Structural Adjustment Programmes (Hansard, 5 April 1989)

§ Mr. Andrew F. Bennett
To ask the Secretary of State for Foreign and Commonwealth Affairs whether the198W Malawian sectoral import programme for industrial product imports and the Sudanese sectoral import programme for the irrigated sub-sector were conditional on the acceptance of IBRD and IMF structural adjustment programmes.

§ Mr. Chris Patten
Approval of the European Community's Malawian sectoral import programme for industrial products was subject to the conditions negotiated by the Malawi Government and the World Bank for the World Bank's industry and trade policy adjustment credit. Approval of the Community's Sudanese sectoral import programme for the irrigated sub-sector was not explicitly conditional on the IBRD-IMF-backed structural adjustment programme which the Sudanese Government were then pursuing.

§ Mr. Andrew F. Bennett
To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the remarks, relating to IMF, IBRD arid EEC policies towards structural adjustment, made by Lorenzo Natali, EEC Commissioner for Development, to the ACP-EEC joint assembly in Madrid on 15 September 1988.

§ Mr. Chris Patten
We welcomed a number of the comments made by Senor Natali at the joint assembly, in particular his rejection of the view that the years of adjustment by ACP countries are wasted years for development. However, we continue to take the view that support for economic reform through the provision of programme aid and support for new investments are complementary and both indispensable. No useful purpose is served by establishing a rigid division between the two forms of aid.

§ Mr. Andrew F. Bennett
To ask the Secretary of State for Foreign and Commonwealth Affairs how many sectoral import programmes have been agreed and with which countries and how many of these agreements and with which countries have been conditional of those countries' acceptance and implementation of IMF or IBRD structural adjustment programmes.

§ Mr. Chris Patten
Under the third Lomé convention, the European Community has agreed 25 sectoral import programmes. The list of recipients is as follows: Angola, Cameroon, Ethiopia, the Gambia, Ghana, Kenya, Madagascar (2), Malawi (2), Mali, Mozambique (2), Niger, Sao Tomé and Principe, Senegal, Somalia, Sudan (2), Tanzania (2), Togo, Uganda (2) and Zambia. Seven of these programmes have been explicitly linked to the implementation of IMF-IBRD-backed structural adjustment programmes; the countries in question are Malawi, Mali, Mozambique, Sao Tome and Principe, Senegal, Tanzania and Uganda. Many of the other programmes have been in support of adjustment backed by the IMF and IBRD although there has been no explicit linkage.

§ Mr. Andrew F. Bennett
To ask the Secretary of State for Foreign and Commonwealth Affairs what is his Department's view as to what forms of structural adjustment should be included under the fourth ACP-EEC convention (Lomé IV).

§ Mr. Chris Patten
In line with the development council resolution of 31 May 1988 we believe that under the fourth 199W ACP-EEC convention fast disbursing aid should be provided to support programmes of both macro-economic and sectoral reform.

§ Mr. Andrew F. Bennett
To ask the Secretary of State for Foreign and Commonwealth Affairs what is his Department's view as to how central the issue of structural adjustment should be under the terms of the fourth African, Caribbean and Pacific-European Economic Community convention, Lomé IV.

§ Mr. Chris Patten
The extent and depth of the adjustment needed varies considerably among the ACP countries. It is accordingly important to ensure that the Community retains sufficient flexibility to enable it to provide the type of assistance best suited to each country's individual needs.

§ Mr. Andrew F. Bennett
To ask the Secretary of State for Foreign and Commonwealth Affairs if it is the view of his Department that all European development fund aid subventions should be made conditional on the adoption of structural adjustment policies.

§ Mr. Chris Patten
No. However we believe that the economic policies being pursued by recipients should be taken fully into account in considering the form of assistance to be provided. In particular, we believe that programme aid should be made available in order to support sustainable economic policies.

§ Mr. Andrew F. Bennett
To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the renegotiation of the fourth African, Caribbean and Pacific-European Economic Community convention, Lomé IV, with specific reference to the European Council resolution on structural adjustment policies, adopted on 31 May 1988.

§ Mr. Chris Patten
The Community has agreed that in the current renegotiation of the Lomé convention its approach towards support for structural adjustment measures will be on the basis of the principles set out in the development council resolution of 31 May 1988.

§ Mr. Andrew F. Bennett
To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make it his policy in negotiations for the fourth African, Caribbean and Pacific-European Economic Community convention, Lomé IV, to remain committed to a gradualist form of structural adjustment rather than a shock approach.

§ Mr. Chris Patten
Economic reform is a necessary pre-condition for the recovery of economic growth in many ACP countries. It is important that it should move ahead as quickly as possible. However we recognise the need to take account of the situation in individual countries.

§ Mr. Andrew F. Bennett
To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement as to his Department's attitude to the atachment of structural adjustment conditionalities to fast disbursing facilities, such as sectoral import programmes and general import programmes proposed under the negotiations for the fourth African, Caribbean and Pacific-European Community convention, Lomé IV.

§ Mr. Chris Patten
We believe that under the next Lomé convention there should be scope for providing the forms200W of aid best suited to the needs of individual ACP countries, including various forms of relatively fast disbursing programme aid. If such aid is to be effective, it needs to be provided in support of sustainable economic policies and in close co-ordination with other major donors.