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Volume 494: debated on Wednesday 24 June 2009

1. What assessment he has made of the effect of the global economic downturn on Ukraine’s need for development aid from his Department. (281790)

On a personal note, Mr. Speaker, may I add my congratulations to those of others on your election as Speaker?

The World Bank expects Ukraine to experience a significant recession in 2009. To counter the impact of the recession, the International Monetary Fund has agreed a package with the Ukrainian Government worth $16.4 billion. Other international institutions are standing by if needed.

I thank my hon. Friend for his response. He will be aware that western Ukraine has often been referred to as the bread basket of the country, yet it appears to lack the basic storage and transport infrastructure needed to improve efficiency, eliminate poverty and even out some of the inequalities between itself and other regions. Given Ukraine’s ambition to join or draw closer to the EU, does my hon. Friend not agree that there remains a need for the UK to give assistance, principally through his Department?

I commend my right hon. Friend’s interest in Ukraine and I recognise her description of the regional needs of the part of the country to which she refers. She will recognise that there are significant costs involved in the infrastructure for which she has rightly made the case. I hope she will understand when I point her to the work of the World Bank and other international financial institutions on infrastructure in Ukraine and other countries. We will continue to watch the regional economic needs of Ukraine through our involvement with those institutions.

Given the strategic significance of Ukraine as a political buffer zone between the EU and Russia, does the Minister not think that it was perhaps an error of judgment to close the DFID programme in Ukraine last year? It would be an utter tragedy if Ukraine’s democracy should fail, so should we not at the very least be running significant capacity-building programmes to support it?

We are running capacity-building programmes on democracy and good governance through the Foreign and Commonwealth Office. Indeed, the European Commission is also running such programmes. As I indicated in answer to my right hon. Friend the Member for Stirling (Mrs. McGuire), we continue to make the case for further involvement from donors to Ukraine. Substantial donor programmes are available through international financial institutions, and we are closely involved in the decisions that they take. Given our need to focus on the poorest countries, I believe that that is the right way forward.

Last weekend the World Bank published its global economic outlook, the development finance report, which predicted that developing countries will lose $1 trillion as a result of the economic downturn. What is the Minister’s Department doing to identify the countries that will be most badly hit and to ensure that development aid is provided to enable them to deal with the downturn?

I know that my hon. Friend takes a particular interest in economic growth through his work on the Select Committee on International Development. He will know from the leadership of the Prime Minister and my right hon. Friend the Secretary of State that we led work at April’s G20 summit to secure additional resources for the IMF and the World Bank to focus on the needs of the poorest people in countries that have been most devastated by the impact of the global recession. We will look to ensure that that support, having been committed, is delivered to those international financial institutions.