Ethiopia and Mozambique (Aid) (Hansard, 18 April 2000)

§ Mr. Foulkes

Ethiopia's military expenditure has steadily increased since war broke out with Eritrea in May 1998. This has led to macro-economic strains and a breakdown in relations with the IFIs. In common with other donors, we are meeting existing commitments under our bilateral development programme, but not taking on any new activities, with the exception of food security. Humanitarian assistance is not affected.

We have not decided to reduce aid to Mozambique. This year's Departmental Report estimates spending on the country programme at £21.41 million in 1999–2000. This does not include £15 million provided to help Mozambique to reach Heavily Indebted Poor Countries completion point, or humanitarian aid in response to the floods, for which £20 million has been committed. We expect to increase our spending on the country programme in the current financial year.

Background

Ethiopia Britain's bilateral development programme is currently running at about £4 million-£5 million a year. We are supporting activities in food security; the roads sector; revenue-raising; preparation of the interim PRSP; and the police. Before the war with Eritrea, we had been ready to deepen our development partnership with the Government of Ethiopia because of their commitment to poverty eradication. Our aim was to provide direct budgetary support to the Government to implement their own plans in the social sectors. We intended to start this with a new contribution of £25 million to help the improvement and extension of primary education throughout the country. However, since May 1998 when the hostilities broke out and military expenditure increased we have, in common with other donors, not taken on any new activities, with the exception of work on food security. Our planning figures have been adjusted to reflect this: £6 million in each of 2000–01 and 2001–02. Actual expenditure will vary in line with Ethiopia's capacity to end the war and return to the reform agenda it has pursued so strongly in the past. Humanitarian assistance is not affected by this decision. It is provided in response to need and reflects the opportunity to reach those in need and to monitor interventions.