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Mr. Robathan: I am grateful to the hon. Ladywith whom I enjoyed a happy week in Sudanfor giving way. My intervention is not on Sudan, however, but on the CAP. It has to be reformed. I think that everyone in the Chamber who is concerned about international development agrees on the impact that it has on the agriculture of developing countries, in terms of export subsidy and so on. What evidence does the hon. Lady have that it will be reformed?
Dr. Tonge: The hon. Gentleman asks a very good question. I have no evidence, except that Minister after Ministerincluding the Prime Ministerin this Government and the last one have always said that it would be reformed. This is a matter of the utmost urgency. If the European Union is to expandmy party and I hope that it willwe must reform the CAP. Those two events go together, and we simply have to get on with it. The only evidence I have, however, is what people say. The hon. Gentleman suggests that that is all talk and no action, and I agree with him that that seems to be the case at the moment.
Foreign direct investment in developing countries increased from $24 billion in 1990 to $184 billion in 1999. It dropped, however, to $167 billion in 2000, and only 6 per cent. of that capital ended up in the poorest parts of the world. Most private capital goes to Latin America, eastern Europe and the former Soviet Union. It worries me that the Commonwealth Development Corporation was the only organisation that would go into areas where there were civil wars or undemocratic Governments. The CDC dealt with that kind of situation. No company wanting a 25 per cent. return on its activities will go into an unstable situation. I know that my hon. Friend the Member for North Norfolk (Norman Lamb) wants to expand on that, if he is lucky enough to catch your eye, Mr. Deputy Speaker. It is a matter that we are concerned about.
Multinationals sometimes invest in developing countries, although their investment does not always reduce the poverty there. Irresponsible investment and employment practices can contribute to poverty and economic insecurity. I should not have to remind the House of all the campaigns that have gone on over the years against multinationals because of their activities in developing countries. The problem is that they are still not subject to regulation on an international scale.
The OECD guidelines are good, worthy and beautiful, but there is nothing to make the multinationals adhere to them. I have recently been made aware of an organisation called the UK National Contact Point for the OECD Guidelines for Multinational Enterprises. It is an organisation to which people can complain if they think
We need those OECD guidelines to be legally binding, please. Then multinationals could not compete with one another for bad practice, but they would have to compete for good. I feel quite optimistic about that matter, as companies have taken on board a lot of the messages from the demonstrations and all the fuss that the NGOs have made about their activities and world trade.
Many multinationals are thinking about all that or are at least publishing glossy brochures that show the wonderful things that they are doing in the countries where they operate. That is a great leap forward. Companies such as Rio Tinto are much better and are taking that agenda on, but the guidelines must be legally binding. That is the only way to achieve corporate social responsibility in the long run.
The House has been very indulgent. I have touched on only a few issues, and there are many others that I could mention. The report tells us many things, but it does not provide a genuine feeling as to whether the millennium goals will be achieved. I guess that we could not hope for that. I still fear that HIV/AIDS and continuing civil wars will prevent the world from making great progress in the next 20 years, although I hope that I am wrong. I am particularly worried about the consequences of HIV.
Nevertheless, I congratulate the Department on the work that it does. Its civil servants must surely be the most dedicated and successful at Westminster. I am also pleased by the extraordinary number of Members in the Chamber. It is a credit to the Department, the Secretary of State and the Minister that so many are here. At first, I wondered whether Members were avoiding the local elections, but perhaps I am being too cruel. I congratulate Members very much on their attendance, as it shows how seriously the issue is being taken and how extremely important it is.
Mr. Tony Colman (Putney): I apologise to the House, as I am unable to be present for the winding-up speeches. I must attend a constituency event to which I had agreed before the debate was timetabled.
I, too, congratulate the Secretary of State on her departmental report. I shall concentrate on two core issues, which should be prominent in any discussion on international development. The first is partnership. As expressed in the New Partnership for Africa's Development initiative, partnership for development is invaluable. Following last week's meeting in Dakar, it continues to gain momentum and, as a home-grown African initiative, it deserves our full support.
Inherent in the idea of partnership is equal relations. It is time to move from the hierarchical relations based on who gives and who receives aid. We all understand that aid is essential, but it is a drop in the ocean in terms of real and sustained development across the world. Only through fair trade can countries create economic prosperity.
Interestingly, a debate on European Union, British and American relations is taking place in Westminster Hall. It is always difficult when two debates that may cover the same subject are going on at the same time. We in Europe
For that reason, it is imperative that developing countries make every effort to use their muscle at World Trade Organisation meetings and other trade-related conferences. For all the bad press that the WTO receives, it is still one of the few international organisations that is run on a one member, one vote system. As such, it is more democratic than the United Nations or the World Bank can ever claim to be.
Encouraging and facilitating the growth of less powerful voices in such arenas should be part of the Department's mandate, and discussions in which real partnership can be forged through negotiations must also be encouraged. I echo the points made by the hon. Member for Richmond Park about the need to enshrine in law the guidelines for multinationals. Also, I very much welcome the WTO negotiations on the so-called Singapore issues of investment and competition, which are due to start next year.
However, we must think more deeply about which industries can produce the sustainable development that so many countries require. Export orientation certainly provides a good route map, but it must be coupled with diversification. Mono-economies are vulnerable and, in many cases, unsustainable. It is imperative that the growth of industries such as mining is coupled with a corporate social responsibility agenda.
In Ghana, for example, to say that foreign exchange is like gold dust is a truismgold is indeed the Government's major source of foreign exchange and an absolute necessity. Yet many mining corporations in some countries have left environmental and social problems that will take decades to rectify. I welcome next month's mining, minerals and sustainable development conference in Canada, which offers an unprecedented opportunity to change the culture of the mining industry for the better.
On my recent visit to Ghana, I was impressed by the efforts of Ashanti Goldfields in the Wassa West area of western Ghana, in co-operation with the local community, to return land used for mining to sustainable agricultural use. I hope that NGOs such as the Third World Network take up the invitation to discuss with Ashanti Goldfields their concerns about mining operations in western Ghana. I believe that many are unfounded, and it is extremely important that local NGOs take up the opportunities offered by multinationals operating in their countriesespecially those, I have to say, in which the Ghanaian Government have a golden shareand get those matters dealt with.
Given that the resources of all the multilateral banks combined are dwarfed by those of the private sector, it is important that an investment-friendly environment is created to encourage businesses to invest in emerging economies. Interestingly, Unilever's best investment area in the world is Africa, where it achieves an overall rate of return of more than 35 per cent. on capital employed. However, economic and, indeed, political stability are
Trade in services is also important. Returning to Ghana, it is clear that urban water provision requires investment on a scale not possible solely through governmental channels. I hope that Christian Aid in this country listens to Ghanaian civil society in terms of some allegations that are being made. I am pleased to hear that my near neighbour, the hon. Member for Richmond Park, is visiting that country shortly. I note from the report that the Department has already helped South Africa and Guyana with arrangements similar to those proposed for Ghana.
Private sector involvement in providing essential services is necessary in many areas, but any trade in services must be fairly and transparently regulated to ensure that the best possible route to sustainable service provision is found. Partnership between Governments and the private sector is imperative to improving services for expanding populations in many developing countries.
The second major point that I want to emphasise is international responsibility. The route to sustainable development is trade rather than aid, but it is clear that many countries are not in a position successfully to integrate into the world economy. As the conclusions of the last NEPAD meeting show, many national leaders face impossible situations.
Ravaged by conflict, countries such as Sierra Leone and its less internationally popular neighbour, Liberia, cannot expect trade to solve their ills in the next few years. The people of Sierra Leone hope for free and fair elections as well as a responsible and honest leadership, but even if those elusive goals are achieved, what of the thousands of soldiers who spent their youth with a semi-automatic weapon as a companion? They must be demobilised and reintegrated. In Sierra Leone, the dedication of the United Kingdom Government provides hope for the future through funding of reintegration programmes, training of the national army and assistance to the innocent civilians who have lost everything to war.
However, across the border in Liberia the international community has had good grounds to be more cautious in providing assistance. The relative lack of outside support has allowed peace to become an even more illusive goal. Under Charles Taylor, Liberia has regressed into violence. Those who suffered at the hands of out-of-control rebels in the 1990 war forget nothing, and will not bow to a Taylor Government. The contrast between the relative success of post-conflict reconstruction in Liberia and Sierra Leone shows clearly how much international support can achieve. I ask the Secretary of State to consider support for the situation in Liberia.
It is important to outline again and again the idea of international responsibility, which should be borne in mind given the recent stunted progress at Sun City in South Africa in the InterCongolese Dialogue. Post- conflict countries require our support, through aid and technical assistance. Without such support, they have the capacity to destabilise entire regions.
Thus, the international community has a responsibility to help countries to pull themselves out of destructive and debilitating conflicts, and out of the poverty that can be both a cause and an effect of such destruction.
I had hoped that, in her opening speech, the Secretary of State would shed more light on what was discussed at World Bank-International Monetary Fund spring meetings. Perhaps the Minister will be able to elucidate those issues in his winding-up speech, which I regret I shall have to read in Hansard. Last week, the Chancellor expressed clearly the current high level of political will to combat poverty and instability. I welcome the open and frank discussions on the important issues of sustainable debt and expanding the HIPC initiative.
In a similar vein, the recent experience of Argentina has opened up a debate on the possibility of creating mechanisms for dealing with country bankruptcy. That is a most welcome move, and I hope that there will be further discussions leading to agreement on a way forward on this issue. I congratulate Anne Krueger, the IMF deputy managing director, for her work so far, and I look forward to concrete proposals being put to the next IMF meeting this autumn.
The G24 also proposed that the rich countries should allocate a proportion of their special drawing rights to a special development fund. There is now a high level of agreement that far greater funds are needed for development, and the use of special drawing rights may be a way forward. I hope that the Minister will be able to provide information on how the debate on that has moved. I understand that there was a 40 per cent. vote in favour of that proposal at the World Bank-IMF autumn meetings. How far have we moved to get consensus and agreement on the Chancellor of the Exchequer's Marshall aid plan for development?
The other point that the Chancellor made in that excellent pamphlet was that other revenue-raising mechanisms could be used at an international level to provide further funds for development. A tax on international currency speculation was one of the most promising proposals, and could raise the enormous sums needed. More and more economists are beginning to realise that such a tax is technically and administratively feasible if collected through settlement transactions. The new settlement transaction system is going live this month. I welcome the open-minded approach taken in the UK and in Europe on this issue, and hope to see further constructive discussion.
It is imperative that the hierarchical nature of international development relations in the past is replaced with 21st century partnerships. At the same time, the international community must recognise its responsibility to countries that are unable to engage with the global economy. For that reason, aid must be focused on the least-developed countries and the poorest groups.
I commend the Secretary of State and the Chancellor on their work. They realise that we still have a long way to go to achieve effective financing of our development goals, and they are leading the way by pushing for international responsibilities to be met in a spirit of international partnership.