Select Committee on International Development Appendices to the Minutes of Evidence


Memorandum submitted by the Religious Society of Friends in Britain

  We welcome the International Development White Paper "Eliminating World Poverty" and the work of DFID in pressing for multilateral debt relief; abolition of the tying of aid, and work on poverty reduction strategies. We remain concerned, however, that a number of the poorest countries (for example Bangladesh and Haiti) remain outside the HIPC process and that this initiative has largely failed to address the issues of private and multilateral debt. We wholeheartedly support the commitment of the Government to the UN target of dedicating 0.7 per cent of GNP to development assistance. While affirming the commitments to using development assistance more effectively and harnessing private finance we would wish to draw your attention to the following issues in particular.

1.  Financial Architecture and capital flows (Chapter four)

  We are encouraged that the UK Government took the lead in forming the Financial Stability Forum as a way of coming to grips with the power of international financial markets. The Financial Stability Forum currently has limited developing country participation. Current evidence, from Argentina and Turkey (FT 10-11-00 Bretton Woods Update December 2000) indicate that financial crises continue to cause social unrest and increase poverty. We are pleased that the UK Government supports flexible approaches to the pace of capital account liberalisation. We would urge:

    —  The UK Government works to include more developing country government participation in the Financial Stability Forum.

    —  The UK works with the IMF to promote advice to countries that capital controls should be implemented in order to protect the vulnerable smaller economies.

    —  The UK Government works with the private sector and the international institutions to provide orderly rules for debt resolution in the event of financial crises, and in particular to stop hedge funds and other financial institutions benefiting from developing country distress as shown in the Elliot associate case.

2.  Export credits and debt (Chapter five)

  We welcome the assurance given that UK export credits for HIPC countries will be given for productive purposes only and the extension of this initiative to poor countries who borrow on IDA terms (para 208). We would urge the extension of this to all developing countries and press for:

    —  Restrictive criteria limiting the provision of Export Credits to productive investments (and that productive investment excludes arms-related business).

    —  That UK Government plays a leading role in negotiating a multilateral agreement for the abolition of export credits for military purposes.

    —  The publication of ECGD cover for arms trade in annual reports on strategic exports in the interests of making government reporting more transparent and accessible to Parliament and public alike.

Religious Society of Friends in Britain

January 2001

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