§ Mr. Tom ClarkeTo ask the Secretary of State for Foreign and Commonwealth Affairs what is his policy regarding aid funding for economically unsound projects.
§ Mr. BaldryIt is our policy to finance projects only after rigorous appraisal against economic, financial, technical, social and environmental criteria.
§ Mr. Tom ClarkeTo ask the Secretary of State for Foreign and Commonwealth Affairs what test of economic efficiency is applied to projects seeking financial assistance under the aid programme.
§ Mr. BaldryProjects should at least match the economic rate of return appropriate to the recipient country. Where no rate of return is calculated, cost-effectiveness is tested by comparing alternative ways of achieving project objectives. The methodology used in economic appraisal is set out in the ODA's publication"Appraisal of Projects in Developing Countries—a Guide for Economists", a copy of which is in the Library of the House.
§ Mr. Tom ClarkeTo ask the Secretary of State for Foreign and Commonwealth Affairs what requirement for economic efficiency in individual aid projects is included in the Overseas Development Administration's priority objective of promoting economic reform.
§ Mr. BaldryMost aid for internationally agreed economic reform programmes has been in the form of balance of payments support. Project aid in support of reform is largely in the form of technical assistance. That is not usually susceptible to appraisal for economic efficiency, but is carefully assessed for cost-effectiveness.