HL Deb 04 March 1997 vol 578 cc128-9WA
The Earl of Northesk

asked Her Majesty's Government:

What progress has been made in implementing the agreement reached in Tokyo last year on the eleventh replenishment of the International Development Association (IDA)?

The Minister of State, Foreign and Commonwealth Office (Baroness Chalker of Wallasey)

Under the arrangements established at Tokyo, it was agreed that, in the first year of the new IDA triennium, the United States would aim to pay off their arrears to the tenth replenishment of IDA and the rest of the donor community would contribute to an interim trust fund for that year: procurement opportunities from this fund would be limited to contributors (and developing countries), thus excluding the United States. There would be a traditional burden sharing arrangement for the final two years of the replenishment, with no restrictions.

The interim trust fund has now been established and is operational: the selection and approval process is under way in respect of some 2.3 billion dollars worth of projects (out of total of some 3.3 billion dollars). Parliament has approved our own contribution to the trust fund and we have deposited the promissory note.

However, despite this progress, the United States Administration has sought a relaxation of the procurement restrictions in order to try to ensure that Congress will approve the funds to meet both the IDA-10 arrears and their pledge to IDA-11. Following a meeting of senior officials on 6–7 February in Paris, it has now been agreed to adjust the trust fund arrangements. In short, an amount of uncommitted trust fund money—limited to SDR700 million (around 1 billion dollars}—is to be held back pending the results of Congressional deliberations on the United States Administration's request for finance to cover both the IDA-10 arrears and the first tranche of the US contribution to IDA-11 proper. The result will not be known until the autumn at the earliest when the issue will be discussed further among IDA contributors.