for her enthusiasm and her expertise. We are indeed fortunate to have her as our Minister representing the United Kingdom.

4.34 p.m.

Lord Ashley of Stoke

My Lords, we have heard some distinguished speeches this afternoon but I feel that I must express my disagreement with some of them. A large number of controversies exist about many aspects of overseas aid, but in my view the main requirement is that we should keep our sights on the actual amount we give, its quality and allocation.

The last ministerial Statement I read about the amount of aid being given was made by the noble Baroness, Lady Chalker. She is rightly admired for her work and received many compliments today from the noble Lord, Lord Greenhill —who spoke of his sympathy for her—and the noble Baroness, Lady Macleod of Borve. The Minister deserves those compliments. However, I hope that when criticisms are levelled at her she will feel that they give her some kind of support in her efforts with the Chancellor and others with whom she may find difficulty.

Her Statement about the amount of aid was a deep disappointment. When the noble Baroness was challenged in this Chamber on 2nd March she said that people who are critical of the real term decline in our aid programme should examine the detail. Fine, we will all do that. But what will we find? Will a rabbit be pulled from the hat? Was the decline really an increase in aid? What happens when we examine the details? I am afraid that there was no increase at all. Although tribute was paid by the noble Baroness, Lady Macleod, to the amount of aid that we are giving, I find that, on the contrary, the trend is extremely disturbing.

The noble Baroness, Lady Chalker, went on to claim credit because our aid was targeted better than others. That was her response to the criticism about the amount of aid. We are all in favour of targeting. But that is no answer to the charge that this Government failed to keep the commitment to the target of 0.7 per cent. of the GNP. Those are the facts. I know that there are extenuating circumstances, grave national problems, economic difficulties and so forth. But this Government made that commitment and have not achieved it.

The reality is even worse than that. The Government have actually moved in the opposite direction. The way that the noble Baroness, Lady Chalker, put the figures makes it seem that we are doing well. It is an unwitting way of misleading the House. The fact is that the amount of aid that we give is decreasing. Aid, as a proportion of GNP, was 0.51 per cent. when this Government took office in 1979 —the year of Saint Francis—but last year it fell to an all-time low of 0.28 per cent. Given the freeze on the next two years it is expected to fall to 0.26 per cent. in 1995–96. That is almost precisely half of the level that this Government inherited. By any standards—certainly by the standards of abysmal world poverty—that is a tragic dereliction, no matter how it is presented.

I am sorry that the noble Lord, Lord Greenhill, has been forced to leave his place. He put forward the view that domestic need should take priority over the needs of developing countries. I cannot share that view. I cannot see how that claim can be put forward at a time when one fifth of the world's population goes hungry every night, one quarter lacks access to safe drinking water and one third lives in abject poverty. I cannot see how anyone can say that domestic need should take priority.

Apart from the question of amount, the question of allocation is of paramount importance. The noble Lord, Lord Deedes, was exactly right when he said that money has been wasted; that governments have wasted it and that the money should go to the NGOs. That is precisely the point on which I hope the Minister will focus when she winds up the debate. We should give the money to the NGOs. They know the problems; they have practical experience and the various crooks around the world who are in power would be robbed of the ability to misuse the funds. I warmly endorse the point made by the noble Lord, Lord Deedes.

As regards commerce or arms sales, when we become involved in those matters we tread on egg shells. The main question arising from the Pergau Dam —I am not going to detail that in my remaining one-and-a-half minutes—is whether it was an isolated incident or part of a pattern. We do not know, but I hope that it was only an isolated incident.

I conclude by saying that no one can avoid the realities of exports, strategic and trade interests and political considerations. But none of these should influence or affect our aid to the developing world. We need to ensure that our aid is not unduly affected by commercial and military considerations and that it should be increased to these desperately poor countries. We should ensure that it goes to the poor people of those countries. I hope that the noble Baroness will continue her marvellous work in her department—it is marvellous work despite my criticisms. I hope that she will help to achieve the target of 0.7 per cent. of GNP rather than allow the Government to move away from it.

4.41 p.m.

The Lord Bishop of Ripon

My Lords, I too would like to thank the noble Lord, Lord Judd, for introducing this debate and to share the disappointment which has just been expressed by the noble Lord, Lord Ashley, about the performance of this country as regards aid. I listened carefully to the words of the noble Lord, Lord Greenhill of Harrow, and I am sorry not to see him in his place. I thought he was claiming that as there was less money around it should be targeted to this country rather than overseas. I find that a very difficult argument in days when our gross national product is steadily increasing. I should have thought that we were growing into a wealthier nation as indeed many other nations are in the developed world. It seems to me that at a time when our wealth is greater we are prepared to share a smaller proportion of it with those who are in great need. I therefore find it very difficult to accept the argument that there is less money available than there was in previous decades. As the noble Lord, Lord Ashley, has made clear, the proportion and absolute amount which we give to overseas aid has diminished.

I wish to take up a point made so well and eloquently by the noble Lord, Lord Deedes. I share with other noble Lords the sense that he was making points of enormous importance in talking about the poorest of the poor and the way in which they were not being helped by present aid programmes. I share the points that he made about the importance of non-governmental organisations in distributing aid to the poorest of the poor. They are individuals.

There has been much talk in your Lordships' House this afternoon about Africa and perhaps a little less about Asia, which I know to some extent. Those of your Lordships who have trod the streets of Calcutta will know the incredible poverty to be found in that city. However far down you press in Calcutta there always seems to be a level of people living below any level which is imaginable to us as westerners. People make a living out of what seems to be an intolerably small amount of material—a small stretch of pavement and a tap at the end of the road. I find it almost impossible to imagine what life is like for many people in Calcutta and elsewhere in Asia.

NGOs are well used to targeting aid to the very poorest. I hope that the noble Baroness the Minister will give us some assurance that an increasing proportion of it will be given to those who are most in need; not just to the poorest countries, but to the poorest people. It is not only a question of aid programmes. NGOs are well aware that within each country there are complexities which give rise to poverty within that country. As one example, I mention the carpet industry in India about which Christian Aid has been concerned recently. In the carpet industry in India there are large numbers of boys —some as young as six years of age—working in appalling conditions for what is almost entirely an export industry. That is bound to perpetuate poverty not only because the employees receive very little for the work that they do, but also because in later years they will suffer ill health as adults having been overworked and underfed. That is perhaps a good example of how something which is occurring in a particular country can perpetuate poverty in that country.

Both the Indians and Christian Aid are arguing that the most effective way to solve this abuse would be to ensure that carpets are stamped with some kind of guarantee proving that they were not made with child labour. I give that illustration just to indicate something of the difficulties which surround helping the very poorest of the poor.

I am aware, as other noble Lords have said, of the part which is played by civil disorder. I know Sri Lanka at first hand as I have lived there myself for some years. I wish to reinforce the points made in your Lordships' House during the debates on asylum—that is to say, that the effects of civil disorder are so frequently felt most profoundly by those countries that immediately border the disorder. In the case of Sri Lanka the country is, of course, India. We in this country have done our best to ensure that it is not our problem; to ensure that Tamil refugees should not be allowed access to this country. Millions of them find their way to India which then has to provide for their needs and make provision for them as refugees. So often it is the poorer countries in our world that are coping with the problems created by civil disorder which, as has already been said, are in part due to poverty and the lack of proper aid in those countries.

I believe that the primary argument for aid has to be the moral one; that there are individuals whose lives are stunted and thwarted. We must do what we can to ensure that there is some kind of fulfilment for them. I am well aware of compassion fatigue. I argue that it is not so much compassion as obligation. My family has served in India for nearly 200 years. I am aware of what we have received from the Indian sub-continent. I believe that as a country we have an obligation to make some kind of return to that country and to others in Asia.

But if that argument is not sufficient then I put forward an argument from self-interest; namely, that at the end of the day if we do not help countries in Asia and Africa to have a proper, developing economy to enable their people to lead fulfilling lives, then the bitterness, the sense of stunted growth and being thwarted, which many people feel, will eventually overflow in the shape of anger and conflict. We might like to think in this country that we can stand apart from that and protect ourselves from it, but at the end of the day we shall not be able to do so; there is an argument as regards self-interest also.

I believe that we should take account of the public mood in this country. Like other noble Lords, I am grateful to the noble Baroness the Minister for the splendid way in which she has attempted to defend the aid programme. But there is perhaps collusion between the Government and the public mood to say that this is not our problem; it is all happening far away. That mood should be resisted. I encourage the noble Baroness in her efforts to do so.

4.48 p.m.

Lord Selsdon

My Lords, in the noble Lord, Lord Judd, and in my noble friend Lady Chalker, we have two people of complete integrity and sincerity. The differences between them can be measured only in minor percentage points. The debate today is on a subject about which I am perhaps a gifted amateur. I love the whole scene of development. It is not on aid that I shall concentrate today, but on the development aspects of the Motion before us.

I think that we are missing a trick or two, perhaps living in the past, and failing to recognise the break up of empires which have caused many of these problems. We can really divide the issue into two aspects. There are the disasters brought upon us by God or by acts of God, on which the world must be ready to react instantly and with all the necessary financial support which is required. We cannot budget for disasters. If, as the noble Lord, Lord Judd, says, they are on the increase, resources must be made infinitely available from any country that has them.

My second question relates to the whole purpose of aid. I do not like the word "aid". I think that "development" is a much more acceptable word to use, as is the phrase "assistance in development". Development is a good thing and it is possible. By very definition, today we have developed countries and developing countries. I think that we should get rid of the term "third world"; I have never liked it. As I have said before, it sounds rather like the old third class on British Rail. We must concentrate on where development is possible and on how it can be achieved, because development creates added value and wealth. I am afraid that the problem is man's inhumanity to man. The problem is political.

As the break-ups of empires have continued, so we have seen the spread of that terrible disease—I use that phrase again and again—called "tribalism". It is the tribalism that has emerged in many countries that causes conflict, breakdown in progressive economic development, persecution and poverty.

The Government's policy is, to use one of their little phrases, that they "seek to promote good government". "Good government" is a very simple phrase, but it is perhaps impossible to achieve good government when one seeks only to throw money at things. It is a matter of persuasion, not coercion. It is not a matter of bribery or corruption. It is only when there is stable government within the countries concerned that any form of progress can take place. We should be devoting as many human and other political resources to the creation of good government as we can. It is not so much a question of money; it is often a question of providing the people who, on the ground, can point out the error of ways. Administration is no problem. We should be proud to recognise that in the ODA we have what is probably one of the best administered development organisations. It has a history and knowledge that is unparalleled. Those are not the problems; the problems are political.

If we say that a problem is political, we may be accused of beginning to seek to interfere in other people's sovereignty. That is dangerous. So the problem is how we can persuade people to have good government. That is no easy task. It is not a matter on which I can offer conclusions or make recommendations today.

However, there are areas of hope, many of which I find interesting. Like the right reverend Prelate, I have spent a considerable part of my life involved in India. Indeed, I was an adviser to the Indian Government on the increased production of carpets. There was a very simple problem. Because they could not produce enough carpets during daylight hours, people ruined their eyesight by working at night and they were going blind. One simple Coventry climax generator im-mediately increased production. We then wanted to improve the quality of the wool. With the help of the ODA, we found a couple of merino rams from Australia. They were shipped over to India. That was a great event and all the people from Delhi came up to Srinagar to visit and to see the new farm. We even thought that we might introduce artificial insemination. We had a great party. Your Lordships can imagine what we had for dinner on the barbecue that night—one of the merino rams. It was a considerable embarrassment to me to try to justify that in the budget.

However, we are talking about economics. Several things have caused the problems. The first was inflation in the West. That led to high interest rates, compounding the problems of debt service. Interest rates and inflation are now down in developed countries and the impact of that is just working through the system. The low rate of interest is equivalent to, and in many cases below, the potential growth rate of the countries concerned.

The second cause was the high cost of energy. Many developing countries had no natural energy resources and had to import energy at inflated prices due to the 1974 oil price rises and to the rise in the dollar. In real terms, oil prices are now lower than they were in 1974. Imagine the scenario, my Lords, when suddenly we saw the solution to the political problems in countries such as Iraq, Iran and Libya. Imagine oil prices coming down to seven dollars a barrel. That could be the price if production in those countries came on stream. That would have a further impact on the world.

Then we come to food. The world can produce enough food. It is a very simple matter. One does not even have to talk to some of the Israeli experts with their new technology to realise that, with even one quarter of the land mass of the earth, we could, with the right organisation, produce enough food at lower prices to be able to feed everyone.

We are not facing major development problems. We are facing political problems. I believe that it is in terms of contributing political stability and helping to establish good government that this country can play the greatest role.

4.55 p.m.

Lord Ennals

My Lords, we have listened to a most interesting speech. The only point on which I should like to touch is my agreement that the term "third world" should be dropped. I shall not say anything further about that, but I sense that the Minister agrees.

I welcome the very broad scope of the Motion which was moved by my noble friend Lord Judd. He did so in what I thought was one of his best speeches. We have had several very good speeches from my noble friend in the past two or three years, but this was one of his best.

In recent weeks, as a member of Dr. Boutros Boutros Ghali's advisory committee on the 50th anniversary of the United Nations and as an officer of the United Nations Association, the staff of which I joined 48 years ago, I have been involved in many meetings about UN50—not so much relating to the celebration of 50 years of achievement, although there is much achievement, but in considering how the UN's tasks can be better fulfilled in the next 50 years. I greatly admired the speech of the noble Lord, Lord Deedes. The only sentence with which I disagreed was that concerning his dismissal of the work of the UN. I have worked with UNICEF and UNHCR. Those agencies have done some outstanding work, usually in close association with the voluntary organisations to which I shall refer.

I think that this is a time when there should be the most fundamental review of the shape of our aid programme to prepare us for the next decade or 20 years and a review of the priorities that we should assume in our national and international policies. Like my noble friend Lord Ashley, I profoundly disagreed with the noble Lord, Lord Greenhill, who I am glad to see has returned to his place. The noble Lord missed two or three other criticisms from noble Lords who were not prepared to go along with what we felt was a rather nationalistic point of view about our priorities in terms of resources.

Therefore, I want to advocate that Her Majesty's Government should carry out a very careful review of the aid programme. Obviously it will take some time. I hope that it will be completed by the time that we reach the 50th anniversary of the UN and that it will make the fullest possible use of the experience of the network of non-governmental organisations to which other noble Lords have referred. The Minister has always paid tribute to the work of the NGOs in fulfilling the aid programme. A good deal of her department's resources have been channelled through some of those aid organisations. We should feel very proud of the contribution that they have made in terms of innovation. We should also encourage them in some of the assignments that they have to take on in some of the world's most dangerous situations. Rwanda is one example and Bosnia is another. The House should feel a great, sense of pride in the work of the non-governmental organisations. If I mention par-ticularly Oxfam, Save the Children, Christian Aid, CAFOD, the Red Cross, Action Aid, the World Development Movement and the UNA, it is not because I do not think that the others are greatly deserving of congratulation. I believe that that view is held across the House.

So I want the Government to decide on an aid review. There should also be a defence review and a foreign policy review, but this is not the time to go into those. It is interesting to note that in all those three areas, in particular in aid, although there are political differences, the issues are not primarily party-oriented disagree-ments. It is clear that the respect in which the Minister is held comes from all parties in your Lordships' House. Except for the injection of contentious issues—for example, the link between aid and the arms trade which is currently under examination by the Foreign Affairs Select Committee in another place—most of the issues are not ones of party political disagreement. Such an aid review would have as its basis much evidence of programmes carried out during the past few decades by the ODA, for which I also have a great deal of respect, and the voluntary agencies.

It is not the case that everything has gone wrong. We must recognise that there have been many great achievements in the field of aid. Oxfam has reminded us in its briefing that the share of the world's population enjoying satisfactory levels of development measured against the UNDP's human development index rose from 25 per cent. in 1960 to 60 per cent. in 1992. That is the result of a great deal of co-operation During the past 50 years, global income has increased sevenfold, from 3 trillion dollars to 22 trillion dollars. Since the world's population has more than doubled, from 2.5 billion to 5.5 billion, per capita income has increased threefold. We can record many achievements of the UN agencies, governmental action and non-governmental action. Between half and three-quarters of the world's population now live under pluralistic and democratic regimes. Oxfam has reminded us that last year elections were held in 45 countries; in some for the first time. Like the noble Lord, Lord Redesdale, I am thinking of South Africa, whose election was perhaps the most notable of those held in the past year.

But there is also a negative side. I wish to conclude by touching on the points that were made by my noble friend Lord Ashley and the right reverend Prelate the Bishop of Ripon, who I thought made an outstanding speech. I am deeply concerned by the level of aid that is being made available to the department run by the noble Baroness, Lady Chalker. When the Government took office in 1979, aid as a percentage of GNP was 0.51 per cent. Now, as my noble friend Lord Ashley said, it is about half that figure and is decreasing. If one imposes a freeze, inevitably the figure decreases. This House cannot be satisfied with that. I hope that we shall have some assurances from the Minister about the future as she sees it. Without enough money, however well directed, the job cannot be done.

5.3 p.m.

Lord Beaumont of Whitley

My Lords, it goes without saying that we thank the noble Lord, Lord Judd, for initiating today's debate. Indeed, it always goes without saying because, whenever anyone rises to speak, it is because the person initiating the debate has given them the opportunity to do so. It is not only we who are speaking who should be grateful to the noble Lord but the country as a whole. It is important that we continue to hammer away at this problem.

A theme that has run through the debate is the affection and respect which Members on all sides have for the noble Baroness, Lady Chalker. From time to time it must be a considerable embarrassment to her to be so liked and admired by all parties in this House. If ever she wants some diversionary tactics I hope that she will let us know so that we can change the situation—

Lord Ennals

Or even if she wants another job.

Lord Beaumont of Whitleyb

God forbid that she should be taken to another job.

Lord Ennals

Or promotion.

Lord Beaumont of Whitleyb

My Lords, there is no promotion from this job; it is the most important job. It is as high as one can get in the political spectrum. That may not be conventional wisdom but I am sure that it is true.

We learn from history that people who can control resources try to make profits out of them. That is not at all surprising. Usually they use protectionism in order to keep their profits up. In order to counter that the doctrine of free trade was invoked. It was designed to help the poor, and to a certain extent it worked. That is to say, it helped the rich, overcrowded manufacturing countries such as our own to keep their industrial masses happy by importing cheap food and paying for it by manufactures, thus keeping employment up, wages down and food cheap. That was so obviously to our benefit that, with the aid of fairly selective quotations from Adam Smith and Ricardo, we managed to persuade ourselves that it was to the advantage of everyone else.

But it has not been to the advantage of everyone else. The fact is that free trade has helped to destroy native agriculture and rural life in many countries, including in Europe. Economic liberalism has done a very great deal of harm. It has spread from early days on these Benches to take over the Tory Party. Now it has taken over the world, with the almost universal approval of everyone for GATT. The trouble with GATT is that in the agricultural area it has the effect of turning large parts of the third world into the producers of cash crops at ever lower prices, with low manpower requirements, resulting in migration to ever burgeoning crime-ridden conurbations. We heard from the right reverend Prelate about Calcutta and other major cities of that kind.

GATT has played an unhelpful part in this, but these days the real villains are not the nation states but the transnational corporations (the TNCs). Their weapons are not tariffs, or the lack of them, but the modern equivalent in an information economy of intellectual property. The US-based Intellectual Property Coalition —which consists of, among others, IBM, Du Pont and Unilever—wishes to establish monopoly intellectual rights. It wishes to patent gene engineering and agricultural seeds and to lengthen the lifespan of all patents. Under the new regime, which is advocated by the US and the EC, entire species of crops and animals, and their seeds and offspring, will be up for grabs as private property. Patenting will mean that farmers lose the right to save and re-use seeds from their harvest, since those too will be corporate property. The World Bank has referred to the genetic world of the South as "fields of gold", and guess who is going to want to get their sticky fingers on all that gold!

No one—and I genuinely mean no one—wants to stop inventors obtaining fair rewards for their inventions. But "fair rewards" are not the same as "the price the market will bear", and certainly not the same as "the price the market will bear artificially reinforced by various protective devices". The new imperialism of the TNCs must be stopped if we want a world that will have a sustainable economy and, above all, a world which will be at peace because it is felt, if not to be fairly organised, at least to be moving in that direction.

Although what I have been saying is not entirely along the lines that other noble Lords have been talking about, it is not merely an eccentric view from a Back-Bencher. It is what Oxfam and the World-Wide Fund for Nature are saying. They have enormous experience and expertise and it is important that the Government join the battle on the right side. They should not join it, as all their current philosophies might prompt them to do, on the wrong side.

I believe that I have been opposed to almost anything that the Government have privatised or are going to privatise but in the field of intellectual property we are talking about the property of the human race and to privatise it becomes obscene.

5.10 p.m.

Lord Soulsby of Swaffham Prior

My Lords, I too wish to congratulate the noble Lord, Lord Judd, on introducing the debate. Many noble Lords have said that it is both timely and important; and I certainly agree with that. The noble Lord, Lord Judd, pressed his case with his usual eloquence and forcefulness on those issues.

As someone who has worked at what one might call the coalface of aid delivery in a number of under-developed countries, with UNDP, FAO, USAID and, of course, the ODA, I cannot over-emphasise the importance of such aid with regard to the needs of the developing world, the third world or, as perhaps one should call it, the under-developed world. From my experience, I am happy to comment that the efficacy and efficiency of British aid, through the ODA, is second to none in the developing world. I believe that the most effective form of that is the bilateral system whereby the recipient country and the donor country—namely, the United Kingdom—work together at the local level with acknowledged experts helping local individuals to undertake developments which will lead them to a much fuller comprehension and an ability to stand on their own feet.

It is extremely important that it is seen that the available funds are disbursed in a satisfactory manner so that the British taxpayer can see that his money is wisely, efficiently and effectively disbursed. While all noble Lords in the debate this afternoon believe that the amount of aid is important, I believe also that we must remember that it is not the only measure of the efficacy of overseas aid. The efficiency of how that aid is administered at the local coalface is also particularly important.

Not all aid programmes reach their full potential. In fact, some do not work at all. That is a major problem in some areas. I do not believe that it is a major problem in relation to ODA projects—at least none has come to my mind—but when programmes do not work, it is important that some degree of analysis is undertaken so that the mistakes that have been made both by the donor and the recipient agency are understood and can be avoided in the future.

To my mind and from my experience the regionalisation of administration, and aid programmes in particular, is important because it provides a local level of understanding. I hold up the relatively new ODA regional office in Pretoria, South Africa, as an example of what is good administration. It is staffed by experienced individuals and has, through modern communication systems, a ready access to central offices in this country and in London.

The Minister will be well aware of the major input that ODA has made to the new South African Government through various advisers on the needs of the new government of that country. It is a country with enormous potential but it also has enormous problems to solve.

Therefore, British aid, through ODA, is well applied and very much appreciated. But there are certain areas in which I believe greater emphasis is needed. The first question is: is there enough of it? I fear that there is not. I do not believe that there will be enough at our present rate with the growth in human population that we shall see over the next few decades. The world population is projected to grow at a massive rate to produce a doubling of the population to 12 billion people by year 2020 and, as has been quoted in this House in a previous debate, in the next 30 years we shall have to produce as much food as has been produced in the past 10,000 years. While it may be theoretically possible to do that, in present circumstances there are many constraints on that food production.

Therefore, apart from major projects such as irrigation and desalination plants, there is a need to provide at local level a means of bringing know-how to the peasants about agriculture, livestock management, health delivery, education and so on. There is a need also to apply what has been termed "sustainable development" and a proper appreciation of plants, soils, man and his livestock because some aid programmes have gone sadly astray and they have led to greater problems than they have solved. A good example of that is the Aswan Dam in Egypt. Again in South Africa, it has been estimated that every tonne of human food that has been produced has resulted in 12 tonnes of topsoil being eroded through poor management and poor appreciation of the synergy required between animals and their herbage.

The second need is the increased need for training of individuals. We need to train individuals from overseas in this country, but we need to train them also at regional centres in their own countries. It may then be possible to train other people, via those regional centres, in the basic aspects of delivering aid to their countries.

Finally, there is a need for increased research along those lines in order that we may deliver our aid more effectively and efficiently with the long-term aim that those countries may eventually reach the point at which they can stand on their own feet. Surely, that must be the long-term effort and aim of overseas aid.

5.18 p.m.

LordMonkswell

My Lords, I must join with others in thanking my noble friend Lord Judd for introducing this debate. As we all recognise, he is an unrivalled expert on the subject.

While I join with others in making a plea to the Government to increase the aid, development and support which we give to the third world, I wish to take this opportunity to argue for something rather more fundamental.

First, I should like to tell a couple of little stories which may help to illustrate my theme. Shortly after I started work, I was approached by a shop steward about joining the union. He explained to me that as he was reaching the end of his apprenticeship, he was approached by his boss who said, "I will pay you a little bit extra because I know that you are a hard worker but do not tell anyone else or they will all want extra". That went on for a few years until my colleague suddenly discovered that he was in fact being paid less than everybody else. He forthwith joined the union and thereby ensured that he was paid the proper rate for the job. I have been a union man ever since I heard that story.

The second little tale is of Henry Ford. He was showing the leader of the American auto workers' union round a new car plant. He said, "In a few years, cars will be produced entirely by machines and I shall not need your members". The response was, "If my members are out of work, then who will buy your motor cars?"

We live in an interdependent world. If we beggar our neighbours, we all suffer. In the past 20 years of monetarism and beggar-my-neighbour policies, we have all been impoverished. As the terms of trade of the producers of raw materials mainly in the third world have seen their incomes fall, they have been unable to buy the products of the industrialised first world. We have over the past 20 years seen a rise in poverty and famine and the breakdown in social order in the third world. The most recent devastating example is Rwanda. We have also seen the inexorable rise in unemployment that has so disfigured our society and caused devastating, soul-destroying anguish for millions of our fellow citizens. We must recognise that no one benefits by driving down the incomes of already poor people; on the contrary, we all lose.

So how can we do something about our joint problems? Yes, we can give more aid; indeed, any funds transferred from rich to poor will help, but it is no substitute for paying the rate for the job. In Britain we have some of the most significant commodity exchanges related to world trade. The suggestion that I am making is that we use those exchanges to say to producers, "Instead of driving your prices down, we want to work with you to help you work with your fellow producers to agree a reasonable price for your produce"; in effect, to recognise the trade unions of producers: to abolish the secrecy that enables consumers or purchasers to gain a short-term advantage by playing off one producer against another and to develop a fair system that balances the advantage of producers with the advantage of consumers and, on the basis of free exchange of information, of prices and costs, to arrive at a system of exchange that is fair. That will involve a radical change in the way business is done. It should involve a radical shift in resources. But what we must accept is that in the process of dealing fairly with our neighbours on the world stage they will deal fairly with us. In my experience, if you treat people reasonably, they will treat you reasonably in return. Let us treat our neighbours on the world stage in the way in which we would like to be treated and, in the process, create a better world for us all.

5.22 p.m.

Viscount Craigavon

My Lords, in the second half of my speech I was going to deal with the subject of population. However, I should like, first, to refer to a few words that the noble Lord, Lord Judd, used in his speech to highlight his concern with the population problem. I believe that he said that there is a major population crisis. For those who have not been in the field, it is interesting to hear such words from the noble Lord; it is an alarm to which we should pay attention. I believe that he then asked for more effective population policies, a request with which I obviously agree. But, to be fair to the noble Lord, he went on to put in context what he was saying by talking about relative resources as among this country, the West and the third world and the situation as regards social justice. That is a balance which we should all try to achieve when discussing the issue of population.

The noble Lord, quite rightly, managed to involve many NGOs in the debate. Indeed, we all received very interesting briefing which has allowed us to understand wider and more detailed concerns than can be expressed in today's short debate. I should especially like to pay tribute to the quality and standard of the briefing material from Action Aid. As I said, I shall talk later about population. But, first, I should like to say that I agree with the thrust of many of today's contributions; namely, that development aid should be targeted more towards reducing real poverty.

I know that that is one of the main considerations of the aid organisation CARE of which I happen to have particular knowledge. I know that the organisation currently believes that one of the best ways to encourage social and economic development is the promotion of female education. That is obviously not a new idea, but it is part of a sustainable human development which provides a number of important socio-economic benefits in the most cost-effective way. Incidentally, and as is well known, it also has a marked effect on the number of children that women choose to have. I also share the view of CARE that further moves of the balance of funding away from bilateral funding would lead to less control and accountability for the ODA.

I hope that some of the NGOs which read the report of today's debate will accept that many of us at Westminster think that the health and population division of the ODA is perhaps the most important. If I may say so, both the Minister and her department have a good record on population matters. I hope that they will feel able to take the lead and seize the opportunity now before us which has been presented by two particular events.

The first, as mentioned by the noble Baroness, Lady Lockwood, is the 10-yearly conference organised by the UN; namely, the UN International Conference on Population and Development at Cairo in September, for which there have already been three preparatory meetings. Secondly, we have the effects of the enormous change of attitude brought about by the new American Administration.

I was slightly surprised to see the other day in a main news programme broadcast on television covering the meeting of President Clinton with the Pope that the only subject which was reported on in their discussion was their total disagreement on population. That reflects the importance of the subject. However, that agreement to disagree in such a public encounter clearly shows the evident gap which exists.

As is well known, the Vatican is lobbying for its position in the dialogue which is taking place in the run up to the UN Conference in Cairo. As I understand it, the conference will be setting a framework within which reproductive health assistance may be given to those countries and people who want it. No government or people are to be forced to accept assistance or practices against their will.

As is widely known, population services are now much more integrated with other medical services, and the direction in which we are now going, encouraged by the ODA, is to emphasise the policy of "Children by Choice". If I may say so, it was encouraging to hear the words of the noble Lord, Lord Soulsby, which put the problem in a wider context. In terms of the Motion of the debate, the words "growing needs" are reflected in the extent of the unmet need for family planning services—the extent of which has been confirmed in preparatory documents for the UN Conference.

We have heard much moving talk today of emergency aid and desperate levels of poverty; that is a vital and immediate concern. We have also heard about the longer-term concept of sustainable development. It is vital that, where appropriate, that includes contraceptive services offered in as wide a range as possible.

Perhaps I may ask the Minister a similar question to that posed by the noble Baroness, Lady Lockwood, regarding her position at the Cairo Conference. Can the Minister indicate whether she is optimistic at present about the outcome? Can she say whether, if, as seems likely, there is an impasse in prior discussions with the Vatican about wording, she will be prepared to stand up for her present position, together perhaps with the Americans? Further, can the Minster indicate what discussions she has had with the Americans on the subject?

Finally, given the context of the debate, I do not want to ask now for greater funding for this one area; but does the Minister accept in principle that to achieve what is possible and desirable in stabilising world population a considerably higher level of funding will be required over the coming years?

5.30 p.m.

Lord Beloff

My Lords, I think that the invitations from the noble Lord, Lord Judd, were rather widely spread. If he gives a strawberry party, the guests will only get seven strawberries each. In my case I did warn the noble Lord in replying that I might not say things which he would altogether welcome. In fact the debate has gone along slightly different lines from those that I expected. In particular I am glad that there was indeed universal tribute paid to my noble friend the Minister and her department, and a fairly general conviction that the more that was done through her and her department bringing into partnership the voluntary organisations, and the less that was done through multilateral agencies, the more efficient the use of aid would be.

The debate was given an unexpected twist perhaps by the noble Lord, Lord Greenhill of Harrow, but I do not altogether subscribe to the criticisms that had to be made in his absence because I have a feeling that we ought to take seriously the question of how aid fits into public policy generally. There may well be, as he indicated, some lack of enthusiasm for foreign aid among sections of the public in which case any government of any party which is bound to want popularity is bound to take notice of that.

One can say that those who take that view are mistaken, but it is undeniable that such feelings are held, and the reasons, I think, are fairly obvious. One of them is simply that the whole problem is so vast that it is difficult to take in. I think that the primary answer was that given by the right reverend Prelate the Bishop of Ripon; namely, that one cannot dissociate the fate of this country or of other western countries from what happens in the rest of the world. I would rather, in my crude way, say that one reason for the problems in those parts of the world that we are dealing with is simply premature decolonisation. That is something for which public opinion in the West was largely responsible and which put into power for a generation, as has been agreed, a number of people who not only did not do their best for the people whom they were ruling but who also built up in respect of totally unnecessary projects—civil and military—the debt which now hangs around the necks of their better and more competent successors.

Therefore we have been in this from the beginning and, after all, the historical view is not a terribly optimistic one because the times of troubles that have followed the break-up of empires have in the past lasted for centuries. Indeed we can see most recently in the break-up of another great empire—the Soviet empire —that very much the same kind of thing is happening in the outlying countries which are, if you like, joining the third world. I think that the noble Lord, Lord Judd, gave the current expectation of life in the third world as it is now defined. It is the same as the current expectation of life in what was the Soviet Union, even in Russia itself.

One consequence of such things has been the movement of population. If there is poverty, people will, if they cannot cope with it on the spot, seek to cope with it by flight. As all of us, even with the seas to protect us, are vulnerable to uncontrolled movements of population on a vast scale, the idea that putting a little more money in the pockets of one or other disadvantaged group in our own countries is anything like the equivalent of saving the world from mass anarchy and the mass movement of populations is, I think, a view difficult to defend.

It is not, I think,—listening to the noble Lord, Lord Soulsby, and others—difficult to see that we have within our grasp the techniques to make something of aid programmes and to help in averting these disasters. The difficulty is often—here again I shall offend—that we have to cope with long-standing prejudices that are difficult to eradicate. The most important one is, I think, the one mentioned by the noble Viscount, Lord Craigavon, and that mentioned in the important speech of the noble Baroness, Lady Lockwood; namely, that of the Vatican which has considerable clout, particularly in the Democratic Party in America. The Vatican has shown irreducible opposition to any serious measures to curtail population growth which, if unchecked, would probably undo all the rest of the good that we could do.

There are, of course, other prejudices. There is the tribalism to which the right reverend Prelate referred in relation to the conflict in Rwanda. There is also—this is a matter of great concern—the fact that countries which have stable and to some extent efficient governments ought to be able to deal with these problems very largely without aid. In India, for example, there is an indifference on the part of the superior castes to the sufferings of those on the pavements of Calcutta. There needs to be a major change in the outlook of India and other countries before those problems can be dealt with internally, as indeed they should. Good government has been listed on the ODA's list of priorities. Everything that we know suggests that this is a correct priority. The important thing is to give people the chance to reap what they sow and that may mean an investment of human resources beyond anything which we in the west have so far been willing to contemplate.

5.36 p.m.

Lord Desai

My Lords, first, I thank my noble friend Lord Judd for introducing this topic. I apologise to him for not being in my place when he began the debate. It is tempting to respond to many of the remarks which have been made during the course of the debate I shall begin by saying something about the relative importance of spending resources at home and abroad. That topic was referred to by the noble Lords, Lord Greenhill of Harrow and Lord Beloff.

I quite see that it would be politically suicidal for any political party to argue for parity in treatment between its local citizens and people abroad. But the contrast is rather stunning. OECD countries spend on average about 15 per cent. of their GNP on the poor. The figure may be higher or lower for the UK but I do not wish to go into that. Therefore the total of that expenditure would be £90 billion to £100 billion. If that expenditure was spread over all the people, it would be worth £2,000 per head. We give one-third of 1 per cent. of our GNP —about £2 billion—for the three billion or so people of the third world. That works out at about 65p per head. I realise that one cannot do too much but one has to remember that we are not a poor country. Indeed, if we are to believe the Government, we are getting richer and we are experiencing growth. Therefore there is no excuse for saying, "We are all short of money and therefore we should not be profligate". We have not been profligate at all.

Many attributes have been paid to the noble Baroness this evening. She will no doubt tell us that, although we spend only 0.3 per cent. of GNP, we spend it very well. I would say to that, "Good. Let us spend more money equally well". That would make me very happy. Across all the political parties there seems to be a reluctance openly and boldly to query the problems of international fairness. To that extent, the idealism that was prevalent in politics after the Second World War has disappeared. That is paradoxical, since we are several times richer than we were at that time.

One major change in the world, in addition to the fact that the Cold War has ended—and I must say how much I appreciated the comments of the noble Lord, Lord Deedes, on that subject—is that our own view of development has changed greatly. In the 1950s and 1960s, when I was studying and teaching development, it was thought that it was all about having money to invest in capital, growth rates of income, and so on. There were target growth rates, for example. We now realise that development has to be in the form of education, clean water, sanitation and so on. The basic needs which had to be fought for in the 1970s have now arrived centre stage, and quite rightly so. We no longer believe that having per capita income growing at X per cent. is enough. We want to make quite sure that people's lives improve in a substantial sense, in terms of life expectancy, infant mortality, clean water, sanitation and so on.

It is pleasing that there have been improvements in the world in that respect. Many noble Lords have cited the UNDP human development report. One important aspect of that report is that, again in contrast with the 1950s and 1960s, we no longer think that the poverty of the so-called third world is all the fault of the first world and the third world is a helpless victim. The human development report criticises equally the poor countries which find money to spend on armaments when that money should be spent on education and health. It makes its point on a case-by-case basis. In the case of India and Pakistan the money spent on Mirage jets or MiGs is enough to pay for education or clean water.

One has to recognise that often poverty is not so much a case of lack of resources or the level of resources but of the distribution of resources among different priorities. We should be able increasingly to argue boldly that priorities are wrong and have been wrong, both in our policies in the past and in the practices and policies of the poor countries. It is changing those priorities and shifting attention from the more glamorous spending to the more humble and development-inducing spending that is important.

Since time is short perhaps I may comment briefly on a point raised by the noble Lord, Lord Beaumont of Whitley. I do not believe that TNCs are the great villains of the world. Nor do I agree that GATT is about to do all the horrible things that he suggested. I do not have time to go into detail, but I should like to say this on the topic. It is surprising that people who press the idea of free trade strongly on the third world do not at home reform their own agricultural subsidies. The common agricultural policy remains; the vast subsidy to American farmers remains; the subsidy to Japanese farmers remains, to the detriment of third world agriculture. Nothing is said about that. When it comes to the multi-fibre agreement there is great reluctance on the part of developed countries to follow their beliefs and opt for free trade.

I believe that we have to overcome the asymmetry. To the extent that it is possible, we should correct the aspects of our policy—not necessarily concerned with aid as such—which are obstacles to development abroad.

5.44 p.m.

Lord Bonham-Carter

My Lords, it is with great pleasure that I follow the noble Lord, Lord Desai, and the noble Lord, Lord Beloff, both of whom in their speeches identified areas of policy in the deployment of aid which are essential to its effective use. My noble friend Lord Beaumont of Whitley said that it went without saying that we all thanked the noble Lord, Lord Judd, for initiating the debate, and then proceeded to say it. I say so too, and so say all of us. We are grateful to the noble Lord and it has been an interesting debate.

Perhaps it would be useful if I said what I am not going to say. I do not propose to talk about the percentage of GNP which we devote to aid, nor to rehearse the arguments about multilateral and bilateral aid. Nor do I propose to engage in controversy about GATT. Nor do I propose to talk about debt, crucially important though that is in the whole spectrum of the third world.

The noble Lord, Lord Deedes, talked about certain failures in our policies towards aid in the past which flow into the present. I should like to concentrate on where there has been success. I believe that in identifying the causes of those successes we may learn lessons which are of application above all in Africa, which has been the continent about which most noble Lords have spoken.

When in December of last year we discussed European Union policy towards aid I asked two questions: first, what was the most effective use of aid; and, secondly, why had certain East Asian countries taken off whereas that had not happened in general in Africa. On the basis of no very sophisticated evidence, I concluded that one factor stood out. That factor was literacy, which in the East Asian countries way back in 1960 was of the order of 80 per cent. and in Africa was, and is, of the order of 40 per cent. I therefore concluded that aid should concentrate heavily on education and, in particular, on the education of women, as the noble Viscount, Lord Craigavon, mentioned.

I shall return to the first of those two topics today. I do not think that I shall have time to deal with the topic of the education of women, but the noble Baroness, Lady Chalker, does not need any encouragement to take that aspect of aid seriously.

I have been looking at certain studies of the East Asian miracle, and in particular at the World Bank's report The East Asian Miracle: Economic Growth and Public Policy and a critique of that report entitled Miracle or Design? published by the Overseas Development Council of Washington DC. Those two documents seem to me to be of outstanding importance in developing policy in this particular area because they provide an analysis, often highly controversial, of the factors lying behind the East Asian miracle. In the time at my disposal I can only summarise the conclusions I draw from those two documents.

The documents confirm the importance of primary education and literacy. Before take-off, all the countries in question—the East Asian countries; the "four tigers" and those which have joined them—had high primary enrolment and high literacy rates. That confirms my original intuitive conclusion that we should concentrate heavily in our aid programme on education, and above all on primary education rather than secondary education, higher technical education or university education.

That is not the case. This year's ODA report, as I interpret it, reveals that £106 million, or 17 per cent., of the bilateral budget was spent on education, but the majority went to universities, technology centres, secondary education and teaching English. Therefore, a relatively small proportion went to primary education, which I consider the most important. The World Bank survey for 1989–91 shows that in 15 of the 25 countries covered there had been a decline in expenditure on education and that that expenditure was still focused on secondary and higher education. In Bangladesh the 10 per cent. of students who reach university receive 72 per cent. of the educational budget. It is very important to learn and act upon that information.

Secondly, a crucial prerequisite is related to institutional arrangements—what the noble Lord, Lord Beloff, and the ODA call good government. If I have time I may return to that subject.

Thirdly, a degree of economic equality which existed in East Asian countries was an important factor. In both Taiwan and South Korea radical land reform has made a substantial difference to income distribution. The existence of large landowners, your Lordships will be alarmed to hear, would appear to be an obstacle to economic progress.

Fourthly, what is known as shared growth is an important factor—that is to say, a wide distribution of the benefits that growth brings. In most of those countries that takes the form of universal education, a massive programme of public housing in Hong Kong, land reform and the encouragement of small and medium-sized businesses. Underpinning all those factors were economic stability and governmental institutions capable of carrying out consistent policies over a period of time. Hence the most controversial conclusion into which these reports seem to lead one ineluctably was that in almost every case the governments who had presided over the economic takeoff had been, first, according to our standards, authoritarian, and, secondly, had pursued an industrial policy involving systematic government intervention in the market over an extended period of time.

That is contrary to popular doctrine in this country but it is difficult to avoid the conclusion. The studies by the World Bank were initiated under the initiative of Japan because the Japanese said that their take-off had not been according to the rules followed by the World Bank: there had been consistent government interven-tion, government subsidisation and government industrial policy throughout the crucial years.

The Anglo-American theory, if I may so call it, is based on the proposition that economic and political reform march hand in hand. I have long argued in connection with Central Europe that there seemed to be no empirical or historical evidence to show that that was true. Historically it was almost always the case that economic reform had been introduced by authoritarian regimes, whether they were colonial, as in the case of Singapore and Hong Kong, oligarchic, as in the case of Taiwan, or by an occupying power, as in the, case of the United States in Japan.

Furthermore, it has always seemed to me unlikely that people would vote twice in a democratic constitution for the immediate consequence of economic reform which simply leads as an immediate consequence to high unemployment, high inflation and a sharp drop in industrial growth. Recent elections in Central Europe seem to confirm that that is the case. In every case they swung away from the rather doctrinaire. laissez-faire governments to more conservative/ socialist governments, if I may so describe them.

Let me make clear that those conclusions are my own and have had to be expressed extremely crudely in the time available. However, I emphasise that the conclusions of the two documents—they are often in disagreement with each other—seem to me to represent the result of an exercise which is extremely important and worth while. We need to identify the factors which lie behind take-off. We need to know what has happened where that has been achieved successfully and whether those lessons can be applied elsewhere, such as in Africa.

Two things need to be said: first, important though primary education is, it does not produce quick results. One has to wait 10 or 15 years before it feeds through the system. Secondly, if one looks at the establishment, the market or capitalist economy, in these countries, it is also an extremely slow process. In one of the books that I have read, it has been argued that the foundations of a quasi-capitalist market economy in India were laid in the 19th century. In Africa, where primary education is very poor and where the traditions of a market economy are almost non-existent, we cannot expect rapid change even if we pursue the most imaginative and well-found policies.

5.55 p.m.

Lord Rea

My Lords, the impression that has emerged from today's interesting debate, for me at least, is that nearly all noble Lords who have spoken are fully aware of the complexity, size and importance of world development. However, most speakers were concerned that the Government were not giving the issue a high enough priority. I think that the only major dissenter from that view was the noble Lord, Lord Greenhill. I hope that the weight of the arguments of the other speakers, in particular of the noble Lord, Lord Beloff, and perhaps my remarks, will persuade the noble Lord otherwise.

The criticism that the Government do not allow enough finance for aid is not a criticism of the noble Baroness's department as such, which has deservedly come in for a good deal of praise this afternoon. Rather, the criticism is of the diminishing share of the cake which her department receives. I might add that that is indicated by her exclusion from the Cabinet—a wrong which a Labour Government would put right when her successor takes office.

We are also very concerned about how the noble Baroness's control over her share of the cake is diminishing, as multilateral and European Union agencies take an increasing share, and Eastern Europe appears also to be receiving increasing aid from the budget of her department although originally, as my noble friend said, it was understood that it would be additional money.

Like my noble friend, I should be grateful if the noble Baroness could make quite clear what impact aid to Eastern Europe will have on the funds that she has available for other overseas development. I can perhaps accept that as an investment there may be a more rapid return on money spent in Eastern Europe because, to follow the argument of the noble Lord, Lord Bonham-Carter, the educational level of those countries is extremely high. Literacy is almost 100 per cent. When they get their house in order, I think that we shall see some good markets for our industries and those of other countries opening up there.

On the topic of aid money passing from her control, I fully realise that much of the money going to multilateral agencies is well spent and essential. I should just like to know that Britain plays its full part in the administration of those multilateral agencies and in the decision-making process, and, as my noble friend said, this is co-ordinated with the bilateral programmes of this country and others. It is a little disturbing that one multilateral organisation which does exceptionally good work in meeting basic human needs, UNICEF, has had its core funding from the United Kingdom reduced by £1 million this year when in fact the demands on the services that it gives, in particular in emergencies, has greatly increased.

Several noble Lords, particularly my noble friends Lord Judd and Lord Desai, have quoted from the United Nations development programme report which has just come out. One of the rather disturbing figures it gives (which was quoted by my noble friend) is that the UK gives a lower proportion of its aid budget to human priorities such as basic education, primary health care, safe drinking water, adequate sanitation, family planning and nutrition than many other countries. Perhaps the noble Baroness could tell us why the figure is so low when other countries spend twice as much; a higher proportion of their aid is in this category. That figure differs rather from the ODA's own figures which were given last autumn, simultaneously with the lecture by the noble Baroness at Chatham House, when the ODA introduced a new system of monitoring the allocation of aid according to priority objectives, known, I gather, as PIMs, policy information markers. Last year, according to the ODA, the sector promoting human development, including education, health and children, by choice received 26 per cent. of the ODA budget, not 6.6 per cent., as reported by UNDP.

The noble Lord, Lord Bonham-Carter, put his finger on it, when he said that the ODA's figure is somewhat misleading. As he said, from a total education budget of £115 million, only £5.4 million was spent on primary education. Perhaps the noble Baroness could look at the discrepancy between the figures.

The UNDP report calls for a new and better reporting system of aid, giving more details of the distribution by target groups in human priorities as well as the military spending of both the donor country and the recipient country, linked to aid flows. That would be helpful for those planning aid programmes. I hope that the noble Baroness agrees.

I am sure that in her reply she will refer to emergency aid which other speakers have mentioned and to which this country has made a sizeable contribution, quadrupling or quintupling its contribution in the past four or five years. How is the noble Baroness protecting development aid money from the inroads which the increasing number of emergency claims must make on it? Like her noble friend Lord Deedes, I know that the noble Baroness would like to be able to anticipate emergencies and intervene, if possible before a serious crisis occurs. But that is not easy, as Rwanda and Somalia have shown.

Can she report any progress in the creation of the much discussed early warning system for the United Nations? It should allow early intervention if it is to function properly. I know that we are discussing aid and not peacekeeping, but conflict is more often than not the cause of humanitarian crises. Can the noble Baroness say whether there is any prospect of the standing United Nations contingent suggested by Boutros Boutros Ghali in his Agenda for Peace ever being formed? It might have saved hundreds of thousands of lives in Rwanda if it had been in existence and ready for immediate dispatch there.

Moving from the humanitarian aspects of aid, I should like to consider aid from the point of view of Britain's self-interest. It is essential for our continued survival as a developed industrial nation that we export, and that markets are found for our products. At present many countries—especially in Africa—are unable to buy their proper share of goods on the world market. As has been pointed out by noble Lords, there are two main reasons for that. First, their chief export commodities are now falling to rock bottom prices. Secondly, their international debt has reached levels which, in effect, have made many countries bankrupt. I think that all noble Lords would agree that aid cannot take the place of trade, and even in very poor countries the value of trade greatly exceeds aid flows. But properly directed aid should surely be able to help less developed countries to diversify their economies so that they are not dependent on single commodities, usually unrefined products, for foreign exchange. Our aid should be directed to allowing them to export an increasing proportion of value added products—chocolate instead of cocoa, furniture instead of timber—and to manufacture more of their own basic tools which they need for agriculture, transport, water supplies or housing, instead of importing them.

I am not sure that GATT will be helpful to developing countries. Nor are many non-governmental organisations and my noble friends Lord Judd and Lord Desai, that GATT will be helpful to developing countries. Tariff barriers to semi-manufactured goods entering Western industrialised countries will remain high for a number of years. The Multi-Fibre Agreement will only be phased out slowly and the main benefits will not occur until nearly a decade after GATT comes in. All less developed countries will be expected to lower their tariffs so that locally made products will have to compete with cheap imports. Nevertheless, I am sure that our aid—especially our technical assistance which is so valuable—must be aimed at allowing less developed countries to take off in the way discussed by the noble Lord, Lord Bonham-Carter, as the Far Eastern tigers have done. I follow the noble Lord in saying how important it is for basic education and basic human priorities—i.e., investment in human resources—to be part of that process, before they reach the stage of taking off.

Sadly, World Bank loans have so far too often been directed to increased production of basic commodities to service debt, which has accentuated the first problem of low commodity prices. I am glad to read that the World Bank now says that it recognises that the alleviation of poverty and the investment in human capital—for example, health and education—give extremely good returns. We shall be watching the results of the new attitude.

I should have liked to examine much more fully the impact of debt not only on the developing countries but its boomerang effect on our economy, which was discussed by my noble friend Lord Monkswell. It is slowing our recovery from the recession and keeping unemployment at a higher level. To cancel or forgive debts is not a new concept; it played a major part in the recovery from the recession in the 1930s.

I wonder whether the United Kingdom and other members of the European Union and G7 can bring stronger pressure to bear on Japan, who appears to be the main objector to a liberal debt reduction policy— Trinidad and beyond, as other speakers have called it. It has been suggested that the sale of surplus gold stocks of the International Monetary Fund could be a possible source of finance for this. But even if debt were reduced to manageable levels, large amounts of capital will still be required by the poorer nations.

Finally, I wish to make a suggestion as to how this problem might be faced. A number of authoritative figures, starting with Willy Brandt in the early 1980s, now a former president of the World Bank, as well as the late right honourable John Smith, have suggested that the time is now ripe for a carefully targeted new tranche of special drawing rights to be allowed, of some 10 billion to 12 billion dollars, to finance the recovery of the poorest nations of the world. The last time I suggested that the noble Baroness turned it down, but there is now surely enough accumulated capital in the financial centres of the world to allow for that transfer., which would act not only as a means of hoisting several nations out of poverty and bankruptcy, but also would act at the same time as a boost to the whole world economy, as it is fed back in terms of trade and export orders.

6.10 p.m.

The Minister of State, Foreign and Commonwealth Office (Baroness Chalker of Wallasey)

My Lords, I welcome this important, fascinating and highly committed debate. I thank the noble Lord, Lord Judd, for initiating it, and all noble Lords who have contributed to it. I thank all those who have given generous praise to the ODA, and I thank particularly my noble friend Lord Soulsby; given his experience, to make the remarks that he did make was a double plus for the ODA. I also thank so many of your Lordships for your very kind personal remarks. I shall only say that I do my best with what I can get.

The problems of developing countries and how we respond to them are issues which rightly demand a concern that goes far wider even than this debate. Nevertheless, I hope that the debate will be widely read. I shall respond in a moment to the issues that were raised. But, first, I should like to make two underlying points.

The first is that the circumstances and needs of developing countries vary very greatly. Secondly, our assistance must therefore be tailored to the conditions and priorities of each individual country. The whole of our overall aid strategy, the way in which we pursue the seven priority objectives that I set out in our debate on 2nd March, seeks to reflect this point.

The noble Lord's Motion that is before us talks about, the growing needs of the Third World". I do not suggest that the needs of developing countries are anything other than essential. But I firmly believe that it would be better to describe them, as many noble Lords have done in this debate, as changing needs.

There is increasing differentiation in the experience of developing countries. There is no longer a single third world. As my noble friend Lord Selsdon and the noble Lord, Lord Ennals, said, it is high time that we stopped using that phrase. The developing countries have a great range of experience, from the enormous success which the right reverend Prelate the Bishop of Lichfield described in Uganda to continuing and tragic failure —repeated failure—in too many countries.

It is also wrong to think of the developing world solely in terms of needs, or of decline and difficulty. That does not reflect the reality. Overall conditions in developing countries have improved. Their people are better educated and they live longer, as the noble Lord, Lord Judd, said. But, my goodness, there are so many big, big problems. After all, AIDS was not the problem 10 years ago that it now is. It is ravaging countries in many parts of the world.

We know that the picture is not uniform. There were countries in East and South-East Asia that were poor 30 years ago by any measure, as the noble Lord, Lord Bonham-Carter, said; some now have incomes as great as those in OECD countries. In South Asia there has been considerable progress, with a growing commitment to economic reform. Even in Africa the picture is not uniformly bad. Over the past 25 years Botswana has had the highest per capita growth in the world. At independence it was the second poorest country in sub-Saharan Africa. Now it is the third richest.

Aid has played a vital part in these successes, supporting key areas of development. But some of those countries have now graduated out of needing our aid. That is a good thing. For instance, aid is less than 1 per cent. of the income of the Asian developing countries. The growing flow of private finance to developing countries is a significant and welcome change that has taken place in recent years. At a time when most donors face constraints on their aid budgets, these private flows play an increasing and important role in financing development. In India, for example, foreign investment has increased eightfold in the past financial year.

The noble Lord, Lord Judd, referred of course to many of the very dark sides of this particular picture. I agree with him that there are countries where poor people are in a really desperate situation. Over 1 billion people in the world are in absolute poverty. They are poor in the sense that they cannot attain even the most basic standards of life which we had 40 years ago and earlier. Many suffer not only from desperately low incomes but also from natural and man-made disasters, on which many noble Lords have spoken tonight. Many rely heavily on aid, but want to rely on trade. So we have a moral duty, as the right reverend Prelate the Bishop of Ripon said.

For that reason I regret that I cannot agree with the noble Lord, Lord Greenhill, in what he said. We have a development budget that is less than 1 per cent. of all government expenditure in this country. As the noble Lord, Lord Desai, put it, our £2.1 billion budget is very tiny compared with the £90 billion that we devote to needy people in Britain. I am not saying that they should not get it. Of course they should, and we should be helping them. But let us see the figures in true comparison.

Our strategy to help the developing world must reflect the changes and the different experience of developing countries. A central factor in our strategy is to focus on where and how to achieve the maximum impact. Here I want to turn to a remark that was made by the noble Lord, Lord Judd. He commented that there had been no White Paper for 19 years, and asked why we were not going to publish one. I ask the noble Lord whether he will please read the ODA departmental report and all our other publications. I think that he will find that the Government's strategy is very succinctly laid out and that it explains in detail just why our policies to support and encourage good government and economic management in developing countries are so important. As he said, I set out that strategy in my speech at Chatham House last October. I give anything up to 50 speeches a year, and I know that the noble Lord does not like ploughing through them. But we are trying to make sure that people know where we are going and why we are going in that direction. Therefore, I think that the noble Lord has a little more reading to do. It is not necessary, I believe, to go to the expense of a White Paper. However, enough has been said. I shall go on publishing information, because I happen to believe that it is right for the aid programme and its recipients that others who are far better off should know just what the problems are.

When I set out the priority objectives last October, I said that they were all aimed at focusing our aid on the key factors for sustainable development. It is one thing to devise a list of objectives; what is important is to turn them into action. That is why, as the noble Lord, Lord Rea, said, we have a computer-based system to help us measure our performance against our seven key objectives. The outcome of that exercise will be made public.

Another element in our strategy is focusing our resources where they are most needed. Many noble Lords referred to the poorest countries and the poorest people. Over 80 per cent. of Britain's bilateral aid goes to the poorest countries, which have little or no access to private finance. That is a higher proportion than for any other G7 donor. But I am working on the others to improve the proportion of their aid that goes to the poorest. Britain's 10 largest aid recipients are low-income countries in Asia and sub-Saharan Africa. All our aid to them is on grant terms. So Britain avoids adding to their debt burden.

Our primary concern is the reduction of poverty. I shall comment in a moment on the wider picture of trade and debt relief to which my noble friend Lord Selsdon and so many other noble Lords referred and which is of great importance. We need direct action in favour of the poorest, but that is not enough on its own. Britain's strategy consists of action at many levels: targeted projects and safety nets which raise the living standards of poor people; making sure that there is support for health, education and other services which benefit the poor—and I shall return to education and literacy in a few moments; and help with reforms that help the poor to earn more in agriculture, manufacturing and trade. The sort of reforms that show them how to make a success of business are all part of the programme, as are the reforms which make the whole economy healthier and faster growing.

We try to provide well-targeted emergency aid to relieve the immediate plight of those suffering from natural or man-made disasters. I could not agree more with what my noble friend Lord Deedes said when he talked about prevention, and we have been very active in encouraging others that more should be devoted to disaster prevention.

An example of where our aid—as the right reverend Prelate the Bishop of Lichfield and the noble Viscount, Lord Falkland, mentioned—has been very effective indeed is in Uganda. There has been substantial balance of payments support since 1986, amounting to £18 million for the last financial year for which we have full figures, 1992–93. We have helped support their economic reform and we have helped finance the purchase of essential imports. We are providing capital aid and advice to help rehabilitate the system of power generation and distribution. We are providing technical co-operation to help improve the quality and accessibility of health care, including the all-important reproductive health care and contraceptive services, as well as a major programme to help them with their enormous AIDS problem. We help with civil service reform, training and technical assistance for the judiciary and with the demobilisation of the armed forces. So we have made a pretty major contribution to help the remarkable recovery that Uganda has made under President Museveni after a decade or more of dictatorship and mismanagement that had brought the country to its knees.

The better off developing countries have greater access to private and semi-concessional finance to help with their development. Here our strategy is carefully to target our interventions, to provide advice and know-how and to fill skill gaps in areas central to further development. We try to be flexible and effective in the help that we give to support the transition to market economies and plural democracies, whether it be in Africa, Eastern Europe or anywhere else. These interventions are low-cost, but they are very effective.

We seek to tailor how we deliver our aid, in some cases using bilateral channels—for example, working with British consultants and companies—in others, working with multilateral agencies, recognising their ability to mobilise the critical mass of finance. As so many of your Lordships have done—particularly my noble friend Lady Macleod of Borve—I want to pay a particular tribute to the work of the non-governmental organisation community. My confidence in the work of NGOs is reflected in the growing amount of aid that we channel through them, which has more than doubled in just three years—from £65 million in 1989–90 to £147 million-plus in 1992–93—and it will be even greater when the 1993–94 figures come out. They have done some of the best work under the most difficult circumstances, and they are involved in a growing number of fields, including family planning, education and all the very basic things that these poorest countries need. It would be easy to make a speech for 20 minutes just about the excellent work of the British NGOs, but I think they know that they have my confidence, and it is clear from the debate tonight that they have your Lordships' confidence.

Our support for development is much wider than just the aid of which so many have spoken. This country has been the most active of all in pushing for further action to relieve developing countries of their burden of debt —a matter mentioned by the noble Lords, Lord Judd and Lord Redesdale, the right reverend Prelate the Bishop of Lichfield, the noble Lord, Lord St. John of Bletso, and many others. The Trinidad terms, which my right honourable friend the Prime Minister developed in 1990, have so far benefited 22 of the poorest, most heavily indebted countries. I can assure noble Lords that we are taking every opportunity to press other creditors to improve these terms and to provide more substantial debt reduction for the deserving countries so that they have the opportunity to graduate from the rescheduling process.

The United Kingdom, of course, was also in the forefront of working for a satisfactory outcome to the Uruguay Round. This is critically important. I believe that, while the Uruguay Round represents opportunities to all countries, we have to make sure—as the OECD/World Bank report concluded —that the developing countries should benefit from this round. That in turn means making sure that those developing countries do not have their situations worsened by continued protectionism, or an intensification of protectionism, among developed countries. There is a lot of work to be done. The OECD/World Bank study concludes that the proposed liberalisation of trade in manufactured and agricultural products will raise incomes in non-OECD countries by over 78 billion dollars per year. I believe that figure to be an underestimate.

My noble friend Lord Selsdon spoke about the wider picture, and the noble Lord, Lord Rea, asked for help to enable business to start up, which we provide in a whole variety of ways. One of the things that the United Kingdom does better than many other countries is the provision of private investment. In 1992 British private investment was about £1.7 billion, more than half the overall European Union total. Only the United States and Japan do more than we do. This is essential if there is to be increased trade and trading opportunities for the developing countries.

This has been a very interesting debate Many, many issues have been raised, and I hope that noble Lords will forgive me if I cannot touch upon all of them. I seek to touch upon those which have been mentioned most frequently and which seem to me to be the most important.

When noble Lords were speaking with pride of the improvement in Uganda, several noble Lords raised the big problem that Uganda has with its multilateral debt. We have of course sought to take as much action on bilateral debt as we can, and full Trinidad terms would be of great help to Uganda because Uganda would be one of the first beneficiaries if full Trinidad terms were agreed, and that would then release more money for it to service its multilateral debts and its other needs. There is a lot to be said on this issue, and we are working with the Ugandans. I hope that the second ESAF, under the enlarged facility to which we have contributed quite generously, will be a possibility because Uganda is following its adjustment programme. We hope that it will continue to do so, and I shall be visiting there next month to discuss all these items.

Another issue that has been raised in this debate— most notably by my noble friend Lord Blake—is whether we get value. Do we evaluate? Do we learn? This is a most important point because every NGO and trust working in the developing world knows how critical it is to get full value from what it spends. We have an evaluation department—quite independent from spending departments—which makes use of external consultants to produce studies and to learn lessons. Our success ratings are quite good. We still make mistakes, but, my goodness, the feed-back of evaluation results are most important and very valuable. Certainly we will go on doing this, and I can assure my noble friends Lord Deedes and Lord Soulsby of Swaffham Prior that we have no intention of letting up on the quality of the projects we undertake, or indeed of the needs of these people.

We have had an interesting bash again about the UN 0.7 per cent. Just let me say this. We do not have a timetable, but we retain it as a target. We have been averaging 0.3 per cent. over recent years; in 1992 it was 0.31 per cent. I must say that I noted very carefully that in the recent Socialist European manifesto there was no commitment by a future Labour administration to move towards 0.7 per cent. Perhaps they think it will be less difficult for them, given the rate at which GNP might fall under their ideas for economic management. I tease slightly, but the underlying point is there, as the right reverend Prelate the Bishop of Ripon said, because the smaller the total, the greater the percentage may be.

The noble Lord, Lord Rea, asked me about the impact of Eastern European spending. Most of that is in forms of education, as I am sure he knows. Indeed, it is a plus for Britain and a plus of which we should not be ashamed. We are doing our very best to make sure that, when we allocate funds, Africa and Asia continue to be our major priorities. There is no lessening of our commitment to the traditional developing countries; nor is there any conflict between our aid objectives in the emerging countries as opposed to the developing countries.

As the noble Lord, Lord Bonham-Carter, said, there is need for increased attention to the primary sector of education. We are already actively pursuing this in Zambia and some other countries. We are switching attention from the secondary to the primary sector. It means in-service training for up to 15,000 teachers in Zambia in the primary sector. We are working on a major new primary education package, which I know that my noble friend Lady Macleod will be glad to see, in Malawi. In Andhra Pradesh we have another major programme. We are working with the countries concerned to get the inputs into primary education as effectively as possible.

The noble Viscount, Lord Craigavon, my noble friends Lord Soulsby and Lord Beloff, the noble Lord, Lord Bonham-Carter, and, if I may say so, in her first-class speech the noble Baroness, Lady Lockwood, made reference to population, family planning and its essential nature. In 1992–93 we spent over £100 million on health and Children By Choice programmes. We have increased that substantially already and we hope to go on doing so. I shall be making a series of announcements on further help for population and our help for the Cairo conference at a specially convened meeting at the Royal Society on 11th July. I can confirm to all those who asked that we are actively working with others to ensure wide support for the Cairo action plan. While I am not always an optimist, I can assure noble Lords that we are working with, and on, the Vatican, if I may so put it. We understand the problems and hope to achieve a good, united outcome. But that underlines the essential nature of education for women. Where women are better educated, it is easier to enable them to control their family size and spacing.

The right reverend Prelate the Bishop of Lichfield asked me about the role of Africans in solving conflicts. We are already doing all that we can to support such initiatives. Some of them are being led by the Africans themselves. Presidents Mandela, Museveni, Moi and Mubarak are all involved in such initiatives. These initiatives are going quite well. I shall see what more can be done.

My noble friend Lord Deedes and the noble Lord, Lord Desai, talked about disaster preparedness. It is not quite so bad as my noble friend thought. Long-term development aid is helping to put countries into a better position to deal with the effects of natural disasters, such as the southern African drought. As many have said, the disaster in Somalia was, for example, the result of civil war and conflict and certainly not the result of the lack of an early warning system. Disaster preparedness is a situation which has improved greatly. As a department we are also deeply involved in the Decade of Disaster Reduction and attended the recent conference on that project.

In the end the policies of developing countries themselves are what make the real difference in determining whether those countries develop success-fully. They have to create a framework in which their families and communities can work to improve their lives. We have to help them to do it. We are making a substantial contribution to the process in helping those countries and their peoples to help themselves. We shall continue to do so.

6.34 p.m.

Lord Judd

My Lords, I should most genuinely like to thank all those noble Lords who participated in the debate. It has been a good debate and I warmly agree with the Minister that we should all hope that it will be widely read.

There have been some differences of opinion. But how on earth can we deal with the universal affairs of humanity and not have differences? But obviously in all parts of the House there is a genuine conviction that the issues that have brought us together should be on the central political agenda. There are no differences about that. I hope that this debate will have assisted in ensuring that they are given higher consideration in the future. Let me just assure the Minister that I always put her reports at the top of my priority reading list. I find them irresistible. It is because of the exceptionally good showing that she makes of a difficult situation that I should like to be behind her in projecting into the future what we ought to be doing together. That is the relevance of a White Paper.

In thanking everybody concerned, it would be very remiss of me—I am sure that all noble Lords who participated in the debate will endorse my remarks—not to thank the non-governmental organisations who have done so much to brief us for the debate. They carry the banner most valiantly and work in the front line all the time, bringing back the insights and experience in a way that perhaps nobody else can do and sharing them with us.

I have detected only one dissenting voice in the debate tonight. Again, there seems to be a coalition between the Minister and myself. That voice was that of the noble Lord, Lord Greenhill. I hope that, having heard this debate, he will cheer up and, having taken on board so much positive thinking about the importance of the issues and what can be done, that he will reconsider his rather gloomy conclusions. Poverty is not a British issue or an overseas issue. Poverty is an evil whether it is in Britain or overseas. We want to fight poverty and injustice wherever they are. The challenge is to get the act together overseas and at home.

Again, I am grateful. I hope that we shall be able to return to the subject before long. I always have immense difficulty in this particular role because I genuinely have the deepest admiration for the Minister and what she does. I hope that we in this House can get together and help her do still more, winning her colleagues to a real strategy for the future in the interests of humanity.

Motion for Papers, by leave, withdrawn.