§ Mr. Nicholls
To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the current level of private flows from the United Kingdom to developing countries.
§ Mr. Lennox-Boyd
Flows from the private sector of the United Kingdom to developing countries in 1990 and 1991 were as follows:
£ million 1989 1990 1991 Direct investment 2,377 2,661 3,000 Guaranteed export credits 2,236 85 -2 Other bilateral securities and claims -850 -1,010 -680 Total net private flows 3,763 1,736 2,318
Bank lending is the major element of "other bilateral securities and claims". Hitherto it was calculated as the annual change in outstanding loans to developing countries subject to adjustment for exchange rate changes. Strictly speaking, this is a measure of change in stock rather than a flow.
In previous years it was not possible to make an adjustment for the changes in the valuation of claims due to write-offs associated with sales of loans and swaps of loans for other securities. These include bonds issued in connection with debt service reduction agreements or equities which affect the volume of outstanding loans but do not reflect any repayments by debtor countries.
Until 1989 such adjustments were considered unnecessary as the amounts involved were relatively small. The Bank of England has undertaken inquiries during 1992 to estimate the extent of this, however, which has led to substantial revision of the figures that were published last year.
These figures should replace those published in "British Aid Statistics 1986–1990", which were —£1,058 million in 1989 and —£4,515 million in 1990.