Debate Nov 1st
Home Up Ideas Debate Nov 1st EDM 736

This web site is not being updated - use Jubilee Debt Campaign instead

Westminster Hall debate on Debt

November 1st 2001

Full Hansard text  http://www.publications.parliament.uk/pa/cm200102/cmhansrd/cm011101/hallindx/11101-x.htm

 

Summary / Highlights  prepared by Dave Pearce for JDC Web Group

(This document is not approved by Jubilee Debt Campaign)

Summary

Every speaker supported debt cancellation and the extension of the scope of the current HIPC (II) agreement – even the Treasury spokesperson!  No one spoke against the proposition.

A substantial proportion of the debate was mutual congratulations for the UK contribution and the contribution of the Jubilee campaign (and the NGO’s).

There were no proposals from the treasury for any new initiatives and there were few significant proposals made from the speakers for specific changes.

bulletIndependent ‘bankruptcy’ assessment (as Jubilee Plus)
bulletTobin Tax
bulletSustainability based on poverty reduction first

Although there were several relatively minor questions left to be answered in writing, there were very few searching questions asked of the Treasury.

 Jubilee Plus reports were widely cited in arguments for extending the debt cancellation.

 Principle speakers were

 The Financial Secretary to the Treasury (Mr. Paul Boateng)

Mr. David Lidington (Aylesbury)   (Conservative)

Ms Julia Drown (South Swindon)

Dr. Vincent Cable (Twickenham)  Replying for Liberals

Glenda Jackson (Hampstead and Highgate)

Tony Baldry (Banbury)

Mr. Andy Reed (Loughborough

Mr Mark Hoban (Fareham)

Ann McKechin (Glasgow, Maryhill)

Mr. Simon Thomas (Ceredigion

Mr. Tony Colman (Putney)

The Financial Secretary to the Treasury (Mr. Paul Boateng)

 

Highlights of each speaker

 

The Financial Secretary to the Treasury (Mr. Paul Boateng)

Debt relief & poverty reduction are at the heart of globalisation challenge.

Links to campaign against terrorism.

Poverty reduction successes link to grass roots organisations and NGOs.

Progress is accelerating; duty to spread the benefits of rising prosperity.

UK leadership for HIPC II & UK 100% on bilateral.

30,000 die every day; we must redouble our efforts.

900 million illiterate; average education £27/head compared UK £3625.

23 countries decision point $54Bn -$34Bn HIPC; $20BN traditional.

Conflict is a barrier; work towards resolving conflict (spending on conflict resolution increased 42%) special IMF terms at end of conflict.

Unilateral ban on export credits for unproductive expenditure.

Strategy must be poverty reduction (not just dropping money into a hole)

2015 poverty reduction targets.

‘We will be judged by progress on these not our words’.

$200M UK towards the $1,831 Aids fund.

In response to improved governance it would be a  ‘dereliction of responsibility’ not to lift debt burden.

 

Mr. David Lidington (Aylesbury): Conservative

 

Financial Statistics hide the 10% deaths in infancy; 113M without primary school.

Endorse the contribution of NGOs, look forward to a dialogue with NGOs

80% worlds poor are not in HIPCs.

More important is increased trade, free markets; endorse EU ‘everything but arms’.

Africa needs good governance.

Question -  impact of Sept 11th, on debt Pakistan and central Asia, have a  clear case for help?

Question - will government confirm reports on concessions for these countries?

Warning to ensure debt relief not used for conflict expenditure.

Request to be advised of the number of countries with UK funds in trust and value of the funds.

Expressed concern over slow progress of HIPC –only just over half countries.

Cited Jubilee Plus report on sustainability needs a response from Minister; cited countries and reasons for not reaching even WB sustainability criteria.

Jubilee Plus call for international bankruptcy procedure worth examining; not committing Conservatives yet.

 

Ms Julia Drown (South Swindon):

 

Need a sea change in the lives of people in HIPCs.

Government endorsed the UN 2015 targets; but Kofi Annan says it’s a pipe dream without debt cancellation.

Ref victims of Sept 11th; equal sympathy with families of poorest countries; it sends a message of value American lives more than poorest.

It shouldn’t take lost lives in America to give debt relief to Pakistan nor Nigeria just because it isn’t near Afghanistan.

Quote IMF ‘long term unsustainable’, most debt indicators worse for HIPCs.

The 11 HIPCs in conflict must be given help and countries outside HIPCs.

Nigeria removed from HIPC list, but every £1 aid, pays £100 in debt service.

Quoted 24M Jubilee petition.

Need to extend HIPC; need to persuade Japan it is in Japan’s interest.

 

Dr. Vincent Cable (Twickenham):

 

Apologise for absence of Liberal spokesman –on floor of the house.

25 years ago trying to tackle the same debt problem.

Concern focus on debt, needs wider trade and investment.

Annual debt service relief only $75M/a, much of it hypothetical, modest value (I believe these figures are not correct)

Sustainability been made worse (by sept 11).

IMF not flexible enough.

HIPC process too complex and long winded.

Assumption of end of conflict needs more flexibility.

Call for Nigeria to be given HIPC terms.

 

Pakistan needs care in view of military government; consideration for neighbours, India, Bangladesh.

Call for additional flows WB/IMF funds need replenishing.

Note 25 years ago, India would qualify, similarly China, so optimistic.

 

Glenda Jackson (Hampstead and Highgate):

 

Featured letter from supporter Mr. Keiran Proffer and read selected quotes from letter.

 

Poor people do not have the energy to fight.

Quoted experience with Oxfam in Ethiopia, aid getting to both sides.

‘Christian ‘ fundamentalist, educated, not in poverty, but still violent.

Have a moral duty to argue that there is not a simple solution.

Recommends the opposition talk to the people of poor countries.

We must not let our anxiety to help lead to imposing our ideas.

 

Tony Baldry (Banbury):

 

Referred to three reports of the select committee on International development.

Quoted half population of HIPCs below $1/day; 1 in 6 children who die; 50M not in school.

They need the $59M/day of debt service to fight poverty.

The HIPC definitions of sustainability reflect the dominance of G8 creditors, the inclination of those creditors to favour certain client countries and a reluctance to absorb losses that mirror mistakes of past initiatives.

Quoted WB statements that sustainability is too narrow.

Question, why has WB used higher economic performance than achieved in the past; and not take account of external factors.

Noted all 23 had experienced IMFs SAPs and now PRSPs without dramatic growth improvements.

WB based on 5.5% growth; Standards and Poors predict 2.5%.

Countries like Burkina Faso can’t wait to 2007 for sustainability.

Rawanda can’t wait until 2008.

Noted the use of debt to export rather than debt to revenue impact on Chad and Zambia.

There needs to be packages tailored to individual circumstances.

Quoted Jubilee Plus arguments on vulnerability and fragility of economies.

Brought in global economy and failure to relax trade barriers –WTO Doha.

 The alternative approach as proposed by Jubilee Plus, independent transparent process for debt sustainability.

This would be fair and is supported by Kofi Annan.

Wouldn’t this be better than a HIPC 3.

Hope the treasury will review HIPC to ensure it works.

 

Mr. Andy Reed (Loughborough):

 

Cross party support.

Problem with Jubilee 2000 was it had an end, unfortunately debt not gone away.

Debt relief not a panacea, still needs aid to reach 0.7%.

Frequently used the statistic, 3,000 children will die during the debate.

Not just Jubilee Plus and NGOs, but WB identify flaws in HIPC.

Don’t want HIPC3, wants informality of Paris Club.

The problem is Japan; so calls on Uk Government to act unilaterally.

Jubilee letters outnumbered foxhunting!

Look at the success of Uganda after HIPC.

Debt relief not enough; needs trade to achieve sustainability in long term.

We should use our influence on WB/IMF to address poverty.

Need to look bottom up; the evidence is that the programs are not making a jot of difference.

Need to consider new initiatives; not the WB/IMF financial perspectives, not even governments but people on the ground.

Noted WB refused to let a President present their PRSP!

A high point in his career was Chancellor announcing 100% cancellation.

But the issue is, whether in 12 months time there will still be 3,000 dieing in the same time.

 

Mr Mark Hoban (Fareham):

 

Tribute to Cafod and Jubilee.

Quoted – in spite of Jubilee, for every £1 aid, £13 come back indebt relief; every day in 1999 $128M transferred to rich in debt service; total debt stock of aid recipients is $2534Bn and debt service $300bn.

In Zambia life expectancy down to 33, last seen in Europe in medieval times.

Zambia paid $438M, 13 % GDP.  UN survey estimates that money would reduce infant mortality from 202/100 to just 8!

Advocated expanding trade to combat poverty; citing China and Asia as the evidence.

Hopes that Doha will proceed.

 

Mr. Simon Thomas

 

Intervention; note that although globalisation and increased trade have increased prosperity in some parts, Latin America and Sub-Saharan Africa saw their share decrease.  WTO & IMF must seek sustainable development.

 

Mr Hoban

 

WTO –Doha must consider developing countries and the environment

 

Ann McKechin (Glasgow, Maryhill):

 

Declared council member of WDM.

Little prospect of meeting the 2015 targets unless crack the debt problem.

HIPC written to criteria of creditors; ignored problems of development and poverty.

Northern aid donations still used for debt service.

DFID used aid funds to pay Sierra Leone debts.

African countries paid $1.4bn could have been used for health & education and AIDs prevention.

WB reports acknowledge that overestimated growth; will not reach sustainability criteria.

Noted that back in 1988 International Development Committee accepted sustainable debt only if it didn’t damage prospects for economic and human development.

Banks are not accepting their responsibility for risk.

The penalties fall on poor people.

Disgraceful that donor countries have pressurised countries to withdraw from HIPC, especially Japan on Ghana and Laos by offering tied aid.

US congress delays slowing process.

PRSPs are closely similar to SAPs.

A quarter of debt is estimated to be odious –i.e. unwisely made to dictators.

Doubts on Global health fund –it is inadequate.

Need to remember that only 1% of world trade is with poor countries.

Africa only gets 1% of foreign direct investment.

It is a matter of political will.

All creditors need to commit to 100% cancellation.

Need to reassess PRSPs; Need to end trade protectionism; need a dialogue between North and South. Then we can achieve the targets.

 

Mr. Simon Thomas (Ceredigion):

 

Suggest that issues discussed would have more impact on fighting terrorism than those discussed on the floor of the house!

Need to ensure that we do not provide debt relief to coalition countries that would undermine long-term aims.

The second reading of International development Bill will end tied aid.

Unfortunate that DAC countries a decreasing proportion of GDP to aid

Quoted Jubilee Plus –HIPC flogged to death;

Members want countries freed from debt not as HIPC seeks simply to manage their debts better.

Noted that Afghanistan needed aid in spite of conflict.

 

Noted, as a result of Sept 11, an extra 10M people will fall below poverty level of $1/day and 20,00 to 40,000 deaths as a consequence.

Sustainable development must be included in International aid.

Raised the issue of Tobin tax or called on Government to propose an alternative

 

Mr. Tony Colman (Putney):

 

We need a way to expand debt relief from the 20% within HIPC to the 80% that are not.

Envisaged progress from WTO Doha and the WB/IMF leading towards world summit on sustainable development Johannesburg in September 2002.

Call for democratic parliamentary agreements for any future loans.

Supporting international accounting standards.

Cited case of corruption in Burkina Faso.

Noted strong support for Jubilee Plus.

Disappointed that everything except arms is delayed for 7 years.

Call for the trade barriers to be brought down at Doha.

Hope chancellor will use imminent WB/IMF meeting to pursue independent arbitration and emergency standstill ideas.

Advocate special help for countries accepting refugees.

Advocated Tobin tax – using the Continuing Linked Settlement system coming on-stream in 2002

 

The Financial Secretary to the Treasury (Mr. Paul Boateng) Responding

 

‘We need to develop technically efficient and effective vehicles to deliver poverty reduction.

Will provide written responses to trenchant criticism of HIPC.

It will be necessary to look at the impact of Sept 11 on HIPC.

Acknowledged the sustainability problem, and will continue to work to exit HIPC with sustainable debt levels.

Noted £40M help to Pakistan and £13M for refugee host communities.

Pointed out that UK was not a major creditor of Pakistan and so had limited leverage.

Working with WB/IMF to assist Nigeria.

Continue to press reforms of WB/IMF and improved accountability and transparency.

Will respond in writing on Tobin tax.

 

END