Debt Relief and Poverty Reduction (Hansard, 27 February 2001)

§ Baroness Amos
My Lords, the enhanced Heavily Indebted Poor Countries initiative (HIPC) makes a direct link between debt relief and poverty reduction. As a result, all countries that are eligible for World Bank or IMF concessional adjustment lending are producing national poverty reduction strategies. These strategies are being developed by national governments in wide consultation with civil society. Progress will be judged through the normal processes of democratic accountability.

§ The Earl of Sandwich
My Lords, I think we all agree that civil society has to be supported and I welcome the emphasis on that in the Government's White Paper. However, these are very large aid and debt relief funds coming into the different countries. How can nongovernmental organisations, especially the smaller ones, be expected to be equipped to monitor their government's progress as regards poverty strategies; and how can we expect those governments to tolerate their doing so?

§ Baroness Amos
My Lords, there are three different initiatives which will assist that process. First, we are mainstreaming work on poverty reduction and the monitoring of governments engaged in poverty reduction strategies through our work with the international financial institutions, governments and civil society. As part of that, we are working on a proposal with the World Bank to develop the capacity of southern civil society to engage governments in budgetary processes so that they will be able to monitor what their governments are doing with the money. We also contribute to the Paris 21 initiative, which aims to co-ordinate work on capacity building for poverty monitoring from a country-led perspective. As part of that, we are building the capacity of civil society to demand and use poverty 1071 information. The UN Development Group is producing new country reports focused on international development targets. The aim is to provide key information and indicators. Yesterday, at the international conference on child poverty, the first of the reports—on Tanzania—was launched.

§ Baroness Rawlings
My Lords, why has further lending or debt relief been extended to countries such as Zimbabwe, Nigeria and Zambia, which have not satisfied the criteria of economic and political reform?

§ Baroness Amos
My Lords, Zambia qualified for debt relief under the HIPC initiative in December last year. It secured new IMF/World Bank lending last year following the sale of the copper mine and renewed commitments to privatisation and macro-economic stabilisation. In all HIPC cases, including that of Zambia, debt relief at the decision point is on "flow" terms. That means that it can be suspended if the Government of Zambia fail to maintain an economic programme designed to restore growth and reduce poverty. Zimbabwe is not eligible for HIPC assistance and is not receiving any new lending or debt relief. In August last year, Nigeria entered into a one-year standby agreement with the IMF. This paves the way for a debt rescheduling agreement, not debt reduction.

§ Baroness Whitaker
My Lords, with reference to civil society, how can the Government ensure that northern NGOs do not dominate over southern NGOs, thus further disempowering them?

§ Baroness Amos
My Lords, we have what is called a civil society challenge fund: £11 million pounds has been allocated to the fund in the coming year. The criterion for funding is that UK-based non-profit making groups must have established links with civil society groups overseas. Those links must be more than merely a channel for transferring money; they must demonstrably add value in terms of the activity to be funded. As I mentioned in my reply to the noble Earl, the Paris 21 initiative aims to build the capacity of civil society to demand and use poverty information.

§ The Lord Bishop of Lichfield
My Lords, some of the poorest people in the world live under dictatorships. Will the Minister help us in thinking about how such people may be able to participate in programmes of aid and debt relief, which depend on economic reform, good governance and strong civil society?

§ Baroness Amos
My Lords, I entirely agree that it is difficult to deliver aid which benefits the poor in countries where the government are not committed to poverty reduction. We recognise that, and we have been trying to look at ways in which we can reduce poverty in such difficult circumstances. Debt relief is provided only to countries that have a programme of economic management funded by the IMF. That must be focused on economic growth and poverty 1072 reduction. For HIPC countries which are in conflict or which have a governance problem, the Chancellor of the Exchequer pledged that from 1st December last year all debt payments to the UK will be held in trust and will be returned to fund poverty reduction programmes when the country is able to enter the HIPC process.

§ Lord Redesdale
My Lords, the Minister mentioned democratic accountability. Does she agree that democratic accountability relies on strong opposition? Will the Government provide further funding for organisations such as the Westminster Foundation which promote democratic opposition?

§ Baroness Amos
My Lords, I agree with the noble Lord, Lord Redesdale, that it is important to have strong, democratic processes in-country. The Westminster Foundation has made a strong commitment and carried out good work in countries by way of promoting democratic processes. I shall write to the noble Lord with respect to the specific question on funding.

Lord Renton
My Lords, bearing in mind that these poorest countries have received funds either from governments or from charities in more prosperous countries, can the noble Baroness say to what extent those funds have been fully used for the relief of poverty?

§ Baroness Amos
My Lords, I should tell the noble Lord that in 1997 we made it absolutely clear in our White Paper that our development programme would be totally focused on the international development targets and the relief of poverty. We have been working with the international financial institutions, with the European Union and with others to try to ensure that they adopt a similar attitude in the programmes that they develop. We have been somewhat successful, especially with the EU, and through the HIPC process with the World Bank and the IMF.
In addition, given what happened last year at the millennium assembly when the countries of the UN agreed not only five of the seven international development targets but also another five targets to create the millennium development goals, the whole world community is coming together in terms of saying very clearly that the international development targets and the achievement of poverty reduction across the world is a priority.