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India

Phil Sawford: To ask the Secretary of State for International Development what assistance her Department is giving to help reconstruction in the Gujarat region of India following the earthquake in January 2001. [53676]

Clare Short: DFID's priority was to ensure that those who survived the earthquake were cared for until normal services could be restored, for which we set aside £10 million. The Government of India developed plans for the rehabilitation and reconstruction, which are being largely funded by the World bank and the Asian Development bank. DFID is not directly financing reconstruction work.

Bangladesh

Mr. Bercow: To ask the Secretary of State for International Development what recent assessment she has made of the value for money achieved by the Financial Management Academy Project in Bangladesh. [49189]

Clare Short: The objective of this project is to improve the financial management capacity of the Government of Bangladesh by helping it to institutionalise effective training in financial management. The project commenced in May 1999.

In addition to close monitoring by the DFID office in Bangladesh, the project was independently evaluated in August 2001. The evaluation concluded that the project had made good progress in its first two years towards building FIMA into a national resource for financial management training.

West Bank and Gaza

Mr. Bercow: To ask the Secretary of State for International Development what recent assessment she has made of the value for money achieved by the Assistance to the Palestinian Negotiations Affairs Department Project in the west bank and Gaza. [49205]

Clare Short: The purpose of this project is to help build Negotiations Affairs Department capacity and ensure effective preparation for final status talks with Israel. It is a key component in supporting the middle east peace process. We are in regular contact with both the project managers and the Palestinian Authority to review and ensure its continued progress. This is being achieved through a flexible and responsive approach to the timing of specific inputs, taking account of the changing political situation. A number of international partners have commented positively on the dynamism and quality of the project staff.

Uganda

Mr. Bercow: To ask the Secretary of State for International Development what recent assessment she has made of the value for money achieved by the Integrated Lake Management Project in Uganda. [49180]

Clare Short: An independent project review of DFID's support to the Integrated Lake Management Project was undertaken in September 2001. The review reported that overall, the project outputs and purpose, in terms of an integrated Lake Management Plan and supporting

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institutional frameworks, are likely to be achieved on Lake George. Lake Kyoga is a more complex system. However, there are early, encouraging signs that the project purpose can also be achieved on this Lake. A further review will be conducted in September 2002.

Debt

Mrs. Spelman: To ask the Secretary of State for International Development (1) what discussions she has had with developing country Governments during the last six months regarding definitions of debt sustainability; [53658]

Clare Short: There is no single definition of debt sustainability, which can be applied to all developing countries. For the heavily indebted poor countries (HIPC), the international community has agreed two transparent thresholds: the net present value (NPV) of external debt should be below 150 per cent. of export earnings and 250 per cent. of Government revenues.

We regularly discuss these issues with developing countries. We have also funded two meetings this year at which representatives from the HIPC countries debated these issues and fed their views into the on-going evaluation of the HIPC initiative by the Operations Evaluation Department of the World bank.

Heavily Indebted Poor Countries

Mrs. Spelman: To ask the Secretary of State for International Development what proportion of the debts owed by heavily indebted poor countries constitutes debts owed to the IDA. [53625]

Clare Short: The share of the estimated costs attributed to the World bank group (including IDA) for the HIPC initiative is US$8.1 billion in 2001 net present value terms, out of the total costs of US$36.4 billion.

Mrs. Spelman: To ask the Secretary of State for International Development (1) what action her Department is taking to ensure that the costs of the structural adjustment programmes of the HIPC Initiative are not borne disproportionately by the poor; [53616]

Clare Short: The enhanced heavily indebted poor countries (HIPC) initiative, which was agreed in September 1999, provides deeper debt relief to poor countries committed to eradicating poverty. Up to $100 billion debt could be written off for the 42 HIPC countries, reducing their debts by more than two thirds. On average, the 26 countries that have already qualified for HIPC relief will spend three times more on the social sectors in 2002–05 than on debt service over the same period.

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An important feature of the HIPC initiative is the recognition of the link between debt relief and poverty reduction in order to ensure the poor benefit from debt relief. Governments are developing national poverty reduction strategies, involving civil society and international donors, specifying how resources, including savings from debt relief, will be spent. As part of the Poverty Reduction Strategy Paper (PRSP) approach, the World bank and IMF have committed to undertaking poverty and social impact analysis (PSIA) of major macroeconomic and structural reforms likely to have significant impact on the poor. The World bank and IMF are leading a programme of work on PSIA and are realigning their programmes with PRSPs in these countries. We are supporting this work by piloting PSIA studies in six countries. We are also working with partner countries on their PRSPs, through our bilateral programmes.

Mrs. Spelman: To ask the Secretary of State for International Development (1) what assessment she has made of the impact of falling commodity prices on debt sustainability; and whether she has changed her assessment of debt sustainability levels of heavily indebted poor countries accordingly; [53657]

Clare Short: We have been following closely the impact of falling commodity prices on developing countries since well before the events of 11 September. At the annual meetings of the World bank and IMF in Ottawa last November, we raised this concern and asked bank and fund staff to revisit the debt sustainability analyses of all commodity dependent low-income countries, including HIPCs. The IMF and World bank analysis, published last month, shows that, although the situation varies from country to country, the external debt indicators for most HIPC countries have deteriorated, and several HIPC countries now face unsustainable debt burdens. Following UK pressure, the World bank and IMF boards have agreed to provide additional relief to countries in this situation. This was reconfirmed at the spring meetings last month.

Mrs. Spelman: To ask the Secretary of State for International Development (1) what recent discussions she has had with World bank officials regarding the structural adjustment programmes of the HIPC initiative; [53617]

Clare Short: At last month's spring meetings of the IMF and World bank apart form my attendance at the Development Committee which is also attended by many World bank officials, I also met James Wolfensohn, president of the World bank, to discuss among other things progress on the enhanced heavily indebted poor countries (HIPC) initiative and the implementation of the Poverty Reduction Strategy Papers (PRSP) process. The international community remains committed to vigorous implementation and full financing of the initiative. It has been recognised that support is needed to integrate poverty and social impact analysis (PSIA) into national

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poverty reduction strategies. The bank and fund are leading a programme of work on PSIA and are aligning their programmes with PRSPs in the poorest countries. My Department is supporting this work by piloting PSIA studies in six countries.

I regularly meet Ministers from HIPC countries to discuss key issues affecting their development, including debt relief.

Budget Allocations

Dr. Tonge: To ask the Secretary of State for International Development if she will break down her Department's budget for 2000 and 2001 into the amount allocated for (a) the HIPC initiative, (b) bilateral aid and (c) multilateral aid. [53024]

Clare Short: Detailed figures for expenditure by calendar year are not readily available. Allocations for the 2000–01 and 2001–02 financial years were as follows:

£ million

2000–01(33)2001–02(34)
Total DFID development budget3,252.53,581.0
of which:
Bilateral assistance1,388.01,734.1
Multilateral assistance1,776.51,737.2
of which:
HIPC initiative28.024.5
Administration and other88.0109.7

(33) Outturn

(34) Estimated

Source:

DFID departmental report 2002


DFID's expenditure on the HIPC initiative as detailed in the table includes an element of technical co-operation as well as our direct contribution to the HIPC trust fund for the international costs of debt relief. Our share of EC payments to the HIPC trust fund over the past two years amounts to an additional £46.0 million—this expenditure also counts as part of DFID's multilateral assistance, but a breakdown by year is not yet available.

The majority of the Government's expenditure on HIPC is in relation to the cancellation of commercial debts, and is not my Department's responsibility, although it does count towards our oda/GNI figure.


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