HL Deb 10 December 1998 vol 595 cc1077-96

6.1 p.m.

Viscount Montgomery of Alamein rose to ask Her Majesty's Government what progress has been made towards alleviating the devastation caused by the recent hurricane in Central America.

The noble Viscount said: My Lords, it is a great pleasure to welcome the noble Baroness, Lady Amos, who is, I believe, to answer a debate for the first time from the Front Bench as a Minister at the Department for International Development. As this is an Unstarred Question, perhaps I may thank all those who are to speak in the debate on this important subject. We have considered it before, in a small amount of detail, but it is good that we have the opportunity to look at it again at this crucial time.

As your Lordships know, in the 25 years following 1965 this small group of countries suffered a great deal from internal and external conflicts. But over the past 10 years we have seen the restoration of democracy and, as a result, peace has returned to the region, which is so important for the reconstruction of their economies. When all seemed to be going well, they were suddenly struck by this catastrophic natural disaster. It is difficult for us to envisage the degree of the catastrophe. When we last discussed this subject, we heard from the noble Baroness some detail of what had happened. Millions of people were left homeless; thousands of kilometres of road were destroyed; and hundreds of bridges collapsed. The infrastructure of the whole area, particularly of Nicaragua and Honduras, has effectively been destroyed, E1 Salvador and Guatemala having suffered to a lesser extent. Honduras, in particular, has suffered intense devastation.

When the noble Baroness previously spoke on this subject she indicated that Her Majesty's Government had made a rapid response. It is particularly opportune to mention the contribution made by the Royal Navy, which was most effective and clearly much appreciated by all concerned. But, however generous the response of Her Majesty's Government was at the time, clearly it was not enough and probably never could be enough. The situation is one of major devastation from which it may take many years to recover.

It is interesting to hear what has happened subsequently. The Department for International Development has sent a mission to the area and we look forward to hearing about what they find out and what more can be done.

In the short time at my disposal, I should like to refer to two issues. All four countries, particularly Honduras and Nicaragua, depend on agriculture, and specifically on certain crops. Agriculture is what creates their export trade. Seventy per cent. of the export earnings of Honduras and Nicaragua is generated from bananas, coffee and sugar. These crops have been completely wiped out.

Bananas from Latin America are currently penalised under EU regulations, which are in total contravention of the regulations and rules laid out by the newly formed World Trade Organisation. I know that there are reasons for this. The European countries wish to protect their former colonial, and subsequently dependent, territories. If we are to reconstruct the economies of these four countries, some initiative will have to be taken to relieve the situation and to create a level playing field so that they can recover their export earnings. Unless there are export earnings, there is no economic activity. These are not countries which will be able to generate vast industrial enterprises. This is an important matter and I believe that Her Majesty's Government should reconsider with regard to the WTO and the position on bananas.

Looking further ahead, another area of concern is the question of debt relief. As I said, if there are no exports, there are no earnings and there is no economic activity. There is at present a moratorium on the debt. While that is in place, it is vital that the international agencies—the World Bank, the Inter-American Development Bank, the IMF and other institutions—should consider some form of exoneration of the debt and a complete reconstruction. It needs to be done on an international level. Unless that happens, these countries can never recover their position and participate in the world to which they were beginning to become accustomed by virtue of their return to democracy and their wish to participate in the economy of the region. There seems to be an opportunity now for Her Majesty's Government to take a lead within the EU in pressing Washington and the international organisations to take positive action on this matter.

We may not be able to consider these two issues fully tonight but I hope that the noble Baroness will be able to say something about them and that we shall be able to return to them at a later stage. Recovery of the area will take a long time.

I had the good fortune many years ago to live in Central America and I know all the countries concerned. They are occupied by hard-working, dynamic people who respond to initiatives. They are immensely friendly people and these are delightful countries. They deserve our support and assistance and I hope that we can give it to them in the way they have come to expect.

6.8 p.m.

Lord Ponsonby of Shulbrede

My Lords, I begin by thanking the noble Viscount, Lord Montgomery of Alamein. This is an important subject and it is right that the House should have the opportunity to debate the Government's response to Hurricane Mitch. I should correct the noble Viscount. The noble Baroness, Lady Amos, is rarely off her feet. She has taken this House by storm in the past few weeks, having responded to a number of debates.

I wish to give a personal example relating to this matter. On the 13th November my family received an e-mail from a friend who married a Nicaraguan and who farms in Nicaragua. If your Lordships will allow me, I shall read from the e-mail: Thursday two weeks ago (it hardly seems like it), the river rose up to the bridge for the third time in two days, in the morning we noticed large cracks appearing in the soil between the reinforced wall of the gully and the house and at midday that whole section, downriver of the bridge, went. At around 1 o'clock, the first of the big trees also went, at which point it was obviously time to evacuate the children. When I got back several large trees had hit the bridge head on and so I decided to get the most valuable things out. I was still trying to get the computer unplugged when I felt the wave hit the house and presume that the tremor I felt was a combination of that and the bridge finally going down. Almost all the damage was done by that one wave. In one fell swoop it took everything loose from the house and from my drying shed outside the workshop. The water on the other side of the gully swept over our nursery and vegetable area taking everything with it, (where the vegetable banks were, we now have deposits of up to 2 feet of alluvial sand). We've lost more than 95% of our nursery plants, 100% of our vegetables and herbs and around one third of our total infrastructure—perhaps $8–10,000 worth in all"— and that is in the context of people who earn only a couple of hundred dollars a year.

But all that is recoverable—the irreparable damage is what I find most difficult to come to terms with, it is the amount of land which has just been torn away and rendered useless. The geography has completely changed—you wouldn't believe it". The writer lists the seeds and help that he hopes to receive from charities in England to replant his farm. It is worth making the point that this friend of my family was not in the worst hit area. There were no deaths. However, in certain areas there was even worse devastation than that described in this correspondence.

I echo the congratulations of the noble Viscount, Lord Montgomery of Alamein. The swiftness of the Government's response has been referred to by several of the NGOs to which I have spoken in the past day or so. There has been little or no history of bilateral aid between this country and the countries of Central America. I think that I am right in saying that aid programmes only started with the incoming Labour Government, so they ought to be congratulated in that respect.

I understand that the aid will mainly go through the UN agencies and the Pan-American health organisation. In the past the original idea was that the aid—it was about £6 million over a two-year programme—would go towards institution building. My first question to the Minister is this. Am I right in assuming that the £6 million or so will now all go into post-Hurricane Mitch reconstruction?

The Government gave a full Answer to a Written Question in the Official Report, Commons, on 3rd December. They assessed the disaster and the DfID's own humanitarian assistance and forward strategy. However, I have three further questions arising from the points made by the Government. I think we would all accept that the region needs long term commitment, not simply to bring it back to its previous parlous state but to try to build something better in order directly to help poor people. To do that, help is needed for the civil society and not just the working government of the day. While there will never be enough money, will the Minister be ruthless in ensuring that good policies and practices are properly targeted at government and civil society level and at the NGOs? Hard choices need to be made, because there will never be enough money for all the work that is required.

My second point, which relates to cancellation of debt, was also raised by the noble Viscount, Lord Montgomery of Alamein. The Government are to be congratulated on their initiative on a debt moratorium. Can the Minister tell me whether debt relief will be on the agenda of the EU summit in June, when I believe that it is to talk about Latin American issues?

My third point is on transparency. I hesitate to use that word since it tends to be over-used these days. This point was put to me by some of my friends and colleagues in the NGOs. With funds coming from multilateral agencies, frustration is felt by the NGOs and the people receiving the aid that the decision-making processes are not understood. The Government could have considerable influence in opening up that process.

In conclusion, I echo the words of the noble Viscount, Lord Montgomery. Hurricane Mitch has caused devastation which few of us can imagine in countries which were already among the poorest in the world. I wish to join with the noble Viscount in his generous congratulations on the Government's response.

6.15 p.m.

Baroness Hooper

My Lords, as a result of Hurricane Mitch, thousands have died, hundreds of thousands are homeless and have lost everything they owned; crops have been ruined; industry destroyed; communications interrupted; and entire communities laid waste. The example cited by the noble Lord, Lord Ponsonby, brings the matter home to us all.

However, apart from the damage to property and infrastructure in the countries concerned, threats of famine and disease now hang over the whole region. Cholera, typhoid and malaria are endemic to Central America. Moreover, with the breakdown of sanitation and public health, there is a real prospect of starvation and major epidemics. That is very much an ongoing issue.

The depths and extent of the tragedy have been acknowledged in this short debate. I believe that the media have played an important and responsible role. They have given fair coverage to the event. Of the television programmes I have managed to watch, the balance and real effort to raise awareness in terms of general news coverage and specific programmes have been exemplary. But we must move on. The important factor now is to ensure that the ongoing consequences—they will affect the whole region but in particular Honduras, Nicaragua and E1 Salvador—are remembered and that we do not forget those who are suffering, as international events inevitably move on. I am certain that my noble friend Lord Montgomery will ensure that that is so so far as concerns this House and the Government. I know that the Minister and her department intend to keep a close watching brief.

Some further acknowledgement of efforts are in order. There has been a huge response from the Government, as has been said. I underline the comments already made and thank the Government for their swift response, with emergency aid and support given almost instantaneously. I support also the comments made about ensuring that the Government continue to act to relieve the national debt in the countries concerned. That is essential for their long term future.

As regards the European Union effort, I should like to see the Government taking a firm lead in the action taking place in Central America, in particular in relation to the relief of the national debt. I should also be interested to hear the results of the report of the special United Kingdom mission which went to the region.

As has already been done, I acknowledge the efforts of the non-governmental organisations, including those of some of the small organisations. I am very familiar—as is my noble friend—with the bilateral organisations such as the Central American Society, which is co-ordinating efforts with the Central American British Chamber of Commerce, as well as with the more structured approach of Oxfam, the Red Cross, CAFOD and many others. Their involvement is absolutely essential because of their networks and abilities—subject to all the infrastructure problems that have been mentioned—to get aid to where it is most needed. We all acknowledge the enormous and important role that those organisations have played.

There is another group, which perhaps is not often recognised; that is, the private sector. Its response should also be acknowledged. I did some research via the corporate members of Canning House and the Hispanic and Luso Brazilian Council, of which I am currently the president. The pharmaceutical companies, such as Zeneca, Glaxo Wellcome and SmithKline Beecham, made an immediate response. I shall not go into all the detail and the statistics. There were instant shipments of medicines, vaccines and medical teams to the area. That has been very much welcomed. It is important to acknowledge that effort in the hope that it will be on going.

Finally, I make a very special plea. I was in Honduras at the end of January of this year at the inauguration of the new president. In the course of my few days there I visited a centre called Zamorano. It is a unique centre for agricultural research and training, which covers the whole of Latin America. There are students from that area. It has a very wide international remit with students from all over the world, including from this country.

I communicated with the director of the centre to find out how it had survived the tragedy. He reported that the damage was not as bad as it might have been, but indicated that, nevertheless, in the near future the life-threatening immediate danger will give way to serious, longer-term problems relating to the extensive destruction of food crops that were maturing; the death of hundreds of thousands of farm animals; and the literal washing away of thousands of businesses and jobs involved in the agriculture and agri-business area. As they begin to rebuild their lives, the farmers and businesses will lack the basic inputs which they need to be productive again. Therefore, agriculture more than ever is the key to the development and even survival of these societies. Without productivity in rural areas, these countries will be unable to feed themselves when foreign aid organisations move on to the next emergency, as may well happen.

In that context Zamorano is particularly well-prepared in terms of its human resources, experience and infrastructure, to lead significant, sustained and effective actions aimed at restoring rural economies and productivity. So in making this special plea, I hope that the Government—if they are providing aid in relation to agricultural issues and towards the long-term training of agricultural workers—will consider this centre, which is world renowned, and that it will be a recipient of government activity. I look forward to hearing from the noble Baroness as to the progress being made.

6.24 p.m.

Lord Rea

My Lords, practically all the questions that I had thought of have now been asked by the noble Baroness and noble Lords who have already spoken. My reason for speaking in this Unstarred Question is because I have visited Central America and the Caribbean three times, including Nicaragua and Guatemala on one occasion. Therefore, I have an interest in the area quite apart from a general interest in the humanitarian effort that has been put in after the disaster.

I was in Cuba at the end of September at the eastern end of the island in a small town called Baracoa, when hurricane George arrived. We were right in the eye of the hurricane. It was a very mild disturbance by the time it reached Cuba. It ranked number two in a scale of five and it was nothing like as fierce as hurricane Mitch, having spent most of its force on the Dominican Republic and Haiti. It was still quite an experience.

What struck me almost more than the strong wind was the torrential rain, which fell for most of the day at one inch an hour. I gather that that was the main cause of the devastation in Central America; namely, the torrential rain rather than the wind. I was very impressed by the precautions taken. All the hotel windows were criss-crossed with sellotape and so were the windows of public buildings, schools, clinics and hospitals. Villagers living right on the coast moved inland for a day or two while the hurricane blew over. Town dwellers were not allowed to travel. A day or two after the hurricane trees were quickly cut up and removed from roads. Work on re-erecting electric pylons and telephone cables that had fallen was quickly under way, with the aid of the army in some cases. I understand that in Belize anticipatory action was also quite effective in minimising the worst effects of hurricane Mitch. I am sure that the noble Viscount, Lord Waverley, with his connections in Belize, will be telling us about it.

While reconstruction and rehabilitation is now beginning in Nicaragua and Honduras, it would be very good to know whether the next hurricane is being borne in mind. Are bridges going to be built more strongly so they can withstand being hit by tree trunks? Are proper surveys to be done to try to ensure that land for housing will not be washed away? That may be impossible because there may not be any land available which is safe for poor people. It will be interesting to know whether there is any information on this subject.

Like the noble Baroness, Lady Hooper, I ask my noble friend to give a progress report as to how far and well reconstruction is taking place. It is early days yet. Is there any hope that the opportunity can be used—as my noble friend Lord Ponsonby asked—to improve on the infrastructure that was there previously? All the countries affected were desperately poor before the hurricane struck. Can the relief funds that are available be used in such a way that not only farmers—and this is the point made by the noble Baroness, Lady Hooper—be given grants and loans to buy seed, tools etc. that they need to begin production again, but can roads, co-operative marketing centres and processing plants be developed or redeveloped on a scale which will help the areas concerned to climb out of poverty?

Obviously, all this will have to be done in conjunction with the governments concerned. As my noble friend said, I hope that local civil society and local communities will be very much involved. Here both local and international NGOs will be able to play an enormous part.

In conclusion, I wish to ask my noble friend for up-to-date figures. Can she give the total amount of our outright aid; low interest rate or interest free loans; the amount of debt which has already been cancelled, both official and commercial; and the amount of the moratoria on debt which have already been agreed? Our contribution needs to be stated in relation to the total provided by the whole world. If it is not possible for her to produce those figures tonight, it would be helpful if she could write to me.

We have read that there have been some outbreaks of cholera. How is the emergency public health rescue operation being carried out? There must have been a great deal of damage to the already poor health infrastructure which existed. Can my noble friend describe how the disaster has affected the health of the people and what has been done to sustain and improve the situation? Yesterday, the Paris Club discussed cancellation of debt, but there is still a long way to go. I am sure that my noble friend will comment on that, so I shall hand over to other noble Lords and then to her.

6.32 p.m.

Viscount Waverley

My Lords, following all the congratulatory messages tonight, I fear that I might be inviting some criticism. However, I shall continue with a view to being realistic and constructive for the future.

Of course, I endorse the broad spirit of all that has been said tonight. But as the question of aid with ensuing issues has been well covered, I wish to go down a different road and ask whether the Government's reaction to this disaster was the right one; what lessons can be learnt; and what must we do to prepare ourselves for the future?

However, perhaps I may make one quick point before doing so. I believe that this House, through the Minister, should show its dissatisfaction with the United States for attempting to hijack WTO discussions with the European Union. The United States is attempting to resolve the EU banana regime in advance of settlement procedures.

It is this type of hurricane disaster, which brings us together tonight, that requires sensitive understanding of the dire effects on the majority of banana smallholders in the Caribbean. Bananas are currently the only crop which can produce new fruit for export in reasonably short order. We must keep our markets open at preferential terms for hardship cases. I hope the Minister can give us an undertaking that the Government will not weaken in their resolve to protect those who all too often cannot fend for themselves.

This country's approach to Hurricane Mitch, with regret, was not totally satisfactory. I realise that the Government will wish to defend their position, but the reality is that the DFID's reaction to the disaster was wanting: Whitehall's bureaucratic maze was a severe hindrance; and with no government department wishing to take an immediate lead, the Treasury effectively said that no immediate funding would be forthcoming.

I say that all in the spirit of needing to get it right next time. It was a mercy that we had a training mission at that time in the region and so were able to assist Honduras and Nicaragua with ships, helicopters and soldiers. I believe that without their presence nobody would have been sent. But they were and must be congratulated on being able to implement defence diplomacy at its best.

Lord Ponsonby of Shulbrede

My Lords, I thank the noble Viscount for giving way. He seems to be accusing the Government of being somewhat tardy in their response. It might be appropriate to refer to CAFOD, one of the NGOs to which I spoke recently. It stated that after the first telephone call it received a donation of £95,000 to its work in the region. That was an immediate response. Not only did the Government have their own facilities in the region, but they were quick to fund other NGOs which also had facilities there.

Viscount Waverley

My Lords, this afternoon I attended a round table discussion where the message was somewhat different. At a later time I shall be delighted to discuss the issues with the noble Lord, but we must press on. I believe that there is a concern. We want the best for the future and therefore I shall continue. NGOs have a problem, but I can discuss the issue with the noble Lord at a later time. I thank him for his intervention.

I believe that without the presence of the training mission in the region nobody would have been sent from the military. But they were and they must be congratulated on being able to implement defence diplomacy at its best. The difficulties start arising when one realises that, although our ambassadors were requesting assistance via the Foreign and Commonwealth Office, the DFID, which is the leading Ministry for disaster relief, declined, for example, to request MoD assistance on the grounds that it might have to pay. The MoD, to its eternal credit, decided to take hold of the situation. But because its ships and men were not equipped for relief operations, save for the West Indies guard ship, and because no Whitehall department would authorise any expenditure, our servicemen were limited in what help they could provide. An immediate dispatch of essential and specialist stores and personnel might have made a significant difference to the relief operation.

I note that the deployment of the guard ship is to be reduced as a result of the reduction of warships under the recent Strategic Defence Review and so future support for disaster relief in the Caribbean will be less. Will the Minister confirm that?

Finally on this theme, although credit must be given to our regional ambassadors and defence attachés, is the Foreign and Commonwealth Office, through necessity, considering closing posts in both Honduras and Nicaragua? If so, will the Government reconsider that position?

On a different tack, I understand that today Central American Presidents will meet with international donors to discuss a massive injection of aid, with the Presidents also looking for trade benefits and immigration support from the United States. Will the governments contribute to that? If so, will the Minister comment on it? UN agencies estimate that it will cost 5.3 billion dollars just to repair the damage to infrastructure and housing in the region. I also understand that Nicaragua will be seeking fast-track approval to open US markets for its products. Ministers here might wish to keep a watch on that situation, as the United States may be about to contradict its Lomé concerns. On the question of debt, are European governments offering to suspend bilateral debt service payments to help Honduras and Nicaragua?

Briefly, what of the future? I believe that dramatic action is called for. I call on the Government to set up an inquiry to consider the implementation of an effective rapid response mechanism, and to consider such matters as whether disaster relief should be taken out of the hands of the DFID and given to the Foreign and Commonwealth Office, for which I believe there could be a strong case. Central America and, by extension, the Caribbean are susceptible to an annual catalogue of disasters and it is essential that we prepare ourselves for such calamities.

6.39 p.m.

Lord Redesdale

My Lords, I thank the noble Viscount for initiating this timely debate. It is timely as this week the international community will hold two meetings of vital importance to the future of Central America. The Paris Club of creditor nations held their regular monthly meeting in Paris a couple of days ago. On the agenda was an item to discuss debt relief for Central America. Also, the leaders of Nicaragua, Honduras, Guatemala and E1 Salvador will meet in Washington DC with international donors today and tomorrow at an emergency consultative group, hosted by the Inter-American Development Bank.

I have two questions for the Minister. What progress does the noble Baroness expect to come out of those meetings and what will be Britain's contribution? I want to focus on those points because I believe that many questions, as the noble Lord, Lord Ponsonby, has said, have been answered in a fabulous Written Answer in Commons Hansard for 3rd December. I fervently wish that that will be the level of answer for all Written Questions in the future.

Prior to Hurricane Mitch, the countries of Central America were already among the poorest nations in the western hemisphere. In 1997, 2.6 million Hondurans and 2.1 million Nicaraguans lived below the poverty line. That represents 50 per cent. and 47 per cent. of the countries' respective populations. In Guatemala, 53 per cent. of the population live on less than 1 dollar per day.

Flooding, high winds and mud slides in Nicaragua, Honduras, E1 Salvador and Guatemala have resulted in an estimated 25,000 dead and missing and over 2 million homeless.

Surveys by Oxfam International staff in the districts of Choluteca and Valle in Honduras reveal a dire situation. Displaced families are living in rudimentary shelters; food shortages prevail; and town and village water systems have been destroyed. Not only have people lost loved ones and homes, but many have lost their only sources of livelihood as well. An estimated 80 per cent, of the region's agricultural production has been lost, including food crops as well as valuable export commodities.

Modesta Ordanne, an Oxfam project partner in Choluteca, said, We have lost everything, the school, hospital, police station. The wells are filled with contaminated water and we need a pump to access the clean water that there is. Everything is dead, there's nothing green, it is like the vegetation has been burned". Outbreaks of cholera, and other water-borne diseases resulting from contamination of food and water, have been reported in all four countries, and the death toll, as may be expected, may exceed the death toll caused by the hurricane itself.

If the reconstruction programme is to be equitable and sustainable, it must make rural development a priority. Reconstruction must not stop at the cities. In Nicaragua, for example, three-quarters of the poor live in rural areas. For those who have been displaced by the storm. the goal must not simply be a return to unsafe, crowded and marginal land, only for them to be swept away by the next storm. For the many farmers at risk of losing their land as a result of loan defaults, debt forgiveness by local banks will be necessary. Efforts are needed to protect those small landowning farmers from displacement and to open access to land and credit to those surviving on unsupportable lands. Environmental degradation, closely related to the poverty of the people—a major contributing factor in the devastation—must be reversed.

Clearly, achieving sustainable development, beyond merely restoring those countries to the pre-Mitch status quo, will take far more resources than any of the countries can provide themselves. The Government of Honduras have made preliminary estimates that recovery efforts may cost more than 2 billion dollars and take more than 20 years to complete. just to reach the development levels in existence prior to Hurricane Mitch.

The long-term problems of these countries are, I believe, closely associated with their debt levels. Rather than focusing on the immediate problems of aid, which was so necessary after the hurricane, I would like to focus on the issues of debt.

Even before Hurricane Mitch, Honduras and Nicaragua were struggling under the weight of immense debt burdens. Their positions will be far worse now. At the end of April 1998, Nicaragua had a debt of over 6.1 billion dollars, with the highest per capita debt in the world, at 1300 dollars per person. Debt service payments of 254 million dollars in 1997 took over half of government revenue.

Debt service payments in Nicaragua were two-and-a-half times current expenditure in health and education combined, yet over half the population was living below the poverty line and two-fifths of poor children were malnourished. Half of those people are unable even to meet their daily food needs.

A similar situation could be found in Honduras. Honduras had a debt of 4.1 billion dollars at the end of 1997. Debt servicing of 410 million dollars represents a third of government revenue. At the same time, 40 per cent. of children below five years of age are malnourished.

Guatemala and El Salvador, whose debts are not as high as Nicaragua or Honduras when compared to exports, also are under the strain of debt payments. According to the World Bank, El Salvador paid approximately 314 million dollars to service its debt in 1996. Thus, debt relief for those countries would also be an important component of the recovery package.

Both Nicaragua and Honduras are among the 41 countries classified as heavily indebted poor countries (HIPC). The HIPC initiative is a World Bank/IMF framework, covering all categories of debt owed by poor country borrowers. It is intended to reduce debt to sustainable levels.

The HIPC framework was inadequate for Nicaragua and Honduras even before the hurricane. Under the best assumptions, neither Nicaragua nor Honduras would have received multilateral relief through HIPC until some time past the millennium. Nicaragua is not due to receive debt relief until the end of 2002 and Honduras is not set to receive assistance until at least 2004, if it qualifies at all.

One reason for delay is that countries have to comply with up to six years of IMF adjustment programmes before becoming eligible for HIPC relief. Nicaragua will have completed half of those programmes by the end of 1999. Honduras has yet to sign a new agreement with the IMF, which would allow it to enter the framework at all. Such programmes are unlikely to survive the economic shock of this catastrophe, and would need to be adapted to include human development concerns. Prior to Mitch, the IMF argued that Honduras might not be eligible for debt relief because its export revenues were high enough to cover debt service. That point was disputed by the Honduran Government, although it is clearly irrelevant now.

Rather than read out too many more statistics—I believe they have been covered—I would ask the Minister to give a brief oversight of how the meetings have progressed and to press the Government to make sure, in their membership of the IMF/World Bank and in their representations to the Inter-American Development Bank, that they push as hard as possible in the area of debt relief.

The levels of devastation from hurricane Mitch could consign these countries to years of poverty and misery, with massive reversals in human development. An unprecedented disaster deserves unprecedented support, not just in the months ahead, but in the years ahead. The emergency consultative group and the Paris Club meetings present the international community with an opportunity to marshal the political will to deliver a package that matches the significant human needs.

I want to add just one point, which is quite frightening and should be borne in mind in relation to disaster relief. It came from the newspapers recently. Dr. Willoughby, an expert of the National Hurricane Centre in Miami, discussed what had made Hurricane Mitch so devastating. It was not the wind-speed factor, but the amount of rain that fell. That point was raised by the noble Lord, Lord Rea. The frightening factor is that he also predicts that those storms are not that unusual; indeed, the conditions that brought about Hurricane Mitch this year could prevail next year.

Before I sit down I should like to say that the work of the NGOs on the ground and the military personnel who were so quick to respond deserve the congratulations of this House.

Baroness Rawlings

My Lords, I too thank my noble friend Lord Montgomery, for initiating this debate today. It is most timely, with the Paris Club meeting having taken place yesterday and the Red Cross transition announcement also being made this week. It has been an interesting and constructive short debate on a subject which is vitally important as thousands of people's lives are still at risk. This evening I shall concentrate on only one of the countries that was devastated by Hurricane Mitch. Other noble Lords have already vividly covered the others.

The horror that struck Honduras with Hurricane Mitch is now nearly two months old. But it was not until 9th November that we eventually had a Statement from the Secretary of State. Britain's aid package was but the paltry sum of £750,000 to a country that is burdened with debt repayments of over £1 million a day. In 1996 it still had a debt of £3 billion, more even than its annual GDP. That is clearly unsustainable even in normal circumstances, which we are not discussing today.

I should like to cover just three points in the short time we have available today: first, humanitarian relief; secondly, the horrific statistics, many of which have been mentioned by my noble friend Lady Hooper; and, thirdly, debt relief, which was also mentioned by most noble Lords today. In relation to humanitarian relief the British Red Cross, in whose gallant activities I have worked for over 30 years, sent three emergency flights in November with water containers, purification tablets, cooksets, disinfectant, and backpack sprayers. That is but a start. So far the emergency aid has been remarkable considering the relatively small funds available.

The Red Cross has also had assessment teams in place in the area. They reported back to Geneva only this week. They have already been debriefed and we are about to receive details of what is now most urgently needed for energy relief and reconstruction. The directors will lay out the plans and budgetary needs. It is important that there is worldwide co-ordination with only one appeal document. The federation has a website on the Internet which we all hope will help the appeal.

I wish to ask the noble Baroness, Lady Amos, three questions. First, did the DfID team of assessors co-ordinate its activities with those of the Red Cross? Secondly, what allocation of the £3 million pledged by the Secretary of State during this transitional period for further humanitarian assistance has gone to the Red Cross? Thirdly, will there be additional funds?

The people of Honduras are so weary with disasters that they would set their lives on any chance to mend it or be rid of it. The Minister for the Interior said: The catastrophe set them back 40 years". It was only 10 years ago in 1988 that Hurricane Gilbert swept throughout the area leaving devastation in its path. There were many promises in its wake but none materialised. It is a mountainous country, three-quarters covered by pine forest. Ambitious zoning and development plans were supposed to give the country order, conserving crucial green areas in its hilly country traversed by rivers and strictly limiting precarious hillside development. Sadly, the plan was never implemented. Today, both we and they have an Augean task—seemingly impossible—to get it right this time. Unfortunately, those rivers were destructive rather than constructive.

My second point concerns the horrific toll of over 6,000 deaths, over 8,000 missing and over 2 million homeless and destitute in a population of only 5.7 million people. The real problems we face today are the epidemics that have sprung up because many cities were under water and mud for so long. Most of the epidemics are being spread by contaminated water. The doctors say that health conditions will probably get worse before they get better. According to health officials 20,000 people have cholera, 31,000 have malaria and 208,000 have diarrhoea. Surely we can do more to help this modern hazard.

That leads me to my third point which concerns debt relief and which has been mentioned by nearly all of your Lordships today. This debate is timely because the Paris Club of western creditors met only yesterday, as the noble Lord, Lord Redesdale, said. It concluded by granting a three-year moratorium on bilateral debt repayments for Honduras and Nicaragua, but Honduras is to go through the Paris Club rescheduling of debt. That means it will have to comply with a structural adjustment programme and that will not be easy. The people of Honduras had no Balshazzar's feast before and were probably one of the poorest nations in the western hemisphere, as was mentioned by the noble Lord, Lord Rea. In 1997, 2.6 million Hondurans lived below the poverty line. The country had a trade deficit of 91 million dollars and a current deficit of 309 million dollars.

Despite the UK's support for the World Bank Trust Fund, whereby one creditor merely helps another, the UK still fails to agree to cancel our unilateral debt. It is a minimal amount but the cancellation would send a huge signal to G7 and G8 leaders and multilateral institutions. France cancelled its unilateral debt, which is far larger than ours at £42 million. It is taking the lead on this issue. Why do the UK Government still fail to lead in our response?

The leaders of Nicaragua, Honduras, Guatemala and El Salvador are attending an emergency meeting in Washington with international donors today and tomorrow to discuss debt. I am afraid that Hurricane Mitch was not foreseen and was far worse than anyone could have envisaged. As Shakespeare's Antony said: We cannot call her winds and waters sighs and tears: they are greater storms and tempests than almanacs can report". I fully support my noble friend Lord Montgomery, and look forward to the reply of the noble Baroness. I trust that she will press our views to the Secretary of State.

7 p.m.

Baroness Amos

My Lords, first, I thank the noble Viscount, Lord Montgomery of Alamein, for his kind words of welcome. I should like to assure your Lordships that it is correct to say that this is the first debate to which I have responded on the subject of international development, although your Lordships have been keeping me on my toes and very busy with Questions and a Statement. I should like to join with other noble Lords in thanking the noble Viscount, Lord Montgomery of Alamein, for initiating this very important debate. His commitment to Central America is well known in this House. I should like also to thank other noble Lords for participating in what has been a high level and expert debate. I should also like to thank your Lordships for having recognised the efforts made by the Government. In the time available, I may not be able to answer all the questions that have been raised this evening, but if I fail to do so, I undertake to write to noble Lords and give the detailed answers which are required.

Hurricane Mitch has been devastating for the poor countries of Central America, particularly Honduras and Nicaragua, but also Guatemala and E1 Salvador. Many of your Lordships have referred to the scale of the devastation, and I shall not go into the details again. However, I am sure that your Lordships will agree that despite frequently hearing these figures, it is extremely difficult to grasp the impact in terms of personal tragedy and the effect on the people in those countries.

The long-term effect on their economies is being carefully assessed, but those fragile economies have been severely knocked back. Before this latest disaster, the United Kingdom had decided, following the publication of the development assistance White Paper a year ago, that we should increase our modest assistance programme to Central American countries because they are so poor. That point was raised by my noble friend Lord Ponsonby. Recent events underscore the vulnerability of those countries and their need for international assistance. We shall be re-focusing our own plans for the region to take account of their post-hurricane needs.

I take issue with the noble Viscount, Lord Waverley, in that the DfID response was immediate; it was focused; and it was effective. In my Statement to your Lordships in early November, I made it clear that DfID immediately contacted NGOs who were already working in the countries concerned to offer support. We made money available to the Red Cross regional appeal. We contributed to the Pan-American Health Organisation for basic health care needs; we gave money to CAFOD and to Christian Aid and to NGO care.

In addition, we greatly valued the eye-witness reporting from our very small HMG posts in the countries concerned. They also helped us to facilitate elements of the emergency response; for example, by giving advice and help to NGOs and others. However, I must say to the noble Viscount that it is my view that the FCO does not have the right kind of expertise, experience or resources to take on the job of co-ordinating United Kingdom emergency aid. I think that the DfID did an excellent job in relation to these issues.

Our first priority after the hurricane was to provide emergency aid to save lives and to offer some immediate relief. Four Royal Navy ships in the region made a magnificent contribution, both in delivering emergency supplies and in search and rescue operations. They saved many lives, and governments in the region have expressed appreciation of their efforts. The noble Baroness, Lady Hooper, referred to the importance of partnership, and the Government welcome the partnership approach to immediate relief and, in particular, the work between NGOs, the private sector and Government.

Once the immediate life-saving phase of the operation ended, we began to focus on reconstruction. The United Kingdom plans to operate within the framework of a "transitional appeal" launched and co-ordinated by the United Nations. We will provide, in addition to the £1 million already spent on emergency relief in the region, over £3 million in further humanitarian assistance over the next six months to enable people, especially those who have been left completely destitute, to survive and cope. I hope that my noble friends Lord Ponsonby and Lord Rea will be reassured about that.

We are also working on plans to respond to longer-term needs. We have already planned to spend £6 million on Central America over the next two years. We are now re-focusing this to take account of reconstruction needs, and we are also taking forward the proposals on debt relief which the Chancellor announced on the 7th and 10th of November. I will come back to that later in my response. The £3 Million which we have allocated for the next six months will be spent on repairing and rehabilitating roads and small bridges in Honduras and also on a public works programme to benefit poor families by creating short-term local employment.

In Nicaragua we plan to work through UNICEF to repair the water and sanitation infrastructure and to restore primary health and education services for some of the communities affected by the hurricane. My noble friend Lord Rea and the noble Baroness, Lady Rawlings, also referred to health. We shall be supporting a regional health programme in this transitional humanitarian phase. There has been 60 per cent. damage to the health sector. Good research is already in place and that has given us a great deal of information about the spread of diseases and so on.

Early detection and targeted control interventions have already proved their value in the region through aborting potential epidemics. Continuing support for this will remain essential in the coming months. The diseases outlined are all endemic to the region. We recognise that the best work is being done by agencies which are already established in the region and are working on the ground. They are able to mobilise existing structures and systems and to draw on their local knowledge and on the trust which they have built up in the countries concerned.

The noble Baroness, Lady Hooper, talked about the next phase, and indeed this was also referred to by several speakers. The United Kingdom's contribution to the next phase has been put together on the recommendations of an expert mission from the DfID, which visited Honduras and Nicaragua at the end of November. In his opening remarks the noble Viscount, Lord Montgomery of Alamein, welcomed the mission and asked for particular information on its outcome.

It has reported that during the next few months, survivors of the hurricane will remain vulnerable in several ways because the lack of safe water and the disruption of health services increase the risk of disease. Food security will be threatened if seeds and other materials are not provided in time for the current planting season. If primary schooling is not restored, there is a risk that children may drop out permanently from education. The best way of delivering our assistance is by working within an overall international framework in order to target local communities, which are often very effective in mobilising self-help and reconstruction programmes.

In Honduras, however, there is a particular problem as regards access to poor communities because of disrupted roads and communications. This is why we shall be focusing on the rehabilitation of rural roads and bridges as part of our package of assistance. A consultant based in the region has started work today in consultation with the Ministry of Works in assessing priorities for assistance.

The noble Lord, Lord Redesdale, talked in particular about the need to rebuild the economies of the region. As has already been mentioned, the international donor community is meeting today and tomorrow in Washington, under the chairmanship of the Inter-American Development Bank to consider the medium and longer-term reconstruction needs of the region. The United Kingdom will be pressing for the reconstruction effort to be as well-co-ordinated and coherent as possible. We shall also be pressing for assistance to be delivered in a variety of ways which reflect needs: some assistance, for example, is best delivered through NGOs and organisations of civil society. The multilateral institutions, particularly the World Bank and the Inter-American Bank, are also likely to have a key role to play in pulling together the elements of the international reconstruction effort. As I have already mentioned, the UK's own bilateral contribution to longer-term reconstruction will be some £6 million over the next two years.

I said earlier that there are a number of statistics which have been mentioned by noble Lords in relation to the devastation. Honduras has lost 80 per cent. of its banana crop. The noble Viscount, Lord Montgomery, asked in particular about bananas and the noble Viscount, Lord Waverley, was also robust in his approach to the issue. The economic effect of Honduras losing 80 per cent. of its banana crop is that, in terms of replanting and the medium and long-term recovery of the economy, we need to look in particular at the agricultural sector. Those issues are being considered by the governments of the region as part of discussions on the planned international assistance effort.

On bananas in particular, our experience with Caribbean banana producers—and, indeed, with other developing countries whose economies depend on single crops—indicates the need for countries like Honduras, in the context of planned replanting of its banana crop, to consider the need to restructure the industry and also the scope for diversification into other crops.

On a separate matter, we are supporting the European Commission in seeking to resolve through established WTO dispute settlement procedures the current dispute between the European Union and the United States on EU support for ACP banana producers. We are also in the process of renegotiating the Lomé Convention in the context of a new round of WTO negotiations. Indeed, the two things are coming together.

The noble Baroness, Lady Hooper, mentioned the expertise of the agricultural centre which she recently visited. We shall, of course, bear that in mind when looking at the reconstruction effort.

We are also discussing with the European Community how its own assistance to the region may most effectively be spent. It has already made available about 15 million ecu through its Humanitarian Office for immediate relief needs. The Commission is now considering the establishment of a regional reconstruction fund, for which a preliminary figure of 150 million to 200 million ecus (over several years) has been suggested. We shall be keeping in close touch with the European Commission about the delivery of this assistance. We shall also be pressing the EC to ensure that its own regional reconstruction fund is consistent with the wider international reconstruction effort. The EC is taking part in the Washington meeting today.

I believe that all noble Lords who participated in the debate mentioned debt relief. Debt relief will also be an important element in the economic reconstruction of these countries. It is quite clear that neither Honduras nor Nicaragua will be in a position to service their external debts for some time; a point made by the noble Baroness, Lady Rawlings. Funds are needed urgently for reconstruction. So we have been working with like-minded creditors in the Paris Club to ensure that there is support for the cancellation of bilateral debt repayments. Yesterday, as has already been mentioned, the Paris Club met and agreed to defer bilateral debt service payments for the next two to three years, with no late interest charges.

However, most of these countries' debts are owed to international financial institutions such as the Inter-American Development Bank, the Central American Bank for Economic Integration, the World Bank and the IMF. These funds could not simply be written off without causing enormous damage to the institutions themselves; and, of course, jeopardising the likely future needs of Central American Governments to borrow from the development banks.

Therefore, we have proposed two courses of action. I have to point out to noble Lords that we are taking the lead in these discussions. First, we propose that the international financial institutions look at ways of meeting some of the costs themselves; for example, by financing existing loans on more concessional terms. Secondly, we propose the establishment of a multilateral trust fund to help service those debts. The UK proposed that such a trust fund be set up shortly after the hurricane, and the World Bank board has now approved the establishment of such a fund. The UK is contributing £10 million and I am pleased to tell noble Lords that total pledges already stand at over 100 million dollars. When the German presidency of the European Union begins in January, I can confirm that Germany will be putting together its own debt initiative for the G8 summit in Cologne next year.

I hope that noble Lords will bear with me while I say a few words in conclusion. The UK has also proposed to the international financial institutions that the timetable for relief under the heavily indebted poor countries (HIPC) debt initiative be shortened to help countries affected by the hurricane. The HIPC initiative aims to reduce the external debt of heavily indebted poor countries to a sustainable level. I shall not go into the detail of how that impacts upon Nicaragua and Honduras, bearing in mind the time factor.

However, I should remind noble Lords that 1998 has been a particularly bad year in terms of there being a large number of natural disasters, which some experts link to climate change. We believe that there is a stark lesson about being better prepared for disasters which emerge from events such as those which took place in Central America. Therefore, it would be critical to include in the international recovery programme for Central America specific elements to improve the ability of these vulnerable countries to withstand future disasters. We have worked hard to strengthen the capacity of the international system to respond in a co-ordinated way to emergencies of this kind. We shall be pursuing those aims in the context of a UN-led "lessons-learnt exercise" early next year. What we are seeking to establish is the basis of sustainable long-term recovery.

House adjourned at eighteen minutes past seven o'clock.