32.
asked the Minister for Overseas Development if he will specify the steps he is taking to encourage more private investment in developing countries; and, in view of the unpredictable nature of the amount of private investment, how he proposes to maintain the overall target figure of one per cent. for overseas aid.
In answer to a Question on 16th November, I said I had set up a working party to examine means of encouraging British private investment in developing countries. The Government has undertaken to do its best to reach the U.N.C.T.A.D. 1 per cent. target by 1975. A number of different elements count towards this target and I shall keep a close watch on each of them. The Government have already announced substantial increases in official aid flows over the next few years.—[Vol. 806; c. 310.]
Despite that, does not the right hon. Gentleman recognise that there is an alarming credibility gap between the promise, reiterated by the Prime Minister, to try to reach 1 per cent. by 1975 and the aid figures announced by the Chancellor, which would take us only to half of 1 per cent. by 1975?
There is no credibility gap. We have announced that we are looking into the possibility of stimulating private investment. The right hon. Gentleman is jumping ahead too far in assuming that this examination and consequent action will fail. I believe that it will be successful, and will make a contribution towards the 1 per cent. target.
Does my right hon. Friend agree that the best way of encouraging private investment in developing countries is to find some way of persuading developing countries that what possible private investors fear most is nationalisation without adequate compensation?
My hon. Friend has a very important point.