asked Her Majesty’s Government what assessment they have made of the development of the Central American Integration System.

The noble Viscount said: I am extremely grateful for the opportunity to raise this subject. I am particularly glad that the proposal to hold short debates in this Chamber has now come to fruition. This is a rather specialised subject, which has been on the Order Paper for a year, but one has to be patient—now things will move forward. I am grateful to the Minister, the noble Lord, Lord Malloch-Brown, as he has just come hotfoot from a gruelling five-hour debate on Iraq and we now discuss a more specialised area, central America. It is quite clear that it is a specialised area because there are more diplomatic representatives attending the debate than there are speakers, which says something in itself.

I shall start with the history. In 1951, the Organization of Central American States under the acronym ODECA—Latin Americans like acronyms—came into existence comprising the five countries of central America: Guatemala, El Salvador, Honduras, Nicaragua and Costa Rica. In 1960, there was the creation of the Central American Common Market generally known at the time as CACOM. That was a time of considerable difficulty. I was living in El Salvador for two years working on a start-up operation for a multinational company. As it was a start-up operation, I had the opportunity to visit all the countries in central America, together with Panama and Mexico. It is interesting that all those countries are now grouped together under one Minister in the House of Commons, Meg Munn.

It was a difficult time. With the exception of Costa Rica, democracy was not well established. There were frequent military interventions, much centralised control and that sort of system of economic management was still in vogue, as against market forces. Gradually things changed and changed for the better, with the advent of democracy and peace in the region, which was very welcome.

In 1991, ODECA was changed into SICA, which started formally in 1993 with Panama as a full member. SICA—in Spanish, Sistema de la Integración Centroamericana—is an institutional framework for regional integration of the countries concerned. It was an extremely good idea. As small countries need to work together to have a voice, this was a good move forward. Now the total membership of SICA comprises some 40 million inhabitants, providing a much stronger voice than the individual countries. Belize, the smallest country in the region, joined in 2000 as a full member and the Dominican Republic joined later as an associate member. The presidency rotates every six months and the executive arm of the SICA organisation is in El Salvador.

One has to remember—this applies to the whole of Latin America—that all those countries are quite different culturally, temperamentally and, in the case of Guatemala and Belize, in particular, are ethnically diverse with large indigenous groups. The problems facing each country are, to a certain extent, different, but they have formed this organisation to work together for a common cause.

The European Union takes the area very seriously. In 2003-04, an EU dialogue started with central America. The EU now has an ambassador in Nicaragua and a chargé d’affaire in all other countries. Formal association negotiations, which are ongoing, concerned trade, technical co-operation, aid, and so on. That is a hugely ambitious project and worthy of our full support.

I have concentrated briefly on the political background, the history of the area and trade and economic issues. The noble Baronesses who will follow will tackle other aspects, such as cultural relations and aid. Today we have had a Written Statement on the subject of what DfID is doing in Latin America. That is very welcome and I know that they will comment on it in detail. As I have no right of reply, I am extremely grateful to them for participating in the debate.

However, earlier this year, the Foreign Secretary wrote an article, which I read, under the headline,

“Stand by for our diplomatic surge”.

I am doing so, with some expectation and a little hope. However, Latin America and central America, in particular, have suffered exactly the reverse. There have been drastic cuts in our diplomatic representation. Three embassies, those of Salvador, Honduras and Nicaragua, were closed and there have been other cuts in the size and influence of other embassies. As a result, we have lost influence, especially in such subjects as garnering votes in the UN, and other matters. Where do we go? That is the big problem. In my view, direct contact in what the Foreign Secretary said about our global reach should mean what it says.

For instance, as I found when I lived in Latin America, personal contact is what it is all about. We may have trade policies decided by the EU, but trade policies do not produce business and investment deals for Britain. From my perspective, we are looking strictly at the British angle. Our diplomatic representatives here are doing the same on a true bilateral basis. You need to have representation on the ground in order to do business. However much know-how you may have, what matters in Latin America is “know who”—direct personal contact with people on the ground. You can do that only through representation and embassies. I suggest that what has happened in many cases is that where our European continental competitors—in many cases, we are competing in business matters—have embassies, they do the business and we do not. They have a bigger coverage than we do.

In a previous debate, I suggested that we might reinstate mini-embassies, one-man bands reporting to larger embassies. That has been tried in the past extremely successfully. With the development of electronic communication, it should be possible to achieve that, especially as the security risks are much reduced from what they were, if not eliminated altogether.

I hope that that will happen but I have to say that I am not totally encouraged by what the noble Lord, Lord Malloch-Brown is likely to say. As I said at the beginning, I am extremely grateful to him for being here. Although it is not his portfolio, he has been very active. I fear that he will not necessarily agree with what I have said, but I live in hope that he will give us some encouragement that we will return to the area with full vigour in due course.

I start by paying tribute to the noble Viscount, Lord Montgomery of Alamein, for his unstinting interest in the region and the way he keeps these issues before Parliament, and indeed for all the work he does outside the Chamber in the form of networking, encouraging us to meet ambassadors, his membership of all-party groups and so on. Without the efforts of the noble Viscount and those of the noble Baroness, Lady Hooper, central America could have been overlooked on many occasions. A primary difficulty is that the region is often squeezed out of discussions between North and South America. However, as I have learnt over the past few years, it is a vital region in its own right, extremely interesting and certainly very dynamic.

I was particularly pleased with the announcement today by DfID, which encompasses all of Latin America, recognising the fact that if a country is described as being a middle-income state, that does not necessarily mean that it does not need aid. I am glad that Nicaragua has been highlighted, because of its particular circumstances, which the Minister may touch on, and the extension of aid, even though it will become a middle-income state this year.

While researching the issues for this debate, I looked at the GDP of each of the countries. As I went through the various websites, the estimates of the Foreign and Commonwealth Office appeared to vary enormously from those given on American websites. The Americans usually seem to regard the GDP of these nations as being around twice as much as we do. One example I can cite is that the FCO estimates the income per capita for Guatemala at $1,790 a year, whereas the Americans estimate it at $5,400. It may be that my research is wrong, but there seems to be a vast discrepancy for all of these countries. It would be interesting to find out whether the Americans and the FCO are calculating the figures differently. It is important to have accurate information. I do not question the figures of the FCO, and perhaps would be more ready to query those given on American websites.

In the time available, I want to reflect on my observations drawn in part during my own visits to two central American countries. In the past two years I have had the pleasure of visiting Costa Rica and Nicaragua for holidays, and I am shortly about to visit Belize and Guatemala for the same purpose. Last year I was also lucky enough to join the IPU delegation to Guatemala and El Salvador. I see that the noble Lord, Lord Rea, is in his place; he, too, was a member of the delegation. During the visit to El Salvador we had the pleasure of being able to look around the SICA secretariat and to be given a snapshot view of its work. It is a vital organisation, as it is able to achieve valuable economies of scale for its members. Indeed, there is a parallel between the way the European Union works for its member countries and how SICA works for central America.

I would be particularly interested in the Minister’s observations on the use of EU structural funds. Coming from the West Country, I am acutely aware of how useful they have been to the area. How does the Minister envisage SICA developing its own structural funding programme, which is something I know very little about?

I shall touch on my own experience as a tourist in those countries, as they are still incredibly undervalued by those of us from Europe as a tourist destination. I am pleased that, in parliamentary terms, the Latin American Travel Association will hold its annual reception, either next week or the week after.

The reception is next Tuesday evening. While I am on the subject, we had a conference in Canning House earlier on central American tourism, which was a great success. I should have mentioned that the noble Baroness, Lady Hooper, apologises for not being here; she is in Strasbourg at the Council of Europe.

I thank the noble Lord for getting the date absolutely right. Central America is a wonderful tourist destination. If I list just a few of the things I found interesting, it might be a bit of an indulgence on my part to remember what a great time I had, but it will also highlight what is of particular interest: the mix of culture and environment, wonderful Mayan remains and unparalleled birdwatching opportunities. The noble Lord, Lord Rea, has much greater expertise in that last area than I do, but one of the pleasures was that from our hotel room we could look out and see a huge variety of birds. One of the most memorable trips with my husband was to the estuary of the San José river near Jacó in Costa Rica, where, absolutely effortlessly, we saw more herons than I knew existed. Another highlight was horse riding through the Nicaraguan highlands.

We experienced Estelí, where the nearby national park had got a co-operative going so that you could go into the office and book your accommodation, your meals and, for example, your horse riding or a guided walking tour; you paid in one go and they organised everything for you. It was a model of how to use a national park, which had grown up from the way that the farmers had worked in a co-operative way in the past. It was the most interesting three days that it was possible to have. We saw a bit of the agriculture and some of the history. If my Spanish had been a lot better, I would have got much more out of it. One of the things I am doing at the moment is trying to learn more Spanish.

We particularly enjoyed the historic towns of León and Granada. There is an awful lot for tourists to do, and the development of tourism, especially high-quality ecotourism, is an exciting possibility.

The parliamentary delegation of the IPU was very short because we had just two or three days in each of the two countries, so it was very much a snapshot, with presentations on human rights and justice issues, education, healthcare and infrastructure. In the short time we were able to spend outside the conference rooms seeing what was happening, the devastating effects of weather—hurricanes and mudslides—destroying infrastructure as soon as it is built were quite apparent. But so was the resilience of the people; for example, the drive for education.

There was a great deal to be optimistic about, as well as a great deal that the EU and the UK could help with. I am glad that the Home Office has done some of the training of the police force out there. Some countries there feel that the questions of impunity and justice are a difficult challenge.

The final important issue that I want to touch on is biodiversity. During the climate change debate, we have recognised the matter of deforestation and the value of forests as carbon sinks. There are enormous problems. It was highlighted to us, for example, that the illegal logging in Guatemala and the logs being taken out from Mexico are very difficult to police. A UN biosphere crosses the borders between Mexico, Guatemala and Belize, so it is particularly interesting.

Many of the countries have national parks. There is some mileage in considering whether there should be a greater link between UK and central American national parks. It could be an exciting partnership.

My final question concerns the difficult issue of President Ortega’s recent outlawing of abortion in Nicaragua. It is likely to lead to abortion tourism, with women going over the borders to seek abortion elsewhere, or to drive abortion underground, which we know is dangerous. What representations has the Minister made on that issue?

I, too, thank the noble Viscount, Lord Montgomery of Alamein, for giving us the opportunity to debate this question and for his persistence and dedication in keeping this area on the agenda, a deed for which we should all be extremely grateful.

It is rare that any time is spent considering this region of the world; it is not often mentioned in the media; and the dismally few Members of your Lordships’ House participating today is a sad indication that this lack of interest extends to Parliament, too. Nevertheless, I hope that this rare opportunity will help to maintain a proper level of interest in the Government, and through them, in international institutions involved with the region.

The low international profile of these countries has had a stultifying effect on many initiatives. It is clear that, unlike other regional trading blocks, such as Mercosur and NAFTA, SICA has not yet got off the ground.

The noble Viscount, Lord Montgomery, said that he hoped that the Government would do everything that they can to help the development of the political, economic and social integration necessary for the achievement of the association agreement between Europe and central America. The association agreement, and the free trade area that is part and parcel of it, will, we hope, be a great help to those countries and their future development. The establishment of strong democratic institutions, a sound economy and social cohesion will benefit not only central America but Europe. The lack of them has contributed to the region becoming an important transit route for South American drugs, and has stultified the potential for international trade.

Of course, greater attention to this region does not have to be confined to economic and political help. It is encouraging to see that the Government are involved with the British Council’s Peacekeeping English Project that started in Guatemala in 2007. We hope that they keep up the levels of support necessary for the project to be extended throughout the region.

We were pleased to learn from the DfID statement today that the Government are increasing their financial support to Latin America by 15 per cent, which will be provided through NGOs. Will the Minister tell us which NGOs and in which countries?

However, I draw attention, as I have in previous debates, to the worrying inclination of this Government to reduce our diplomatic presence around the world. I am shocked that figures are no longer available for the diplomatic budget in the annual accounts. Reductions are noticeable particularly in regions such as central America: there is now no resident British diplomatic representation in El Salvador, Honduras and Nicaragua. How does the Minister expect initiatives such as the Peacekeeping English Project to succeed in countries without a diplomatic presence? How does he expect to build stronger links or a “hub”, as the Foreign Secretary now calls bridges, with citizens in those countries when neither a British embassy nor a British Council office is present? That is not to mention our loss of important influence on votes in the United Nations. Does the Minister really feel that our country’s interests are equally well promoted through European institutions? Where would he advise a British citizen in trouble in Nicaragua to turn?

The GDP figures mentioned by the noble Baroness, Lady Miller, are interesting. The one I found most fascinating was the disparity between Costa Rica and all the other countries in the area. It is so much higher mainly because it has concentrated on education and health and has spent nothing on defence, unlike the others.

These debates on international development and foreign affairs so often highlight the brilliant work being done to increase links between far-flung regions with this country and the great benefits that those connections bring to all concerned. I thank the Minister for being here today to answer this debate, after a gruelling time on Iraq earlier.

How will these relationships continue to grow when this Government, representing the fourth largest economy in the world, valuing their warrant of holding global influence, insist on pulling back the very institutions through which they are established in the first place?

I, too, congratulate the noble Viscount, Lord Montgomery, on introducing this debate. I thank him for his continued engagement and interest in central America. For those who are historically challenged, I suspect that many may wonder whether Alamein is a hacienda in central America, rather than a battlefield in north Africa.

First, a word about the formal subject of the debate, the Central American Integration System, SICA, which was established in 1993 and has been an important framework for the countries of that region to come together to discuss shared concerns and act as a single voice on important international issues. SICA member countries share many common aims and concerns. They have trading links, in many cases a rich shared culture and history, and common challenges, such as climate change, drugs and crime, inequality and governance problems, including human rights, to which I will return.

SICA institutions are still developing. Although some have their problems, it is an important platform for outsiders, such as ourselves and our European partners, to discuss the serious issues which concern us and the central American Governments. SICA is therefore an important and useful tool in our diplomatic work in the region. For example, Carlos Guerrero, president of the Central American Sustainable Development Commission and Environment Minister of El Salvador, will visit London in February. We will discuss our priorities for a post-Kyoto agreement on climate change with him and those messages will then be shared across the region.

Let me just say a word on the issue of post closures, which I somehow suspected would come up today, because we have two speakers who have very properly kept this issue firmly in front of the House.

Since the White Paper in December 2003, the FCO continues to review its overseas network to ensure we are deploying our limited resources in line with our priorities, so that we can respond to change as those priorities change and make sure that we are providing the best possible value for money. Sadly, that resulted in the closure of posts in San Salvador, Tegucigalpa and Managua from within the central American region. A decision to close a post is never taken lightly. The global character of our diplomatic network is an important asset for this country, and we want to maintain and enhance it. But priorities change, and we have to reflect that.

We do not have to be too long-faced about this. We still maintain five sovereign posts in the SICA countries: Guatemala, Costa Rica, Belize, Panama and the Dominican Republic. The countries that no longer have their own dedicated posts are covered from other countries and our staff make regular visits to them. Ministers and officials in London have regular contact with officials and politicians from central America and we have appointed honorary consuls—which is not quite the same as mini embassies; nevertheless, they help us to provide continued consular cover, enable us to discuss important issues and ensure that we protect British interests. Above all, they represent value for money.

Noble Lords have raised today’s Statement and the news that my right honourable friend the Secretary of State for International Development has announced an increase in development funding for Latin America and for central America. I am pleased to confirm that financial assistance to Latin America will increase by 15 per cent from £84 million in 2007-08 to £97 million in 2010-11. However, as part of the overall strategy of ensuring that the resources are used most efficiently, that increase in programme resources is accompanied by the closure of DfID offices in Nicaragua and Bolivia. As Nicaragua becomes a middle income country in 2008, funding will be switched from the Government to other channels such as NGOs.

We have determined that the best way to deliver development support as a whole is on a regional level with an emphasis on trying to do all that we can through partners such as the EU, the World Bank and international NGOs. As the increase has just been announced, I am in no position to say which NGOs will be involved. That will be a bidding process, a programme development and a competitive process going forward. I stress that this is not disengagement, but a way of providing the support most effectively. The World Bank and the EU are big users of the structural funds to which the noble Baroness, Lady Miller, referred in her experience of the West Country and development—we can call them programmatic rather than just project funds, and budget support funds as well. We are trying to give countries the chance to make their own spending decisions and not be micromanaged through the project funding approaches of the past.

On our position on the Nicaraguan Government and therapeutic abortion, the UK is concerned about human rights violations wherever they occur. Officials from the British embassy in Costa Rica work very closely with DfID as well as with human rights organisations in Nicaragua and other EU embassies, to address human rights concerns, including therapeutic abortion. The EU raised the issue with the head of the Nicaraguan Parliament in late 2006. The budget support group, which deals with the structural funds in Nicaragua, of which we are one of nine members, has repeatedly raised the issue as one that contravenes the fundamental principle of human rights.

I thank noble Lords for the interest that they have shown in this part of the world. I acknowledge the presence of our diplomatic colleagues from the countries of the region and assure everyone that the Government remain committed to a global foreign policy, which includes the central American region. It is important to us for investment, trade, human rights, development, climate change and many other issues that we have in common with the countries of that region. We maintain friendly and close links with all the countries on a bilateral basis as well as through the EU and SICA, the central American integration system that we discussed. We simply do not believe that the most efficient way of maintaining this relationship is an embassy in every capital.

I should like to ask the Minister a quick question. We welcome the increased money from DfID, but Foreign and Commonwealth Office representations are being reduced, and that illustrates exactly what we have said repeatedly. Is this another example showing that the Government are increasingly less interested in the Foreign and Commonwealth Office?

As noble Lords know, the Government have made a commitment to increase development assistance to meet their objective of achieving 0.7 per cent of GDP in aid, and that has been endorsed and supported in a statesmanlike way by the Opposition. Given that, DfID has received a generous settlement in the spending plans for the coming three years. I am relieved to say that the Foreign Office also did better in terms of its programmatic resources than has been the case in recent years, thus securing an increase in support for our key priorities. But both DfID and the Foreign Office, like all other government departments, have been given a ceiling for their so-called administrative expenditures, which is what they spend on personnel. In that sense, there is no difference between the two departments because this is a Whitehall-wide cost control measure that affects us all. I fear that it reflects more clearly the tight purse, or perhaps tight fist, of Whitehall rather than any loss of support for the Foreign Office itself. I hope very much that the Foreign Office under my right honourable friend the Foreign Secretary is enjoying a renaissance with its new strategy, Refresh, and its new priorities. The noble Baroness should not be too concerned.

Living within an envelope of tight resources means that we shall continue to have to make decisions about how we can most efficiently manage our relationships across small countries in ways that meet both their and our agendas without sustaining unreasonable administrative costs in the form of lots of London-based staff being sent away to take up what may be inefficiently small posts across the region.

Unfortunately, government departments in Whitehall do not always wholly agree with each other. In the past there were plenty of internecine strifes in Whitehall with the Department of Trade and so on. Would the Minister like to consider taking the DfID money and getting the Foreign Office to administer it? That would have a direct effect because we do have diplomatic representation in some of these countries, although not all of them. With that human contact, the diplomats would know exactly which departments the money should go to and for what. Instead of putting it through international organisations, let it be distributed through direct expenditure from Britain via the embassies on the ground in the countries concerned—and if we had five of them, it would be much better. I know that we cannot do that at the moment, but we shall continue to struggle for them. The noble Lord might like to consider that suggestion.

The noble Viscount is correct to say that many of us feel that we need to do a better job of, as it were, branding our development assistance so that people know about the extraordinary and growing generosity of Britain in the area of humanitarian and development assistance. The use of NGO partners will help in that to a certain extent, and when money goes through the World Bank or the EU, we should encourage our colleagues at DfID to ensure that the funds are better identified as British support. That is because a lot of money will be distributed through trust funds and other activities identified to aid particular sectors or regions. There are opportunities to pursue that.

More generally, however, I would say that reports of differences of view within Whitehall are always exaggerated—we agree on everything, of course. While the noble Viscount may not believe that, I suspect that he will certainly believe that attractive though it might be—no doubt he saw a gleam in my eye at the notion of hijacking DfID resources—it would be quite beyond my Whitehall political and banditry skills.

[The Sitting was suspended from 4.39 to 5.00 pm.]