Poverty (South Asia)

HC Deb 13 May 2004 vol 421 cc137-68WH

Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Ainger.]

2.30 pm

The Parliamentary Under-Secretary of State for International Development (Mr. Gareth Thomas)

I am grateful to Mr. Speaker for allowing us this opportunity to debate the important issue of poverty in south Asia. When one thinks of Asia, one thinks of a continent remarkable for its history. Ghandi, Nehru, Jinnah and Mother Theresa are four great people who shaped not only Asian politics, but world events. One thinks too of the continent's remarkable and diverse cultures and its stunning beauty—for example, Nepal and northern India. One thinks not only of the great sporting talents that have emerged from Asia—Muttiah Muralitharan and Sachin Tendulkar are two current examples—but, above all, of people who are industrious, hard-working and ambitious on behalf of their nations.

What is often not thought of, and certainly does not consistently make the headlines, is the grinding poverty that scars too many of the nations of Asia. Shocking levels of human development still exist in too many of those countries. When looking behind the headlines, one thinks of the considerable exclusion of many of the poor and most vulnerable from access to some of the most basic services. Perhaps most striking, in terms of the poverty in Asia, is the huge number of mothers and children who die from largely preventable causes.

Worldwide, some 1.2 billion people live on less than a dollar a day, and 800 million of them live in Asia. Some 450 million of those people live in south Asia, and 350 million live in India. There are more poor people in India than in the whole of Africa. Sustained progress on poverty reduction in the six main countries of south Asia—India, Pakistan, Afghanistan, Bangladesh, Sri Lanka and Nepal—will determine whether we are able to meet the development goals set in New York at the millennium summit in 2000.

Those goals committed not only the richer countries of the world, but the developing countries' Governments, to a series of specific and measurable targets. The headline challenge was to halve the number of people living in poverty. Other key goals include the need to reduce maternal and child mortality by three quarters and two thirds respectively, and the need to halve the number of people living without access to either safe drinking water or basic sanitation. Perhaps it is useful to flag up the fact that among those goals is the need to get every child of primary school age in front of a teacher.

There are reasons for optimism about the development of south Asia. Increasing numbers of people in that part of the world are being raised out of poverty. In India, poverty has nearly halved over the past two decades; there are good rates of economic growth and there is growing investment in education. Whatever the outcome of the Indian general election— results are still coming in—the Indian authorities deserve considerable recognition for the fact that the elections have been democratic and run fairly, without the violence one might have feared in previous times. The use of technology and the organisation of the elections are a tribute to the skill of the Indian people and their commitment to the democratic process.

The benefits of the development in south Asia are undoubtedly extremely uneven. One person in three lives below the poverty line and 80 million people do not have enough food. Many cannot access basic education and basic health care services. In short, progress to meeting the millennium development goals to which I have alluded is mixed. We are not on course to ensure that every child of primary school age is in front of a teacher. Good progress has been made in Bangladesh in such matters, but Pakistan will face a huge challenge to ratchet up progress on education to achieve the millennium development goal.

We are considerably off course from achieving the maternal mortality millennium development goal. There are increasing rates of tuberculosis in south Asia, too. As for HIV/AIDS, prevalence rates are low, but the epidemic has the potential to explode if it is not controlled and Asia would have a far worse epidemic than that which is happening in Africa.

The United Kingdom and, more generally, the international community need to make more finance available for development, as much for Asia as for Africa and the rest of the developing world. Our spending in Asia is increasing; it will reach £800 million by the end of 2005–06—a 45 per cent. increase from the position in 2003. We remain committed to the United Nations target of achieving overseas development assistance of 0.7 per cent. of gross national income and we are proud of our record of progress, increasing the figure from 0.26 per cent. in 1997 to 0.4 per cent., which we believe we shall achieve by the end of 2005–06.

The need for more finance to assist the development of Asia has contributed to the global estimate that, to achieve the millennium development goals, aid must double from $50 billion a year to some $100 billion. That is why the international finance facility proposed by my right hon. Friend the Chancellor of the Exchequer, which is supported by the French Government and a host of other Governments of developing and developed countries, offers a further potential source of the funds that are necessary for the development of Asia and other parts of the developing world.

A further reason for optimism about development in south Asia is that we know our aid is becoming more effective. It is making a difference and doing immense good. I shall cite two examples of that progress. First, in Rajasthan, a state in India, United Kingdom money has helped to build more than 1,000 new school buildings with more than 1,700 additional classrooms. The universal enrolment of primary school age children has been achieved in Rajasthan in the project areas that have received funding. Secondly, in Afghanistan, £1 million of support through micro-credit has helped more than 20,000 poor people to launch businesses.

Given the headlines about Africa and its profile in our media, it is important to remember at a global level that much faster progress is required to achieve the millennium development goals in the south Asian states, particularly India. It is not surprising that our programme in India is our largest. It includes support to tackle HIV/AIDS, improve reproductive health and make quality primary education available to all children. Over the next few years, we plan to spend some £300 million per annum in India.

Afghanistan and Pakistan represent significant challenges, given their turbulent recent histories. Both have been at the centre of the global fight against terrorism. We are trying to work with the Governments of both countries to create an enabling environment for the positive change that is necessary.

Pakistan has some of the worst poverty indicators in Asia. Almost one third of Pakistanis live below the national poverty line and numbers are increasing, which could exacerbate the social and political tensions in the country. In response, the size of our programme in Pakistan is increasing particularly quickly. We are coming in behind the Government's poverty reduction strategy, as well as providing support for basic education, primary health and efforts to bring the Government closer to the people affected by their decisions. For example, we are supporting the Government's plans to employ 100,000 lady health workers nationally.

2.40 pm

Sitting suspended for a Division in the House.

2.55 pm

On resuming—

Mr. Thomas

As I was saying, our strategy in Pakistan is to support the Government's poverty reduction strategy and provide support for basic education and basic health care. One aspect of our work programme is to provide support for the Government's plans to recruit some 100,000 lady health workers nationally to step up the quality of, and increase access to, health care for 100 million people in Pakistan.

On the education sector, we concentrate our assistance in Pakistan on two key provinces: North-West Frontier province and Punjab. The number of schools in those two states has doubled since we have given our assistance. As for overall enrolment, the number of children in school has increased by nearly half, and there has been a dramatic 70 per cent. increase in girls' enrolment. A further example of our approach in Pakistan is our funding of micro-finance programmes, which are helping 50,000 people to access the finance that they need to develop businesses.

In this Chamber in January, we debated the future of Afghanistan. The Government made it clear, after the fall of Kabul and the end of the Taliban regime, that we would stand by the people of Afghanistan and work closely with the Transitional Administration to develop the effectiveness, capacity and reach of government, and to help in the development of a range of services. We pledged that we would continue to provide significant and increasing financial assistance to Afghanistan.

At the most recent donor conference in Berlin, we pledged that we would increase our assistance in the next five years from some £200 million to £500 million. That donor conference was significant, in that the Afghan Government got all that they wanted from the international community for their budget next year through donor pledges. In total, some $8.2 billion was raised for the next three years, which represents some 70 per cent. of what the Afghan Government say that they need from the international community if they are to continue to make the development progress that we want.

The programme of assistance has already had a considerable impact in Afghanistan. Nearly 6 million children are back at school after the fall of Kabul. Nearly four out of 10 of those children are girls; that figure is up from 5 per cent. in 2001—a dramatic improvement, although there is clearly some way to go. There are now more than 70,000 teachers practising in Afghanistan, a third of them women, and more than 6,500 functioning schools. Also, millions of children have been immunised against polio and measles, which has saved an estimated 30,000 lives.

Elsewhere in south Asia, we are working closely with the Government of Bangladesh, where poverty has been reduced by some 25 per cent. in 10 years. The challenges on which we are working with the Bangladeshi Government are improving the quality of education in Bangladesh and the number of children completing their passage through primary school, and getting into school more of the children who are not attending. We are also working to reduce maternal mortality.

In Nepal, our programme focuses on the provision of direct assistance to the poorest and most vulnerable groups to reflect the serious impact of the ongoing conflict on them. Sadly, some 10,000 lives have been lost as a result of the conflict in Nepal. In Sri Lanka, too, we are working to reduce communal tensions and support the development of the education sector. For example, we are supporting the work of UNICEF in its programme to help children who are affected by the armed conflict.

There are three further key challenges that we as an international community need to address if we want to accelerate the progress out of poverty of the many poor people in Asia. First, one key millennium development goal where not enough progress has yet been made is eliminating the gender inequality in access to education. That is a particular challenge in south Asia, where a far higher number of girls are out of school than anywhere else in the world. At the moment, it is unlikely that the original target will be achieved by 2005. The limited progress that has been made towards getting more girls into school during the past decade has been more than offset by the increasing number of girls in the south Asian population.

It is worth remembering that investing in girls' and women's education is not only essential to producing education outcomes, but a key contributor to other development gains. It is essential to achieving higher economic growth and reduced poverty. We know that educating women and girls is one of the best ways to ensure a family's well-being as well as the better education and health of future generations.

The Department for International Development will seek to give a stronger push to the development of girls' education in south Asia. We already have significant programmes to address that issue, particularly in India and Bangladesh. Our total current and planned investment in primary education in south Asia over the next three years amounts to some £200 million. However, we will also be thinking through what else we can do to help south Asia to do even better.

Secondly, I want to highlight the threat that HIV/AIDS poses to the region. A more effective international response to HIV/AIDS is one of our top priorities in DFID. A new Government-wide strategy for HIV/ AIDS in the developing world is being prepared, and we hope to publish it later this year. It will cover what needs to be done, not only in-country, but by the international community. Our commitment on HIV/AIDS in south Asia between 2003–04 and 2005–06 already totals some £90 million.

Inevitably, when one considers the devastation that is caused by HIV/AIDS, one's thoughts turn immediately to Africa. However, there are already some 7.5 million HIV-positive people in Asia. India is second only to South Africa in terms of the number of people infected by HIV. There is already a generalised epidemic—in other words, prevalence of more than 1 per cent.—in five Indian states and major concern over what happens in respect of the spread of HIV/AIDS. At current rates of growth, the number of HIV infections in India is projected to rise to some 20 million by 2010. Unless we can improve the international response to the challenge of HIV/AIDS in south Asia, it is likely that by 2020 Asia will overtake Africa as the centre of the HIV/AIDS pandemic.

A particular challenge for Asia is to keep HIV/AIDS prevention at the heart of the response to the epidemic. Treatment and care are important components of the response to HIV/AIDS programmes, but in Asia the priority intervention at the moment is maintaining strong prevention messages. We have a window of opportunity to prevent the spread of the disease on the scale that we are seeing in Africa.

Thirdly, there is the challenge of reducing maternal mortality. Although the causes of maternal death in developing and developed countries are similar, the difference between the two is represented by a woman's chance of surviving the many potential complications. The difference in the risk of dying or suffering major disability between developed and developing countries represents the widest disparity of all human development indicators. In India alone, some 440 mothers die for every 100,000 live births. The equivalent rate in the UK is 13. A poor woman in south Asia is 100 times more likely to die as result of pregnancy and childbirth than a woman in the UK.

Just to compound that, for every death a further 30 to 50 women will survive the same complications but be left with one form of disability or another. Almost all deaths as a result of pregnancy and childbirth can be prevented. We know how to prevent the 20 per cent. of the world's maternal deaths that occur in India and, more generally, the 30 per cent. that occur in south Asia. The key constraints on tackling maternal mortality are resources and the political will to do something about the problem.

We are, as a Department and a Government, placing a strong and increasing emphasis on efforts to reduce maternal mortality, in terms not only of the resources that we make available within our country programmes, but of our dialogue with Governments in the region. Although action in the health sector is necessary to do something about maternal mortality, we must recognise the underlying social and political conditions that contribute to the high level of maternal deaths and ill health in Asia. Programmes, such as access to basic education, have to be in place to tackle those underlying conditions.

In highlighting those three development challenges, I do not want to understate the other major challenges that we face in south Asia. They include the deepening conflict in some countries in the region and the implications for the safety and security of development staff, as well as of the people we seek to support. The degradation of the environment and the impact in terms of long-term economic growth are also challenges in the region. Corruption is another major impediment to progress on development.

Asia, and south Asia in particular, is a key priority for the Government and the Department. We will continue to focus on the poorest countries in the region and those that contain the bulk of the world's poor. We will continue to work in close partnership with Governments and those to whom those Governments are accountable. We will continue to put great emphasis on working with and through others. We believe that partnership approaches are critical to the greater development effectiveness that we want to achieve.

The history of development is littered with lost opportunities due to donors not working effectively together. We will continue to work closely with and through non-governmental organisations, and with diaspora organisations based in the UK. I put on record my appreciation of the diaspora groups that have got involved in the consultations on our assistance plans for India and Bangladesh, which are undoubtedly stronger as a result of that engagement.

I hope that I have been able to reflect the importance of support for poverty reduction in Asia and some challenges that the region faces. We must not lose sight of the huge potential for continuing development that Asia represents and the contribution that we can make to achieving the world's development goals by putting support and effort into that region.

3.9 pm

Andrew Selous South-West Bedfordshire) (Con)

I am grateful to the Government for bringing forward this important debate today. I am pleased to be able to contribute to it. I should explain to hon. Members that the shadow Secretary of State for International Development, my hon. Friend the Member for Buckingham (Mr. Bercow), has an unavoidable parliamentary commitment and so cannot be here today.

As the Minister told us, south Asia is home to nearly half of all the people in the world who live on less than $1 a day. The population of south Asia accounts for nearly one fifth of the world's HIV infections. As the Minister mentioned, if current trends continue in India, which is the south Asian country most affected by AIDS, India will have some 20 million to 25 million cases of HIV/AIDS by 2010—more than anywhere else in the world.

South Asia is generally defined as the countries of Afghanistan, Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan and Sri Lanka. It is important at the start of the debate to be clear about that definition, because I imagine that, if one mentioned south Asia to most people, they would think of the tiger economies of south-east Asia rather than the grinding poverty that is sadly the case in south Asia.

The extent of the poverty can be seen by considering some of the poverty data for the countries concerned. Unemployment is 47 per cent. in Nepal and 40 per cent. in Bangladesh. Infant mortality is 104 deaths per 1,000 births in Bhutan and 142 deaths per 1,000 births—the highest in south Asia—in Afghanistan. Life expectancy is only around 60 years in Bangladesh, India, Nepal and Pakistan, whereas in Afghanistan—again the worst country in south Asia—it is a truly unbelievable 46 years. Were I a typical Afghan, that would leave me with only four more years to live.

Literacy rates are also very low, with Bangladesh having a male literacy rate of 53 per cent. and a female rate of 31 per cent., and Afghanistan having a male literacy rate of 51 per cent. and a female rate of only 21 per cent. If the literacy rates are split by sex, generally throughout south Asia women have a literacy rate of around 20 percentage points less than men. That literacy gap, with women achieving rates so much poorer than those of men, is one reason why the millennium development goals are so important. One of those goals is to achieve greater equality of outcome between the sexes. The other goals of eradicating extreme poverty and hunger, achieving universal primary education, reducing child mortality, combating HIV/AIDS, malaria and other diseases, ensuring environmental sustainability and developing a global partnership for development are equally vital in eradicating poverty in south Asia and throughout the world.

The Chancellor of the Exchequer recently told the International Development Committee that, at the current rate of progress, the millennium development goals would not be achieved for another 150 to 180 years. That dreadful prospect must focus all our minds this afternoon. At this point, I should like to pay tribute to the work of all the staff of the Department for International Development in the region, as well as the charity and NGO staff who are working to promote development in south Asia.

The first area that I should like to consider, on which the Minister has already touched, is education. As I said, the lack of universal quality education is a massive problem in south Asia. A recent report by the United Nations educational organisation, UNESCO, says that Asia has the world's largest share of children not receiving an education. Despite increased enrolment rates, 46 million children of primary school age are out of school, equivalent to 45 per cent. of the global population of youngsters not attending school. UNESCO says that Bangladeshi pupils are in the most crowded classes, with just one teacher for every 57 pupils and a primary school drop-out rate of around 35 per cent. There are examples in Asia of some classes of as many as 100 children.

A spectacular example of success in improving education is in Bangladesh, and is exemplified by the work of Plan International, one of the world's largest development organisations, founded in Britain in 1937. Plan sets up remedial classes for two hours a day before school. Primary education only lasts for two hours a day anyway in Bangladesh, and as a result of Plan's work 86 per cent. of the children have seen the 12-week course through to the end, which has resulted in a thirtyfold increase in children achieving grade A and a 94 per cent. drop in children obtaining grade D. The district council leader for the area concerned has been so impressed that he is introducing that idea throughout his district. Plan is lobbying the Bangladeshi Ministry of Education to introduce the idea nationally.

We should encourage the work of Plan and similar organisations. My party believes that more aid should be directed through NGOs, charities and the private sector, as such organisations are often more efficient, effective and, sometimes, accountable than the Governments to whom aid is given. Government-to-Government aid is money can mean—not always—the control of how it is spent is lost. The most striking example is the Tanzanian Government; when they were given £3 billion in debt relief to be spent on health and education, they spent the money instead on a new air defence system.

Combating HIV/AIDS and other diseases is vital to south Asia. More than 7.6 million people in south Asia live with HIV/AIDS, comprising nearly one fifth of the world's HIV infections, according to UNAIDS. By the end of 2002, more than 600,000 Indians were newly infected with HIV, increasing the official number of HIV-positive people to more than 4.6 million. If current trends continue, there will be more cases in India than anywhere else in the world. Furthermore, high-risk behaviours and infection rates are growing in most other south Asian countries. Unless vigorous and timely action is taken, those countries' risk of experiencing the devastating social and economic effects of the full-blown AIDS epidemics seen elsewhere in the world will become a reality.

My party has proposed five practical measures to fight the spread of HIV/AIDS. The Minister said that a new AIDS strategy would be published shortly. I hope that some of my party's ideas find their way into it. We want a much closer partnership between NGOs, pharmaceutical companies, the UN and the World Health Organisation. Aid to combat HIV should be spent on primary care, sanitation, clean water and education as well as on the necessary drugs. We want a significant proportion of the UN global health fund—the global fund to fight AIDS, tuberculosis and malaria—to be spent on anti-retroviral drugs. Given that more than 600,000 infants are infected by their mothers each year, we also want such drugs to be administered to pregnant women, which can be done for as little as 8 US cents per mother.

Does the Minister agree that Africa has something to teach south Asia? The Ugandan Government have managed to change personal behaviour radically with their ABC campaign—that stands for abstinence, being faithful and using condoms. Does the Minister agree that President Museveni of Uganda should be commended for giving so much impetus personally to that campaign in the Ugandan media, with the result that the AIDS epidemic has been better contained in that country than almost anywhere else in Africa?

I want to consider also the effects on south Asia of the lack of free and fair trade. That hugely hinders developing countries' attempts to get out of poverty. My party proposes an advocacy fund whereby developed nations provide resources for developing nations to secure representation of equal calibre to that which we send to trade negotiations. That would help developing nations to achieve greater success at World Trade Organisation talks.

United States protectionist tariffs adversely affect Pakistan, which is, coincidentally, one of the most loyal allies of the US. Pakistan has received no increase in US market access for textiles, which are by far its biggest export. A US Administration who believe in free trade should behave better. There is also concern that the US may act to hinder Indian information technology innovation following India's 63 patents in IT registered in 2003 alone. South Asian countries must also avoid putting tariffs on each other's products. As we saw recently, India put pressure on the Nepalese authorities to put a special tax on cooking oil exports, known as ghee, as Nepal can produce ghee more cheaply than it can. India has also severely limited Sri Lankan tea imports to 3,000 tonnes, which is a fraction of the demand for such tea in India. Restraints on free trade exist within the developing world, not just between the developed world and the developing world.

On 25 February this year, my hon. Friend the Member for Buckingham said that the trade injustice suffered by the poor is not the result of bad weather, defective infrastructure or a natural disaster. Indeed, it is not an accident at all. It is the knowing, deliberate and calculated policy of governments of the most powerful nations on earth. It is shameless and shameful. Effective aid requires fair trade … The Conservative Party will be at the forefront of those arguing for the decisive reform of our trading system. A system which is morally wrong, economically counter-productive and politically dangerous has had its day. It should be replaced by arrangements which are morally right, economically beneficial and politically wise. It is certainly the case that free and fair trade will greatly assist south Asia in combating poverty.

I was pleased that the Minister placed a focus on micro-credit. I hope that we see an expansion of micro-credit in south Asia. Micro-credit is a system of small loans aimed at helping poor people, for example, to buy a cow so that they can sell the milk. It is an incredibly simple and straightforward idea, and where it works it empowers people to look after themselves, rather than making them dependent on aid. Micro-credit has been increasingly targeted at women, with great success. One example of that is the Palli Karma-Sahayak Foundation, which has, over the past 10 years, loaned more than $140 million to 180 Bangladeshi micro-finance institutions. They have been able to generate $522 million in loans to the landless poor. Since 1999, the foundation has financed almost 2 million borrowers in Bangladesh, 90 per cent. of whom are women. There have been concerns that the International Monetary Fund and the World Bank are not giving sufficient priority to micro-credit work. I hope that the Minister assures us that the Government will be vigilant on that.

Will the Minister join me in saluting the strength of the extended family throughout much of south Asia? Does he recognise that a strong extended family network is an important bulwark against poverty in terms of mutual care and enables many families to join together to start small enterprises?

We should also consider conflict and social exclusion. Conflict makes poverty far more likely, so it is no accident that 20 years of fighting have left Afghanistan by far the poorest country in south Asia. Likewise, internal conflict in Burma, which is on the edge of south Asia according to the strict definition, has led to some 2 million people becoming internally displaced. Those people have little or no access to health care, food, shelter or education. DFID provides no aid to those displaced people in Burma, so I ask the Minister whether DFID would reconsider that policy, as that is urgently required.

The caste system means that 90 per cent. of those living below the official poverty line in India are the Dalits or, as we know them, the untouchables. There are some 260 million Dalits in south Asia, and I pay tribute to the Dalit Solidarity Network for its work in keeping this issue in the public eye. Caste discrimination is a gross human rights violation. What steps are the UK Government taking to make that point to the Indian Government? Does the Minister agree that without the attainment of rights, Dalit poverty is unlikely to be eradicated?

In conclusion, although the Commission for Africa is both welcome and necessary, we must not take our eyes off the needs of south Asia, where nearly half the world's poor live. It is my hope that this debate will play a part in raising the profile of the capabilities and successes, as well as the needs, of south Asia.

3.25 pm

Tom Brake (Carshalton and Wallington) (LD)

As is often the case with debates on international development, there is broad agreement among all parties. Indeed, there is even broad agreement on what constitutes south Asia, which is a good starting point. I will not run through the list of countries, although I agree that Burma is on the cusp and will refer to it.

As the Minister has set out, the statistics for south Asia are grim, and I should like to refer to two in particular. First, the proportion of the population whose income is less than half a dollar a day is expected to be 16.4 per cent. by 2015. According to a recent parliamentary answer, that will be the worst percentage apart from that in sub-Saharan Africa. Secondly, the Minister appropriately dwelt on primary education. South and west Asia are the worst performers in the continent for primary school enrolment levels and the ratios of girls to boys in primary school.

On that subject, the Minister will recall a recent debate during which the education of girls in Afghanistan, and their security in particular, was raised. The Minister's response was that the matter would be tackled through improving general security in Afghanistan, but I wonder whether any other developments have been made in the past few weeks given that that is a big source of concern in that country. We are also campaigning about the 100 million children who miss out on primary school education. Along with, I suspect, many other Members of Parliament, several of my hon. Friends and I will soon visit No. 10 and No. 11 to deliver some of the posters, letters and other artwork that we were given on our "MPs back to school" visits. Primary school education is clearly significant in the region.

I want to touch on the new DFID strategy for middle-income countries. I put on record my thanks to the Minister for his offer to meet me to discuss it, and I would like to take it up. The covering letter to the strategy states that middle-income countries receive more concessional aid than their levels of poverty and MDG-related needs would imply. There are only two middle-income countries in south Asia—the Maldives and Sri Lanka—but does that phrase indicate that concessional aid to middle-income countries will be reduced? If current aid is more than their needs would imply, one could draw the conclusion that it will be reduced in future.

Mr. Thomas

To reassure the hon. Gentleman, I should say that it is not that aid and concessional loans to middle-income countries need to drop dramatically, but that their proportion of aid needs to be rebalanced to reflect our priority for the poorest countries. As I indicated in my opening remarks, we believe that the overall level of our assistance needs to double if we are to meet the millennium development goals, in both the poorest and middle-income countries.

Tom Brake

I thank the Minister for his clarification. I take him to be saying that because the overall envelope is increasing, the level of funds that will be available for middle-income countries will not fall in gross terms, although as a proportion of spending it may be reduced; I understand that. He will be aware of the concerns expressed when a substantial sum had to be redirected from middle-income countries to the reconstruction of Iraq. That is an area that we will be watching closely.

The Minister rightly focused considerably on the issue of HIV/AIDS, as did the spokesman for the official Opposition, the hon. Member for South-West Bedfordshire (Andrew Selous). In south and south-east Asia about 5.2 million people live with HIV/AIDS. The pattern varies across the continent. I think that one can say that India is in transition towards a major epidemic and that, perhaps, the Government response has not been as forceful as it could have been. Going beyond south Asia, there have been some success stories in Thailand and Cambodia, so things can be achieved if the will is present.

In India, there are about 4.1 million cases of HIV/AIDS, and in Burma there are about 400,000 cases. During the debate that we had a couple of months ago we discussed the level of HIV/AIDS in Afghanistan. As things have moved on, I wonder whether there is more accurate information about that; the security situation does not perhaps allow it. During that debate the fact was highlighted that there were said to be about 30 HIV/AIDS sufferers in Afghanistan; one could almost count their numbers on the fingers of one's two hands. Clearly, it cannot be right or possible, particularly given the prevalence of drugs in that country, that there are only 30 cases. There is the potential for a significant increase in months or years to come, because we simply do not know what the starting point is.

It is worth drawing attention to what can happen—and did happen in Asia, but outside the south Asia boundary—when the will to tackle an issue exists. China decided that severe acute respiratory syndrome had to be tackled and that it could not be swept under the carpet. After an initial slow build-up, it was tackled with vigour. That is what we want the south-Asian Governments to do in relation to HIV/AIDS, because there is the potential for the prevalence rate to accelerate much more rapidly than in sub-Saharan Africa. That is possibly because of greater mobility, because of greater intravenous drug use or because of other things that point to a faster acceleration and diffusion of HIV/AIDS among the population in south Asia.

What should one be doing about HIV/AIDS? What should the UK Government try to assist with? We should be trying to help the leaders in the region to appreciate the potential for a significant pandemic, to get the matter discussed openly to reduce the stigma attached to it and, as other hon. Members have said, to ensure that any lessons learned in Africa are applied as quickly as possible in south Asia.

The Minister referred to the UK's contribution to the global fund. Will he say, either now or after publication of the final paper at the end of the consultation on the HIV/AIDS strategy, whether there is any prospect of the UK's contribution to the global fund being increased to match that of other countries, such as France? Various organisations are concerned at the UK Government's financial contribution.

The Minister did not dwell at length on conflict or, more specifically, defence spending. It is interesting to consider such spending in south Asian countries. With the exception of Bangladesh and Nepal, defence spending in those countries is greater than the Asian average, which itself is greater than in a number of continents. In most south Asian countries, defence spending is greater than in the UK; in 2002, UK defence spending was 2.6 per cent of GDP. We need to dwell on the issue of conflict and the UK's role in defence spending and procurement in the region.

Conflicts in the region include those in Kashmir, Sri Lanka—although that may be resolved—and Nepal, and there is a link between drugs trafficking and small arms. How does the sale of small arms affect the ability of countries in the region to deal with the millennium development goals?

Millennium development goal No. 1 is to eradicate extreme hunger and poverty. In rural areas such as Assam in India, local people have found that violence and insecurity have obstructed farming, so there is an impact on that. Clearly, the use of child soldiers, as in Sri Lanka, Nepal and Burma, has an impact on universal primary education. There is an impact on the health MDG; if there are conflicts, and many small arms and light weapons are in use, injuries are sustained and people impose demands on hospital services. There is an impact on gender inequality. Widows in Sri Lanka suffer from particularly bad poverty, because they are unable to work or remarry.

Finally, on the subject of MDG No. 7, environmental sustainability, armed conflict has facilitated illegal logging in parts of southern India. We need to consider the impact of small arms and the way in which their ready availability can affect the ability of south Asian countries to pull themselves out of the poverty trap. It is also appropriate to consider the UK Government's involvement. They are a regular supplier of arms to many countries in south Asia and, under criterion 8 of the EU code of conduct on exports, the UK must consider whether the selling of arms to a country will have a detrimental effect on its sustainable development. I hope that the Minister will set out how that assessment is carried out.

Presumably the assessment was carried out on the following arms sales, but I would like to understand how. Some £9 million worth of semi-automatic pistols and submachine guns were sold to, Bangladesh; that country is No. 139 out of 173 countries in the human development ranking. There were sales worth £118 million to India, which is at No. 127 in the human development ranking. There are also weapons exports to Pakistan and Sri Lanka. I hope that the Minister will be able to demonstrate to hon. Members that the sale of those arms does not have a detrimental effect on the sustainable development of the countries concerned.

I would also like the Minister to comment on the military gifts that have been funded by the global conflict prevention pool. In 2002, the UK Government bought two MiG-17 transport helicopters as gifts for the royal Nepalese army, which apparently cost just over £4 million. It appears that the source of funding for those purchases was the UK's global conflict prevention pool. Can the Minister tell us the purpose of that purchase and explain how those helicopters were helpful in reducing global conflict? I understand that, in December 2003, Britain agreed to supply two short take-off and landing planes to the Government in Nepal, again with funding from the global conflict prevention pool. Can the Minister confirm whether that is correct and, if so, whether those planes have now been supplied, and whether we will be given the opportunity to debate that matter in Parliament?

In the context of conflict prevention and arms sales, the Government should examine the development of national and regional action plans to tackle small arms. They should ensure that the small-arms issue is considered as part of any development programmes. It is also important that the Government explain—the Minister has the opportunity today—how military purchases can play a significant role in reducing global conflict.

The hon. Member for South-West Bedfordshire rightly dwelt on the issue of trade, which the Minister, if he mentioned it at all, touched on only briefly. Will the Minister tell us whether he considers trade to be of the same significance for the south Asian region as it is for Africa, or whether it is a lesser concern?

Debt is a significant issue for sub-Saharan Africa. In south Asia, a number of countries have significant debt. Does the Minister believe that we need to tackle that, or does he believe that the levels of debt in south Asia are sustainable and therefore do not require particular attention by the Government?

There is broad agreement on the way forward. The Minister rightly highlighted three areas that he felt to be significant: gender inequality, HIV/AIDS and maternal mortality. I hope that the areas on which I have focused are complementary to those. I also hope that the Minister will reassure me that the Government's policies are best designed to tackle poverty in south Asia and are in no respect contributing to that poverty.

3.44 pm

Ms Julia Drown (South Swindon) (Lab)

The Liberal Democrat spokesperson, the hon. Member for Carshalton and Wallington (Mr. Brake), said that there was agreement between the parties on policies and on the way forward. I wish that that were the case. One would expect that in the face of such desperate poverty, everyone's human response would be, "We need to do more." It seems obvious that more resources need to reach the developing countries and particularly the poorest people in the developing countries.

It seems nasty to bring party politics into the debate but, in a democracy, it is important to outline the difference between the parties. The truth is that this Government have massively increased aid to the poorest countries, and I am proud of that. They have doubled it; they have increased the aid budget from 0.26 per cent. to 0.4 per cent. of national income. We inherited a declining aid budget because, under the Tories, there was a reduction in the amount of money that went to the poorest countries. That is disgusting, and I know that the people of this country do not support it. The Tories talked about the need for better aid and spending it better, but that is no excuse for reducing the amount that we spend. We can afford to give more and, ultimately, it is in our interests to give more. However, the Conservative party does not say that it made a big mistake and that hundreds of thousands of people died.

Tom Brake

I did not want to make a political point, but now that the hon. Lady has opened a window of opportunity, I will state that there are issues relating to the funding levels under the Conservatives. The Liberal Democrats support the measures that the Government have taken, and our current commitment is to achieving the target of 0.7 per cent. of gross national income within two parliamentary terms.

Ms Drown

I am grateful to hear that. It is an important commitment. However, many Liberal Democrat spending commitments are worthy, but there are often questions about whether their sums add up. Nevertheless, that 0.7 per cent. figure is great. The hon. Gentleman is right that a timetable is needed to achieve the target, and we need to achieve it as soon as possible. Is the Conservative party's position now going to change? That would be nice.

Andrew Selous

It is no secret that my party is carefully examining all areas of expenditure. On the matter under discussion, we are guided by the principle that the money must get through to the front line. We will have more to say by the autumn of this year.

Does the hon. Lady agree that if we are to get broad public support for aid expenditure, it is vital that the public have confidence in the way that that money is spent? It is important to talk about corruption and the importance of ensuring that the money goes directly through to the front line because that needs to be seen to the case if we are to get broad public support. I hope that we share common ground on that point at least.

Ms Drown

The hon. Gentleman is right that it is important that the public have confidence in how the money is spent. However, although corruption must be discussed and tackled, we must not use it as an excuse for not doing more. I hope that the autumn announcement to which he referred will mean that all the main parties are committed to achieving the target of 0.7 per cent. by 2008 or sooner. This country can afford that. Until the Tories make that commitment, the people of this country need to know their record; the Tories reduced overseas aid and their current statements suggest that they will reduce it again.

Andrew Selous

For the record, I want to make it clear that my party has stated that it is examining public expenditure options and that our emphasis is on putting the front line first. We have not said that we will cut international development aid.

Ms Drown

I am pleased to hear that, but it does not sit comfortably with the public statements by your overseas development spokesperson that the current limits being given to him involve a reduction and are unacceptable.

Mr. Deputy Speaker

Order. The Chair does not have any personal spokespersons.

Ms Drown

Thank you, Mr. Deputy Speaker.

I will now move on to some of the issues that I urge the Government to tackle. The grinding poverty in south Asia has been mentioned. It can be difficult to grasp that hundreds of millions of people there are living on less than a dollar a day. Although some poverty reduction there has been effective, it is depressing to think that, over the past few years, poverty has increased in some countries.

Sometimes it is Conservative ideology that growth in such countries will achieve poverty reduction. That is not enough. In south Asia, the economies of some countries have grown. For example, in Bangladesh there was average GDP growth of about 4.8 per cent. in the 1990s. However, the rate of poverty reduction over the same period was only 0.9 per cent. a year in urban areas and 0.4 per cent in rural areas. Of course we must work to achieve growth, but we can attack poverty only if there is pro-poor growth.

There is cause for optimism and it is important always to stress that aid works. Mistakes will always be made and some projects will go wrong, but, overall, projects are undoubtedly hugely effective at saving millions of lives. They also improve the quality of people's lives. For example, adult literacy in Bangladesh has increased in just 10 years from 35 per cent. to 60 per cent. of the population. There is a big difference between the genders, but progress is still being made. Gender disparities are real worries, and they are worse in this region than elsewhere. Levels of maternal mortality are among the worst in the world.

Recent assessments of poverty reduction strategy have pointed out that, to achieve what I hope we all want, four factors are critical: pro-poor growth, governance, gender and data availability so that people know where to put resources and where to tackle poverty. In light of the desperate poverty that we are all aware of, it is amazing that in south Asia, three of the most heavily indebted poor countries—Laos, Myanmar and Vietnam—are repaying debts to the richest nations in the world.

Two other countries that are not involved in the heavily indebted poor countries initiative, but that were included in the original Jubilee 2000 list of 52 countries are Bangladesh and Nepal. Bangladesh joined the World Bank in 1972 soon after independence, and the concessional arm of the World Bank—the International Development Association—has since financed more than 169 operations. Bangladesh, which is a desperately poor country, has loans of $9.5 billion and is repaying $790 million every year to the World Bank and rich nations. That is the same as it spends on public health each year. Three quarters of the population live on less than $2 a day. Will anything more be done to reduce the debts of the likes of Bangladesh and Nepal, which have just fallen outside the HIPC initiative? That is clearly important.

As well as urging people outside the Government to continue pushing for more to be spent on overseas aid, I urge the Government to spend more. I am proud of what we have done, but it is immensely important to continue. A comprehensive spending review is ongoing and we need to achieve the target of 0.7 per cent. of GDP being spent on aid. That target was agreed by the international community more than 20 years ago. We are known to lead the world on debt relief but, on aid, we are in 11th place on the list of Organisation for Economic Co-operation and Development donors. The target is affordable. If we fulfilled the commitment to reach 0.7 per cent., we would give $3.5 billion extra each year. We must consider what that money would mean for the people, which is what matters after all. We could get another 1.5 million people out of poverty if we spent that sum.

It is important to link the need to reach that target to the international finance facility, as the Chancellor of Exchequer is always keen to do. He is right—if we and many other countries doubled aid, we still would not achieve the millennium development goals. However, our work through the international finance facility is not an excuse for not reaching the target. The payments needed to repay our loans from the international finance facility could rightly come out of the international development budget because they are part of it. Countries could ask, "Why should we support the international finance facility if you haven't delivered on the last commitment to achieve 0.7 per cent.?" The two must run hand in hand.

Let us consider what that would mean in terms of spending. To achieve the target by, say, 2008 would account for less than 2 per cent. of the Government's spending. Given our rate of increase since the 2002 comprehensive spending review, we would be on course to achieve 0.7 per cent. by 2012. Bringing the target back to 2008 is not impossible; it is affordable. As Bob Geldof rightly said in the House of Commons recently, "They can't afford for us not to do it."

I am talking about achieving the millennium development goals not only in aggregate terms, but throughout all regions including south Asia. My constituents care about such matters. I receive many letters from them in which they say that such action is right not only morally, but in terms of what we need to do as a country. We must expand our market towards future employment and growth. Such action is also in the interests of security. Given all the debates on security that are rightly taking place, we must ensure that our defence budget is protected at a reasonable level. However, there will come a point at which there will be a debate about defence spending and international aid, at which time I shall say that we have made a commitment and that, ultimately, it is in the interests of our security to make the rest of the world secure. Let us ensure that that is at the top of the agenda.

I shall now touch on a couple of other issues to which I should like the Minister's response. Which economic institutions could be changed to help us achieve the millennium development goals in south Asia? I support other speakers who have called for developing countries to have a bigger voice at the economic institutions, especially the World Bank and the International Monetary Fund. Their voice is not heard strongly enough. They need a louder voice, but they also need more votes on those bodies. Does my hon. Friend support such a proposal?

Too many actions have taken place behind closed doors. What is being done to open up decision making at such levels to make decisions more accountable? I am referring not only to appointments to key institutions, but to the main decisions that are made at such places. Let us consider the HIPC initiative. Much more could be done for Laos, Myanmar and Vietnam. Ireland has said that it would give 100 per cent. backing not only to bilateral, but multilateral debt, cancellation for all the heavily indebted poor countries that have good poverty reduction plans. However, most of them are struggling to meet the millennium development goals. Will the Government support joining Ireland in that project? It has been calculated that it would cost UK taxpayers only £3 a year for the next 10 years. The Government can afford to join Ireland in that proposal.

The countries exiting the HIPC process must be in a sustainable position. That was the whole idea of HIPC, yet it has not happened. The World Bank accepts that. Let us consider the 20 countries that have already reached the decision point. Four will have higher debt service repayments than they did in the late 1990s, and five countries will pay almost as much in debt service repayments as they did before the HIPC initiative even started. It is clear that something is still going wrong and that a solution must be found. I should be grateful if the Minister could say what more we can do to achieve debt sustainability. Clearly, one issue of concern is the criteria that are being used. Do the Government support completely revising the criteria from the debt to export ratios and to considering achievement of the millennium development goals, which we all care about?

We could become complacent about the millennium development goals, but it would be time for a huge party if we achieved them. However, we would not be able to go home after the party, but would have to concentrate instead on what more there is to do. Even if we halve world poverty, we will still have to deal with what is left. Let us achieve our millennium development goals, but I hope that the Minister will respond to my key points about economic institutions.

We know that trade issues for south Asia can outweigh some of the help that they could receive in debt relief and aid. That is important. Non-governmental organisations continue to campaign on the issue of developing countries being forced to liberalise and privatise parts of their economy even though the Government say that that is not so and that those countries can make their own decisions. Will the Minister confirm that this country does not want to force policies on developing countries that do not seem to be in the interests of their poor people? Could we say publicly that we would support any developing country if it were pressurised in negotiations into liberalising or commercialising a sector in a way that was not in the interests of its poor people?

We as a country have said that we will not include UK public services in the negotiations on the general agreement on trade in services at the World Trade Organisation, because we do not want our services to get involved in any of the binding agreements that are made there. Can we not say that we would extend the same support to all developing countries, so that they would not need to include their public services in those negotiations?

Some key sectors, such as agriculture, are important for south Asia and other developing countries. Such sectors deserve protection—for example, to promote food security and to provide sustainable livelihoods. Are the Government pressing the international community to support the right of developing countries to protect such vulnerable sectors to deal with problems around falling commodity prices? Those countries need a desperate turnaround to tackle the over-supply that leads to commodity prices crashing and to promote diversification in those sectors.

Can we have an update on what is happening on common agricultural policy reform? We still need radical CAP reform. Will that be one of the central planks of our presidency of the G8 group next year? We should be working to end all agricultural export dumping and eliminating all forms of domestic agricultural support, some of which acts as hidden export subsidies. We should be doing more—and I hope that the Minister will tell us that we could do more—to get more duty-free and quota-free access for all products from the least-developed countries in south Asia and elsewhere.

There has been some talk about health issues and drugs. There is currently much debate about the trade-related aspects of the intellectual property rights agreement. I hope that the Minister will assure us that we will support the reform of that agreement, so that poor countries can get new technologies for basic medicines and farmers are able to save, exchange and sell the seeds that they need. There should not be developed world agreements that stop the exchange and growing of crops in the poorest countries in the world.

Finally, basic institutional reforms are needed at the WTO. It is unbelievable that several issues are not clear. They include the basic text on which people are to start negotiating, the terms of reference for the chair and the friends of the chair, and the procedures for preparing drafts. At the moment, it is not easy for developing countries in south Asia and elsewhere to get different views or options presented on the papers. Until that process is opened up, it is not going to be as easy as it should be for south Asian countries to get their issues on the agenda of the WTO. We need a realistic timetable for the completion of those talks, and developing countries in south Asia and elsewhere need to be involved in discussing and agreeing it.

There are many issues to consider, but they are all about achieving the millennium development goals. There is a need to address the desperate poverty in the developing countries and I hope that the Minister gives us grounds for optimism on further reforms on trade and on more debt relief for the countries in HIPC and those just outside it. I also hope that he does all that he can to push the increase in the aid budget to 0.7 per cent. by 2008 in the comprehensive spending review—or to 0.7 per cent. by 2007, which would be better.

4.4 pm

Julie Morgan (Cardiff, North) (Lab)

Thank you for calling me to speak in this important debate about poverty and south Asia, Mr. Deputy Speaker. I want to take this opportunity to talk about poverty in India because I recently visited that country with an all-women group of Members of Parliament. It is an exciting and exhilarating country to visit, and we were given a tremendous welcome as a group of women MPs.

The fact that we were all women gave a particular perspective to the visit. As we travelled around, we met many women politicians, women entrepreneurs and women living in different communities. We were certainly struck by the growth of the economy and the confidence that there seemed to be in the country. India is Asia's third largest economy and explosive growth has been predicted in the years ahead. Gross domestic product rose by 7 per cent. last year and the economy grew by 10.4 per cent. in the last quarter of 2004. On our trip we had an optimistic, forward-looking view of India, yet today we have talked about the grinding poverty there, too. Obviously, for Indians who live below the poverty line, it is small comfort to know about the surge of growth, unless it is reaching them.

The Minister has already given us the figures on the poor in India. UN figures suggest that nearly 35 per cent. of people live on less than a dollar a day. On our visit we saw visible signs of poverty, such as people sleeping on roadsides in Calcutta and rural hardship. However, we must also recognise the great progress that has been made: poverty has been almost halved in the past 20 years. The Minister said that he was optimistic and, after visiting India, so am I. I felt that great progress was being made.

In India, the poorer a person is, the more rural they are. That issue may possibly account for the results of the Indian election. We do not know exactly what they are yet, but it looks as though the Congress party has had an unexpectedly strong showing.The Guardian has said that its success has been based on a campaign that championed the rural poor, who they say have been left out of India's new prosperity. It will be interesting to see the final results. The Bharatiya Janata party's "India shining" slogan seems not to have connected with those who feel excluded from India's economic growth.

We are in the middle of getting the results of the elections, so I am not sure about the outcome. However, like the Minister, I pay enormous tribute to India for the fairness of the elections. The Minister referred to the use of technology. Nearly 380 million people voted in the past three weeks, which is a tribute to India; it is a great democracy. It will be interesting to see whether the final results relate to what is going on with the rural poor.

The problem of HIV/AIDS in India has already been mentioned. I welcome what the Minister said about the new strategy that will be announced. I do not know whether he can say any more today about what the proposals will be. It is predicted that India will have more HIV positive people by 2005 than any other country in the world. As has been said, India ranks second for infection after South Africa, with the infected population estimated at 4.58 million. It is big problem in rural communities And 70 per cent. of India's population lives in the countryside. In cities, there is at least some access to information, condoms and HIV tests. The poverty in rural areas means less access to services, which clearly does not help the public health situation.

We need to think of poverty as a human rights issue as much as anything. In India, we met Dr. Justice Anand, chair of the National Human Rights Commission. He said that poverty is the most serious violation of human rights and is destructive of all rights. Poverty means, for example, that people are denied the right to good maternal care, child care, and education. Access to education is so important; it is one of the millennium goals that we most want to achieve. Poverty also means that human rights are often abused, as it leads to child labour, bond labour and human trafficking.

People in India told us that they thought that in 10 years poverty and its accompanying problems would be eradicated. With the huge surge in growth in India we hope that that will be true, but it seems optimistic when one thinks of the numbers involved. However, the UK, particularly the Department for International Development, has done an enormous amount to help eliminate poverty in India, which is the Department's biggest partner state. It receives more UK development assistance than any other country and the £100 million programme, which is managed by the Department, is trebling in the year 2004–05.

The Department works with four partner states, one of which is West Bengal. When the people I met there heard that I was a Member of Parliament from Wales, they said, "Oh, you have lots of doctors from West Bengal in Wales, so we are doing a lot to help you." When we discuss aid and assistance it is important to acknowledge what we have received from India. From his background, the Minister will appreciate that, because the valleys of south Wales have depended on doctors from West Bengal to keep the health service going. It was interesting that people made that point strongly.

When I asked if people resented doctors going to the UK, they said, "Certainly not." They said that they often came back with skills that they had acquired in this country. There was no resentment. People felt that it was a two-way process. Given my Welsh background, I was very interested in what they told me. We must remember in this debate what we receive from countries such as India.

One of the highlights of the trip was a visit to the DFID Calcutta slum improvement project, which is a model scheme—one of the really good, progressive ways to deliver development. It illustrates how a small amount of money can make a huge difference to people's lives, especially by empowering women. Its participatory nature means that the people living there are partners in the project and that improvements in the physical environment result in the development of a community.

When we visited we were mobbed by a huge crowd of children. It was mainly women who talked to us, telling us what they had been able to achieve. The money that the Department had provided and the work of its officials had undoubtedly made a huge impact on empowering people, especially women, who showed us the types of work that they were doing.

The project focused on sanitation, personal hygiene practices, nutrition, training on income generation activities, credit programmes and literacy. Until I visited the project, I was not aware of how powerful relatively small amounts of money could be when invested sensitively or that such excellent results could be achieved. The end-of-project report referred to the impact of the project and the increase in women's self confidence and their awareness of health and hygiene. It also mentioned how the communities function and people's increase in awareness about laws and rights relating to women in the household, as well as within the community. One result of the project was that women started to increase their family income by getting work and developing within the community.

The interests of women are addressed in the Indian constitution and initiatives, such as the 2001 national policy for the empowerment of women in India, are to be applauded. In all the development work we are involved in, it is essential to ensure that women's interests stay in the foreground and that women obtain all the services that they need.

As has been mentioned, there is a problem with maternal death in India. The DFID points out that maternal deaths during childbirth are estimated to be well over 300 per 100,000 live births, compared with 7 per 100,000 in the UK. Those huge inequalities throughout the world cannot be tolerated. I agree with my hon. Friend the Member for South Swindon (Ms Drown): it is an issue that we must use all our powers to tackle because it is our duty to do all that we can to reduce such inequalities.

The White Ribbon Alliance for Safe Motherhood points out that in India one woman dies every five minutes from a pregnancy-related cause. As the Minister said, deaths and pregnancy-related problems can be solved by medicine. However, we must have well-directed resources. Some 130,000 women in India die every year from complications in pregnancy and childbirth, almost all of which could be prevented. Progress is needed here. I compliment the Department on its work, although we still want more action. We must continue to support its projects, such as the one that we saw in Calcutta, where there was a participative element and where people are working in partnership and being empowered.

I also agree with my hon. Friend the Member for South Swindon that it is important to reach the target of 0.7 per cent. of GDP that is recommended by the UN. Many European countries have already reached that target: Denmark, Norway, Sweden, the Netherlands and Luxembourg have achieved it, and Ireland, Belgium and France have set clear timetables to achieve it by 2007, 2010 and 2012 respectively. We are one of the richest countries in the world and we must set a timetable to reach that target. It is the least that we can do. I hope that the Minister will use all his influence to persuade the Government to set a timetable, so that we know exactly where we are going and when we will reach the 0.7 per cent. target. It is intolerable that inequalities exist across the world.

I support calls for greater debt relief and the international finance facility that the Chancellor has introduced. The Government have an excellent record, which is appreciated and understood by many people. The hon. Member for Carshalton and Wallington (Tom Brake) mentioned the back-to-school day. I took part in it and went to one primary and one secondary school. Primary school children understand the global economies and the importance of tackling their problems. I probably receive more letters and cards about international development and the issue of unequal resources than almost anything else. As Members of Parliament, one of our greatest duties must be to ensure that our prosperity in this country is spread throughout the world.

To return to our visit to India, I felt tremendously optimistic. We felt the sense of friendship with the UK, as well as the economic strength of a vibrant and thriving nation, although it sat alongside grinding poverty. One of our greatest aims must be to share prosperity throughout the world.

4.20 pm

Ross Cranston (Dudley, North) (Lab)

I congratulate my hon. Friend the Minister on opening the debate. He set out clearly our commitment to the millennium development goals and identified the three special features of the work in Asia by the Department for International Development, which relate to education for children at school, the HIV epidemic and maternal mortality. He has long had an interest in these issues, and as chair of Labour Friends of India did a magnificent job of coalescing concern on the Back Benches. I imagine that, on a day such as this, my hon. Friend the Member for Middlesbrough, South and Cleveland, East (Dr. Kumar), who is sitting behind the Minister, regrets having taken on the job of Parliamentary Private Secretary, because if anyone is qualified to contribute to the debate, he is. I know his commitment to the subject.

I shall take a different tack from other hon. Members by raising the issue of institution building in south Asia, especially involving the financial system, and its contribution to reducing poverty. I do so because, for the 10 years before I was elected to Parliament in 1997, I worked as a consultant for international financial institutions such as the World Bank. I hope that that does not condemn me in the eyes of my hon. Friend the Member for South Swindon (Ms Drown). I started in Sri Lanka in 1988, spending about five years going back and forth to that country and helping it to develop the laws to achieve a properly operating financial system. I then worked with the person who is now the dean of the national law school in India. Perhaps the most interesting project involved drafting a law in Bhutan. Coming from that background, I suggest that institution building is crucial to addressing the problem of poverty.

A story in theFinancial Times several years ago entitled "Gandhi and the Milk of Indian Self-Reliance" started by focusing on Mrs. Parmar, a landless labourer in Gujarat. She was 35, had two buffalo and earned 20 rupees from selling the milk every morning and evening. That was crucial for her: she was a widow with three children to raise and, apart from the milk money, her only source of income came from working in the fields during the planting and harvest seasons.The Financial Times quoted her as saying: I can get credit from the shop owner on the basis of this milk money. Effective credit allocation and recovery are therefore central to the proper functioning of an economy, and their achievement can be measured in terms of the goals of economic efficiency and social justice. One can see other dimensions to social justice in the credit system. For example, there should be no discrimination in decisions about credit allocation. I shall return to that.

There can, of course, be disagreements over the type of system that one should construct for credit allocation and debt recovery. Our system has worked on the assumption that the most economically efficient course is for creditors to have a legal right to recover their money relatively straightforwardly when someone defaults. We assume that, if a creditor chooses to exercise that right, the money, or at least some of it, can be recovered and allocated to someone else. In a way, the traditional money-lending system in villages in south Asia also worked on that basis.

Essential to a proper credit system is a range of provisions, several of which I shall mention. One is an effective bankruptcy law. Recently, the Asian Development Bank produced a report on the importance of insolvency law to an effective and efficient economy. There can be disagreements about how that insolvency law will operate, and one example is the effect on employees. We have always said that the employees should have some preference, such as in relation to unpaid wages. I would certainly defend that.

For many years in India there has been something called the Sick Industrial Companies (Special Provisions) Act, which was passed in 1985. When a company got into financial difficulty it could go into this special category of being a sick industry. There has been a lot of controversy over whether that is the most efficient way to deal with insolvent businesses. Employees argue strongly in favour of that Act because they say that it enables a period of respite in which a business might be able to recover itself. I do not deny that there are disagreements over how credit systems ought to be cast, but an efficient credit system, such as I referred to in the example of Mrs. Parmar, can be important in dealing with the very poorest.

Let me move from the credit system more generally to the banking system. Again, the viability of banks and other credit providers such as development banks is crucial. In the Asian economic crisis in the late 1990s, which mainly affected south-east Asia, the problem of banks with an enormous portfolio of bad debts was uncovered. That also affects some banks in south Asia, in particular state banks. The problem is that where there is large portfolio of bad debts, the credit providers—the banks—may become more risk averse. They may not want to tackle innovative schemes whereby credit can be provided to the poor.

Traditionally, in the economic literature the argument would be that credit providers would turn to Government bonds because they are an extremely safe bet in terms of investment. Getting the banking system right and ensuring that it operates effectively and efficiently is crucial. One aspect of that is tackling the portfolio of bad debts, although there are other particular challenges. Pakistan has committed itself to adopting Islamic law in the banking sector. That is a challenge because it has to overcome the problem of interest-based Riba transactions.

Effective regulation of the financial and securities markets is needed. My hon. Friend the Member for Cardiff, North (Julie Morgan) described the sense in India that the economy is booming, and the financial system seems to have worked very effectively in the past couple of years. None the less, there has been concern about whether there has been adequate supervision of the financial sector and whether there has been a failure properly to address and monitor some financial risks. One could talk of a range of institutional remedies or solutions that might be posited. For example, one study in India suggested that the lack of separate collection departments in banks was a problem. Banks did not have proper workout departments to address the problem of borrowers who got into difficulty.

There is a political dimension to the way that financial institutions operate. Let me give one illustration. From 1967, India adopted the system of priority sectors, the reasoning for which was perfectly sound. Until that time, the bulk of bank advances had gone to large and medium-sized business, mainly because they could provide security. That meant that the agricultural sector and small-scale industries did not receive sufficient finance, so India introduced the system of priority sectors. That meant that loan money went from state banks to rural business, which had many important ramifications. For example, it meant that state banks had effective branch networks throughout the country.

There has been criticism of that policy, which has been liberalised in recent years. One argument was that lending was often done without a proper evaluation of the causes being funded and without proper monitoring. Some empirical evidence in India suggests that borrowers in rural areas, such as farmers, were under the impression that credit was being made available as a political handout and did not have to be repaid.

Another aspect of the political dimension is a problem that a prominent lawyer in Pakistan drew to my attention several years ago. He told me that there was a group of large borrowers who could use their political influence to get loans in the first place and then to forestall and divert recovery proceedings. He described a small group of wilful defaulters who obtained their loans fraudulently and who were not above using threats of violence, blackmail and other mafioso tactics to obstruct effective recovery. He was describing the situation in the early 1990s. In so far as such practice was possible, it meant that money did not reach other causes that would address poverty.

On an institutional point, a problem has been identified in a recent report by the Asian Development Bank entitled, "Secured Transactions Law Reform in Asia: Unleashing the Potential of Collateral". If people cannot provide collateral, they will not always get finance, and certainly not from established financial institutions. They may get it from moneylenders, but not banks. If a person owns land, that is fine because they can provide collateral. However, we are talking about a large number of landless people.

The Asian Development Bank report said:

Private creditors in all countries … worry about getting their loans repaid. Everywhere, when the debtor can offer them collateral for a loan, private creditors offer larger loans, at lower interest rates, payable over longer periods of time. Compared to a debtor who cannot offer good collateral, one with such collateral can anticipate receiving six to eight times more credit, taking two to ten times longer for repayment, and paying interest rates 30 per cent. to 50 per cent. lower. One might argue about those figures, but the point about collateral remains the same. Institutionally, registration systems can be introduced to address that issue. The Asian Development Bank report argues for a comprehensive registration system for security. We do not have that in this country; we have a patchwork of registration systems for collateral. However, there is an institutional goal that would facilitate more credit being advanced. It might enable people such as Mrs. Parmar to raise more money. Collateral could be not just property, but other things such as crops. A small tenant farmer might be able to raise more credit on the basis of a crop that he will harvest at the end of the season. Although such considerations seem rather esoteric and far removed from the aim of poverty reduction, I believe that they have an important role to play.

I want briefly to mention the realisation of security when things go wrong. In most cages, lenders will not anticipate things going wrong, but if they do one must realise the security impact. That was why I was in Sri Lanka in 1988, because my report for the World Bank addressed that problem. As long ago as 1977, the banking laws committee in India recommended more extra-judicial powers in respect of security as a method of making the system more efficient. In 2002, the Indian Parliament passed an important ordinance on the reconstruction of financial assets and enforcement of security interests, which also addressed that problem.

The final institution that I want briefly to mention is the courts, in which I take a particular interest because of my legal background. All international financial institutions now say that unless a country has an efficient and effective court system, it will not achieve maximum economic growth or, I would add, achieve the goals of implementing human rights. A well-functioning court and legal system is indispensable to a successful economy and to maintaining a system that recognises and enforces human rights.

As in all such matters, we do not have all the solutions. My hon. Friend the Member for Cardiff, North talked about how Wales has benefited from what was done in India. There is a great fashion in our legal system for alternative dispute resolution, but that has been done for years in India. More recently, on the initiative of the Chief Justice of India, we have seen a system involving so-called lok adalats, in which judges go out to villages to address the disputes of ordinary people, such as family, property or accident disputes. The system seems to have worked effectively, and we can learn from that. The Supreme Court of India, with its decisions on public interest matters, has been looked to from around the world. We do not have all the answers, and we can use some answers from south Asia to our benefit.

There are problems in the court systems. Some have enormous delays, which undermine the efficiency of their operation. The international financial institutions have recognised the importance of court systems and have provided aid to them. Some aid has been fairly simple—to buy books for judges, refurbish courthouses or provide judicial training. Simple provisions can have beneficial effects.

The problems that have to be addressed were recognised a long time ago by the Law Commission of India. I have already mentioned delays in the system, and more recently the Asian Development Bank spoke about the procedural obstructions that lawyers can use. Paragraph 293 of its report states: Dilatory defenses to slow the court process were identified in several of the countries. These included, in Pakistan for example, denying notice was received, filing unnecessary applications, and calling for adjournments because lawyers are not available, witnesses would not be properly notified, or government agencies (and others) have not produced documents. These defenses could delay by many months. India … reported similar tactics. The former Chief Justice of India said that the problem is not necessarily with the procedures, but how they are operated. He suggested that judges had to be much tougher in getting a grip on cases and dealing with obstructive tactics by lawyers.

In opening debate, my hon. Friend the Minister mentioned the problem of corruption. Unfortunately, one comes across petty corruption among court registry staff, for example, which means that files go missing and dates for court hearings do not eventuate.

The world community has an enormous issue to address. There are huge inequalities, poverty and the mortality associated with it. As my hon. Friend the Member for South Swindon said, there is enormous concern in this country. I, too, participated in the back-to-school day and found that the children at Bramford primary school regard this issue as a real problem. It is a moral problem that we must address. This is a matter not simply of money being spent on these important issues, but of ensuring that the institutions are right too.

4.41 pm

Mr. Thomas

With the leave of the House, this has been an excellent debate. I pay tribute to the hon. Member for South-West Bedfordshire (Andrew Selous), who is representing his party for the first time at the Dispatch Box, so to speak. Similarly, I pay tribute to the hon. Member for Carshalton and Wallington (Tom Brake), my hon. Friends the Members for South Swindon (Ms Drown) and for Cardiff, North (Julie Morgan) and my hon. and learned Friend the Member for Dudley, North (Ross Cranston). I will try to do justice to their contributions by picking up on a number of specific questions.

I should like to thank hon. Members who have praised officials working for the Department for International Development. I join them in highlighting and praising my officials, particularly those who work in difficult environments, such as those officers in Nepal and Afghanistan whose security can, on occasions, be under threat. We owe them a debt of gratitude for their work. Similarly, I want to place on record my recognition of the considerable quality of work that is done by many NGOs operating in the region. We have heard a number of examples of the excellent work that they do.

The hon. Member for South-West Bedfordshire referred to the ongoing debate about whether more money should be put through NGOs or government institutions. I think that it should go through government institutions. There is a case for putting more money through NGOs, but one needs to recognise that although NGOs can help in particular areas and help particular groups of people, they never have the reach of government machinery. A key role for the development community is to strengthen the capacity of Governments to help all their citizens in their countries and deal with poverty in that way.

One way in which we work with Governments is to address the issue of corruption and the effectiveness of institutions. That is brought most starkly into relief in Afghanistan, where after 25 years of internal conflict, government by the end of the Taliban regime was completely ineffective. A key job of the international community and the Transitional Administration is to develop the capacity of government, not only in Kabul but in the regions, so that basic services can be provided. NGOs are helping to bridge the gap, but they cannot plug it. In the end, it is only government that can deliver services to all the people. That is why we seek to work through Governments, while also recognising the contribution that NGOs can make. That is a telling point in the light of the comments of my hon. and learned Friend the Member for Dudley, North on institution building in developing countries being a necessary part of the work DFID does and should continue to do.

The hon. Member for South-West Bedfordshire alluded to work by UNESCO, highlighting that Asia has the largest number of children who are excluded from access to primary school education. In January, I took some delight in being able to go to Bangladesh to announce a UK commitment of £100 million to support the primary education development programme of the Government of Bangladesh. That will help to ensure that over the next six years 17 million more children each year will have access to the kind of quality education that we take for granted.

The hon. Member for South-West Bedfordshire and other hon. Members alluded to the threat of HIV/AIDS in Asia. My hon. Friend the Member for Cardiff, North talked about her visit to West Bengal with other members of a Labour Friends of India delegation, and she will be pleased to learn that we are giving £123 million to support the national AIDS control organisation in India to develop effective responses in the fight against HIV/AIDS. I also went to West Bengal, where I visited a clinic in a brothel in the Sonagachi slum. In discussions with a number of people receiving care and support at the clinic, I learned of the huge amount of stigma and discrimination that surrounds HIV/AIDS. That problem is as big in Asia as it is in Africa. I pay tribute to those who work in the clinic for what they are doing for the sex workers in that brothel by helping to get out information on how to prevent the spread of HIV/AIDS. Prevention work must be an essential part of our continuing fight against HIV/AIDS. Although I cannot give my hon. Friend details about what will be in our strategy on HIV/AIDS, I hope that I have given her a reasonably big clue that prevention is of continuing importance.

The hon. Member for South-West Bedfordshire rightly highlighted the importance of political leadership in the response to HIV/AIDS. He paid tribute to President Museveni of Uganda. Other places where political leadership has made a difference include Senegal and Brazil. Scaling up the response of politicians in south Asia and working with them to deliver an effective response in the fight against HIV/AIDS must be a continuing priority for the Department.

The hon. Member for Carshalton and Wallington asked whether I could announce new funding for the global fund. I think he asked that with his tongue slightly in his cheek because he knows that I cannot do that yet. However, I will take that on board in our consultations and as we prepare our strategy. I know that the hon. Gentleman would want me to point out that we have increased sevenfold our funding for HIV/AIDS in general terms throughout the developing world since we came to power in 1997, but I accept that we need to do more. That is why we are putting together the HIV/AIDS strategy.

The Member for South-West Bedfordshire asked about Burma and the issue of internally displaced people. As he rightly said, we have not so far supported programmes providing for internally displaced people across the Thai-Burma border, as much as anything else because we do not have access to the areas in which such people live and we are not able to assess their need, nor monitor and evaluate the use of funds. However, we are reviewing our policy on cross-border assistance as part of the overall review of what we are doing in that part of the world. I will consider the point that the hon. Gentleman made in that light.

The hon. Gentleman also asked me about the work of the International Dalit Solidarity Network. I join him in praising its work and I look forward to addressing its annual conference in June. Caste, and social exclusion more generally, is part of our dialogue with Governments in the region. We look to support networks for the socially excluded, including the International Dalit Solidarity Network.

The hon. Member for Carshalton and Wallington asked about security in Afghanistan. Since the debate in January, further forces have been committed to increase the sense of security in Afghanistan. There are 12 provincial reconstruction teams in place, a further six are planned and the UK is considering sending a second provisional reconstruction team. I do not wish to imply that such action will resolve the security issue. The continuing attacks on and recent murders of aid workers have brought graphically into relief the threat that faces not only our soldiers in Afghanistan, but those working in the development community. However, the roll-out of the provincial reconstruction team process and our significant support to help the development of an Afghan army and police force will, in time, bring the security benefits that we all want to see.

The hon. Gentleman also raised the issue of the split between the assistance given to middle-income countries and low-income countries. I come back to remarks I made at the beginning, which were picked up by other hon. Members: if we are to achieve the millennium development goals, we have to achieve a doubling of international aid levels from $50 billion to $100 billion. In that context, we need to aid both middle-income and low-income countries. However, when like is compared with like, the middle-income countries receive proportionally more aid than low-income countries. That is one of the reasons why we have decided to put 90 per cent. of our aid resources into low-income countries. That is the right decision.

Tom Brake

The Minister seems to have moved on from Afghanistan and HIV/AIDS. Will he respond to the points on the prevalence of HIV/AIDS and on whether, given the security situation, it is impossible to get any more information on what the level of that prevalence might be?

Mr. Thomas

That links back to institution building and improving the capacity of organisations in Afghanistan. It is clear that the data in Afghanistan are not brilliant. We are giving support to the Afghan transitional authority to help it develop data systems to track not only HIV/AIDS prevalence, but a range of other issues. HIV/AIDS is a potential threat to the Afghan people. The prevalence is relatively small at the moment compared with other countries in the region, but we cannot be complacent about that at all.

The hon. Member for South-West Bedfordshire and my hon. Friend the Member for South Swindon raised the issue of trade. He again trotted out his party's commitment to the idea of an advocacy fund. I would gently point out that we have been providing support to developing countries to help them negotiate effectively in an international arena, such as the World Trade Organisation, since 1998. To give just one example, in Pakistan we have provided £1 million to the Ministry of Commerce to enable it to participate and to prepare for the WTO negotiations, to provide training for officials and non-governmental stakeholders, to provide assistance for research in key policy areas and for the developing dialogue between the public sector and business civil society in those areas.

Andrew Selous

Does the Minister not agree that at the previous WTO trade round talks at Cancun many countries from the developing world were not properly represented and could not afford the sort of legal and financial support that other hon. Members have talked about? The commitment that was mentioned is an additional one from my party to do something about those particular countries.

Mr. Thomas

We have provided significant funding to a range of countries that are participating in the WTO negotiations. I gave the example of Pakistan, but we have also provided assistance to a number of non-governmental organisations that are being used by developing countries for the same purposes—for research, to help prepare negotiating papers and so on. We must continue to keep in view what more we need to do to support those countries and help them prepare for other negotiations.

One of the most positive things that occurred in the Cancun talks was that the voice of developing countries was heard. Clearly, one would have wished for a successful conclusion to those negotiations and I regret that that did not occur. In the UK we are doing everything that we can to get those talks back on track. The voice of developing countries, organisations such as the G20 and the least developed country bloc came across clearly. There are definite signs of them getting organised and having strong and effective positions in those talks. I welcome that process.

Bangladesh, India, Pakistan, Sri Lanka and Nepal are all members of the WTO. As my hon. Friend the Member for South Swindon rightly pointed out, implementing many of the agreements that have already been included across the WTO, such as trade-related aspects of the intellectual property rights agreement, will be a significant challenge for those countries. Part of the assistance that we need to provide is to help their Governments have the capacity to implement international trade rules. For example, in India we are providing £5.5 million to help the United Nations Conference on Trade and Development, in tandem with the Ministry of Commerce and Industry, do exactly that. That is another example of the support that we are providing in those areas.

The hon. Member for Carshalton and Wallington asked me about conflict issues—

Andrew Selous

Before the Minister leaves the issue of trade, will he comment on the examples that I gave of India's setting up tariffs as far as Nepalese cooking oil and Sri Lankan tea are concerned? Does he agree that it would be a worrying precedent were it to spread within south Asia and other developing regions and were protectionism and tariffs to grow up between developing countries?

Mr. Thomas

The hon. Gentleman is absolutely right. In terms of tariffs and subsidies, not only are there significant north-south issues, to which a number of hon. Members have alluded, but there are significant south-south issues. The examples that he referred to are an illustration of that. Just as we must address the subsidies and tariffs of the European Union and of America, to give two well-known and well-considered examples, developing countries equally need to consider how they can reduce tariffs between each other, the better to generate trade across the areas.

The hon. Member for Carshalton and Wallington asked me about the issue of conflict. I hope he will be pleased to know that we are working to achieve a UN convention on small arms and light weapons, as one tool in the work to reduce the number of those weapons available and the scope for conflict that they provide. We are also providing funding through the global conflict prevention pool to a series of countries to help to reduce the prevalence of small arms and light weapons.

The hon. Gentleman also asked me specifically about Nepal and the gift of helicopters and short take-off and landing aircraft to that country. Helicopters were given last year. They are not being used for offensive purposes. Similarly, the STOLs will not have an offensive capability. A minute has been laid before Parliament on the STOLs and, as the hon. Gentleman knows, he has a variety of ways to explore the issue further if he wishes to do so.

On the issue of resources, I pay tribute to the work of my hon. Friend the Member for South Swindon, who chairs the all-party group on heavily indebted poor countries. We strongly support the continuing process of full implementation in respect of HIPC. As my hon. Friend is aware, we have also written off 100 per cent. of our bilateral debts to HIPC countries. On giving further debt relief to HIPC countries, we must recognise that there is a danger of just recycling moneys between countries. If we were to see the write-off of debts to institutions, such as the World Bank and other international financial organisations, it would prevent money from being available for other poor countries. We need to keep the issue under close review and if further funding becomes available, perhaps through the international finance facility, my hon. Friend's argument would have particular strength.

Ms Drown

Many of the HIPC countries will not achieve millennium development goals without further help. Lots of work is done to show that debt relief is more effective than aid. If we really want those countries to achieve the millennium development goals, which I know the Government want them to, it is clear, as the World Bank itself said, that more debt relief is needed. I hope that the Government will concentrate on that and deliver sufficient debt relief and aid to ensure that those countries can achieve the millennium development goals.

Mr. Thomas

We keep the issue of debt relief under close review in all the countries that we work in. My hon. Friend will be aware that on occasion we have pushed for further topping-up assistance, for example, to help to ensure that debt sustainability can be achieved for the poorest countries. We will continue to have a dialogue about these issues.

My hon. Friend was supported by several hon. Members, including my hon. Friend the Member for Cardiff, North and the hon. Member for Carshalton and Wallington, in raising the issue of progress towards the 0.7 per cent. target. What came across in the debate is the considerable passion of many Members for progress towards that target. The Government remain committed to achieving the 0.7 target and, in making progress from 0.26 per cent. to 0.4 per cent., we are showing evidence of our commitment. As my hon. Friend rightly says, a comprehensive spending review process is under way.

Finally, my hon. Friend the Member for South Swindon did a service to the House by gently highlighting the inconsistency in the spending commitments that have been made by Her Majesty's Official Opposition. It is extremely disappointing that they should have pledged to freeze development spending if they come to power, because that would mean a cut in real terms in our international aid. Given the scale of challenges with regard to poverty and HIV/AIDS in particular, that is a disturbing decision.

Andrew Selous

I respect the Minister as an honest and decent Minister, and I am therefore sure that he would not want to mislead the House or anyone else about my party's position. I stated our position earlier but, for the record, will restate it. We have said that, other than in health and education where we have a clear commitment to increase spending, in all areas we intend to keep spending broadly equal. However, we are looking to make savings in some areas which may be released to other areas. We have not identified any specific areas for cuts. The Minister has therefore misrepresented our position.

Mr. Thomas

The hon. Gentleman has made a distinction that did not need to be made. I said that his party's position amounts to a cut in real terms and that that is disappointing. In his intervention on my hon. Friend the Member for South Swindon, he referred to a position statement that he expects his party to make sometime in the autumn. I shall look at that statement with great interest.

This has been a good debate on the challenges facing south Asia and the need for more progress in achieving the millennium development goals. I welcome the interest of so many hon. Members in this important issue and look forward to continuing to work with them on it.

Question put and agreed to.

Adjourned accordingly at seven minutes past Five o'clock.