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Third World Debt

Volume 114: debated on Monday 6 April 1987

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asked the Secretary of State for Foreign and Commonwealth Affairs whether he intends to take any new initiatives with regard to the debt problems of Third-world countries.

We are already considering new initiatives and the next opportunity to take these further will be later this week at the spring meetings of the IMF and the World Bank.

Will the Minister make the best possible use of that opportunity to stress the urgency of the situation, which is illustrated by what is happening in Brazil, and the need for international action? Will he also note the all-party overseas development group's report on international debt, which will be published shortly after Easter?

I regret Brazil's recent decision to suspend the payment of interest on commercial debt. It is a matter for the Brazilians to discuss directly with the banks, and I hope that negotiations will begin soon.

On the more general issue of debt, particularly the debt owed by Africa's poorest countries, Britain has played a leading role in discussions about exceptional measures to deal with that problem. We expect further discussions at meetings of the IMF and the International Bank for Reconstruction and Development this week, which the Chancellor of the Exchequer will attend. If there are further developments, no doubt he will inform the House. The details of any new measures will take some time to resolve.

If additional money is made available to the African countries to which my hon. Friend referred, will it be in addition to the current budget, or will it come out of that budget and, therefore, deprive development projects and other schemes of necessary money?

The details have not yet been resolved, but I assure my hon. Friend that new measures would not be at the expense of the existing aid programme.

The Minister will be aware that it is indeed debt, rather than drought, deprivation or disease, that is affecting the countries of sub-Saharan Africa. May we be sure that when the Chancellor of the Exchequer addresses these issues on Friday we shall not have a merely cosmetic response, but that the right hon. Gentleman will address the fact that we need to reschedule the debt of developing countries, to cap interest rate ceilings, especially for sub-Saharan African countries, and to fix their debt repayments as a given percentage of their export earnings? For sub-Saharan Africa we need, in particular, a write-down, if not a write-off, of a major share of that debt. May we have an assurance that the Chancellor of the Exchequer will address those issues rather than talk, talk and talk again about the problem?

As ever, the Chancellor's response will be profound rather than superficial.

Will my hon. Friend reread the Pentateuch with regard to years of jubilee and debt remission and see whether it has any application to our present problems with the Third world?

That point has already been made to me by the Catholic Fund for Overseas Development, though I am not sure that it would read the Pentateuch in exactly the same way as would my hon. Friend.