Heavily Indebted Poor Countries (Hansard, 21 July 1999)

§ Baroness Amos
My Lords, we welcome the G7 Cologne statement that the central objective of the HIPC initiative is to release resources for programmes to reduce poverty and thus help to meet the 2015 international targets.
The second phase of the HIPC review will focus on how that commitment is to be implemented. The Government have submitted proposals to the review. The outcome will be settled at the annual meeting of the World Bank and the IMF in September.

§ The Earl of Sandwich
My Lords, I thank the noble Baroness for that helpful Answer. Does she agree that there is an element of the emperor's new clothes about the announcement at Cologne? One wonders how much of the money will ever reach the poorest people for whom it is intended. For example, Tanzania, which is one of the poorest countries, is already unable to pay half of its debt interest. It is down to about three dollars per head for the education of its children. In those circumstances, will the noble Baroness give some reassurance that at the autumn meeting there will be a further undertaking to relate debt relief to poverty and to the targets at which we are all aiming for 2015?

§ Baroness Amos
My Lords, I assure the noble Earl that we welcome the fact that part of what came out of the Cologne statement was a clear recognition that the central objective of debt relief is to release money for anti-poverty spending. In the case of Tanzania, if the changes to the HIPC framework go through, they will provide deeper and faster relief for Tanzania. It means that it will qualify in a three-year rather than a six-year period, because it will be able to get interim debt relief from the point of decision-making, which is three years before the point of completion. In addition, with the Ministry of Finance in that country, we have been assisting Tanzania through a capacity building programme to enable it to negotiate more effectively in relation to debt relief.

§ The Earl of Northesk
My Lords, it has been reported today that a further 2,000 jobs have been lost in gold mining in Ghana. While apologising to my noble friend Lord Lucas for trespassing upon his Question, I ask whether the 2015 targets are being compromised by the Government's policy of selling gold, leading to worsening unemployment in many HIPCs? (PCs? Will the noble Baroness confirm that DfID was consulted about that policy in advance, particularly given that it is acting detrimentally upon the Government's stated wish to offer a hand-up, rather than a hand-out?

§ Baroness Amos
My Lords, I am afraid that I cannot agree with the noble Earl. One of the reasons that there 971 has been a commitment to selling 10 million ounces of IMF gold is to meet the costs of providing additional debt relief under an enhanced HIPC process. It is essential to secure financing for the proposed revision, and the sale of IMF gold is the best way to meet the fund's share of the costs.
We acknowledge the concerns of poor-country producers of gold. We have a commitment to ensuring that the sale of that gold is managed carefully. The long-term trend of the gold price is down. That has nothing to do with the recent sales. One of the things that DfID has done and is continuing to do is to urge developing countries to diversify their production so that they are not so dependent on gold exports. So we are doing everything that we can, both through supporting the HIPC process and through supporting individual countries through our bilateral programmes.

§ Lord Stallard
My Lords, returning to the third Question, what safeguards will be put in place? Are there any systems for monitoring how the money is spent?

§ Baroness Amos
My Lords, that is one of the areas that are being carefully considered. We do not see the point of releasing money through the debt relief process if we cannot ensure that the money is then well spent in terms of anti-poverty programmes within the countries concerned. The World Bank, for example, is looking at the ability to carry out monitoring. We have made a submission to the World Bank, which is available in the Library of the House. In that submission, we encourage it to look in detail at ways in which the spending of those countries can be monitored to ensure that debt relief leads to enhanced poverty eradication programmes.

§ Baroness Knight of Collingtree
My Lords, in seeking to further the point made by the noble Earl, when examining this problem, will the noble Baroness always bear in mind the many instances on record in recent years of money being diverted from aid for the poor to aid for the person governing the particular country?

§ Baroness Amos
My Lords, I can assure the noble Baroness that we take an extremely robust approach to this. We have said to governments with whom we work that we will not tolerate corruption, that they need to have transparency and good government structures in place. We will assist those governments to put the structures in place if they are not already there.

§ Lord Wallace of Saltaire
My Lords, does the noble Baroness accept that there is a particularly strong European dimension in this? In terms of European migration, we are seeing surges of immigration from countries which fail, where disorder breaks out and order breaks down. If we fail to have a strategy for debt relief and assistance for good government in those 972 countries, it will become evident at the European borders in terms of people from those countries desperately trying to get in.

§ Baroness Amos
My Lords, I agree with the noble Lord that it is important for us to look at the complexity of the relationship and the fact that we are living in a global world. So there is an intricate and close relationship between what is happening in developing countries and its impact on us and on our European neighbours. I entirely agree that if we do not look after what is happening in developing countries, there will be a knock-on effect to European countries.