HL Deb 14 May 2002 vol 635 cc138-9

2.52 p.m.

Baroness Rawlings

asked Her Majesty's Government:

What is their investment policy for the Commonwealth Development Corporation.

The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Baroness Amos)

My Lords, an investment policy was put in place when CDC became a public limited company in December 1999. This requires that 70 per cent of new investments, measured over a rolling five-year period, must be in poorer developing countries and that each year CDC should aim to make 50 per cent of new investments in sub-Saharan Africa and South Asia. The 70 per cent target has been exceeded in each of the past five years and the 50 per cent target has been exceeded in three out of the past five years.

Baroness Rawlings

My Lords, I thank the Minister for her Answer. While we applaud CDC Capital Partners for its evident business skills, building up to the partial sell-off, does the Minister accept that in the past two years China has had little difficulty attracting inward investment? Can she explain why CDC Capital Partners has now started investing in China?

Baroness Amos

My Lords, the purpose of CDC is to enlarge the resources available through the introduction of private capital in developing countries. We are doing that across a range of countries, including China. The noble Baroness is aware that our 1997 White Paper put the elimination of poverty at the core of our development strategy. That is why we are looking at poverty elimination across the world and investing in those countries where we think that a significant difference can be made.

Lord Shutt of Greetland

My Lords, does the Minister agree that there is a difference between aid and investment? Would she care to comment on the circumstances whereby, in the CDC accounts, the assets that it held from the pre-1998 investments, in a difficult investment year, were written down by 10 per cent, but the assets that have been acquired since 1998 have been written down by no less than 31 per cent? In such circumstances, does the Minister believe that the company is getting its investments right?

Baroness Amos

My Lords, we believe that the company is getting its investments right. This is a transition period for CDC. It became a public limited company only in 1999. We are keen to ensure that CDC observes the investment policy that 70 per cent of investments should be in the poorer countries of the world and that there should be an aim of 50 per cent in sub-Saharan Africa and in Asia. We all know that the operating environment in the past year has been extremely difficult for companies across the world.