South Africa: Development Programme (Hansard, 26 May 1994)

§ The Parliamentary Under-Secretary of State, Department of Employment (Lord Henley)
My Lords, the new South African Government have adopted a reconstruction and development programme. We and other donors are ready to discuss priorities for assistance.

§ Lord Judd
My Lords, with all our involvement in South Africa, our membership of both the Commonwealth and the European Union and our responsibilities as a Permanent Member of the Security Council, does the Minister agree that we have a special responsibility to ensure effective international co-operation with the South African Government in their plans? What are the priorities as seen by the Government? Do they include land reform and the building of a strong voluntary sector, as envisaged in the impressive European special programme of recent years? Above all, does the Minister agree that we must lead by example? As the South African people face up bravely to their future, the £100 million so far pledged is a pretty minimal start, especially when compared with the £234 million for one questionable dam in Malaysia.

§ Lord Henley
My Lords, on the latter part of the noble Lord's question, I do not believe that the £100 million pledged by my right honourable friend the Secretary of State for Foreign and Commonwealth affairs is a pretty minimal amount. I further add that, as 854 well as our own direct contributions through aid, both bilateral and through the Community, there is a considerable degree of United Kingdom direct private investment. I know that the noble Lord may not like to admit it, but I believe that private sector investment can often be of far greater use than anything that governments themselves can do.
As regards our objectives, they will include good government, especially public administration and police reform, education, health and small business development. We are obviously keen to discuss the priorities for aid with the new government as soon as they are ready. We will continue to work with South African non-governmental organisations where appropriate.

§ Lord Dean of Beswick
My Lords, is it not the case that in regard to the African continent, South Africa is one of the richest countries in basic materials and wealth which need to be exploited? Does it not follow that in addition to money, a wide reservoir of technical advice and specialist know-how should be made available to them on how to exploit the natural riches that lie below the ground?

§ Lord Henley
My Lords, the noble Lord is, of course, quite correct. South Africa is naturally a very wealthy country. It has a per capita income of the order of 2,500 dollars, but obviously there are wide disparities between those at the top and those at the bottom. We would certainly like to see growth in the income of the less well off.
I can give an assurance that all our bilateral assistance will be in the form of technical co-operation. We believe that South Africa must look to the private sector, international financial institutions and development finance organisations for most of its financial investment.

§ Lord Harmar-Nicholls
My Lords, will the Government keep in mind the risk that leading by example may be interpreted in South Africa as interfering with what should be local decisions?

§ Lord Henley
My Lords, I quite agree with my noble friend. That is why I was keen to stress that we are anxious to discuss the priorities for aid with the new Government of South Africa.

§ Lord Taylor of Gryfe
My Lords, will the Minister agree that South Africa is not in the same category as many third world countries in Africa? It has a reasonable infrastructure as regards economic develop-ment. Can the Minister give two assurances: first, that aid, bilateral and multilateral, which is being directed to South Africa will not be at the expense of some other countries in Africa which require considerable assistance? Secondly, may I have an assurance that the DTI is alerted to the importance of private investment to raise the standard of living of the people of South Africa and to encourage economic prosperity by partnerships and other initiatives?

§ Lord Henley
My Lords, on the noble Lord's second point, as he will be aware, I was keen to stress the importance of direct private investment by the United Kingdom. Our record is pretty good: in the developing 855 countries, something of the order of half the total EC direct private investment comes from this country. I am sure that my right honourable friend the President of the Board of Trade will take note of what the noble Lord said about encouragement from his department.
As regards whether money should come from other funds, obviously there are only limited resources available for overseas aid. We maintain a substantial aid programme, the sixth largest in the world. However, difficult decisions have to be made as to where the resources come from and where they should be directed.

Baroness Sharpies
My Lords, does my noble friend agree that there is a great deal of expertise already in South Africa in all the communities, whether black, coloured, Asian or white?

§ Lord Henley
My Lords, my noble friend is absolutely correct, but I believe that there are certain sectors where we can offer a great deal of assistance. That is what we have promised to do.

§ Lord Mackie of Benshie
My Lords, is the Minister aware that while ultimately the most important aid is investment in the development of employment and prosperity, the expectations of the newly enfranchised electorate are such that visible progress needs to be made? Probably the most important way in which we could help is in housing and improving the standard of housing. If we give aid to that, let it be in the form of a grant, not a loan.

§ Lord Henley
My Lords, as I made clear, most of our aid will be in the form of technical co-operation. As regards priorities, that is a matter for the South African Government. Their reconstruction and development programme provides a framework for their development policies in government. At the moment, it lacks detail but it envisages fairly moderate economic policies and priority for restructuring education and health. That will certainly form the basis of their discussions with donors such as ourselves.

§ Lord Astor of Hever
My Lords, is my noble friend aware that the South African Government are enormously grateful for the Molteno project which aims to teach basic literacy to black primary school children? It is funded by the ODA.

§ Lord Henley
My Lords, my noble friend is right to draw the House's attention to the Molteno project which helps many black primary school children, first in their indigenous language and then bridging into English. The ODA has supported the project since 1985. Phase 2 of our support began in April 1993 at a cost of £460,000 over three years.

§ Lord Judd
My Lords, will the Minister agree that precisely because of the relatively strong infrastructure in South Africa and the potential of that country, we can make particularly good use of an aid programme there, not only for the impoverished people of South Africa itself but because of the contribution which South Africa will be able to make in the future to the regeneration of the entire African continent?

§ Lord Henley
My Lords, I think that for once there is nothing with which I could disagree in the noble Lord's remarks. I am prepared thoroughly to endorse them.

§ Viscount Brentford
My Lords, is my noble friend aware that timing is important? Will he ensure that the South African Government are encouraged to look at priorities reasonably quickly? It is important that much development takes place in South Africa before the next elections and the matter should not be allowed to drift.

§ Lord Henley
My Lords, I am sure that the South African Government themselves will be aware of the importance of such problems, but it must be a matter for the South African Government to decide on their own priorities for development and reconstruction.