Dáil Éireann - Volume 499 - 02 February, 1999

Bretton Woods Agreements (Amendment) Bill, 1998: Second Stage (Resumed).

The following motion was moved by the Minister for Finance, Deputy McCreevy, on Thursday, 28 January 1999:

That the Bill be now read a Second Time.

Debate resumed on amendment No. 1:

To delete all words after “That” and substitute the following:

“Dáil Éireann declines to give the Bill a second reading on the ground that, while urgent measures need to be taken to address debt relief, the Enhanced Structural Adjustment Facility (ESAF) cannot be supported on its present form and on the ground that the Bill's proposal to fund ESAF is a direct contradiction of Fianna Fáil's pre-election commitment to continue to withhold funds from ESAF pending reform of the International Monetary Fund.”

–(Deputy McDowell).

Mr. Roche: When the debate on the Bill was adjourned last week, I mentioned that I had read with great interest the Minister's speech. He was correct to suggest that the heavy external burden of debt has had a devastating impact on the economies of developing countries in recent years. We all too frequently speak of the debt impact on Third World economies as if they were some abstraction, whereas they comprise unfortunate people who starve because of the debt problem.

I am not happy with this Bill. I wish a different decision had been made by the Minister and I will outline my reasons for saying this. The lives of people in the Third World who have never heard of the international financial community, the financial order, the International Monetary Fund or the World Bank are affected on a daily basis by these institutions and by decisions taken by mandarins in Washington, London, New York or some other financial centre. Their lives are directly affected by decisions about which neither they nor their Governments has a say. In this par[901] ticular issue, the IMF, the World Bank and the international community have focused attention on the problem the debt causes for the international monetary order. That is the wrong focus, and I wish the Bill took a different focal point.

The Minister outlined the steps taken by the international community in this matter in recent years. He correctly pointed out that the 1996 initiative was the first debt relief scheme to seriously address the problems of Third World debt. I am concerned about the way it addresses the problem of Third World debt, which is from the focal point of the international banking community, the same discredited set of bankers who got them into debt in the first place. In the 1996 initiative, the World Bank and the IMF focus their concern not just on highly indebted poor countries but on those who have a track record in meeting debt. What will happen to the rest? Are they to be abandoned to their fate? The initiative focuses the international financial institutions on reducing the debt burden of the select group of countries which attempt to meet that debt. However, it does not take into account the social, cultural or demographic impacts of the steps taken to reduce debt. In some Third World countries, the effort to reduce debt means rudimentary public education and health schemes are cancelled.

Like other Members, I received correspondence from organisations, such as the St. Patrick's Missionary Society, which have a track record in the Third World. These organisations and the many Irish workers who have returned to Ireland from the Third World are deeply concerned at this initiative, and we should recognise their concern. Organisations such as the missionary society have a major interest in seeing the problems of the Third World debt assessed. Their focus is different from that of the international banking community in that it is from the perspective of the unfortunate people of the Third World. They understand better than any of us the burden of Third World debt. They witness the poverty, malnutrition, infant mortality, continuing decline of communities, destruction of the environment and the abandonment of cultures which arise in the name of international economic orthodoxy. Missionary societies and relief workers have unanimously cautioned against the IMF debt initiative. On reaching the central point of their submission, I find their concerns in the issue are also mine. The real motivation so far as the IMF and the World Bank are concerned is not human suffering, destruction of human economies, poverty or malnutrition but the international banking order. Starvation and deprivation are far down the list of priorities. Their concern is the international banking community and that should be the last of our concerns.

The institutions of international banking are as blameworthy in the matter of Third World debt as the rogue and tinpot governments that ran up the debt in the first place. Even a casual student of international economic development over the [902] past three decades could instance, without any difficulty, major capital intensive schemes that simply gobbled up billions of dollars. Many of these were tinpot schemes, put in place by tinpot governments and were funds for siphoning off the patrimony of the Third World. These projects swallowed money and in many instances produced no tangible results. The international bankers who put funds into these schemes knew from the outset the projects had little if any chance of success. The same international banking community was aware that the money which came in one door into a Third World country quickly exited through another door to be invested in numbered bank accounts in Switzerland or some other haven for hot money. The international banking community is guilty of near genocide in this matter in that gentlemen in suits in Zurich, London, Frankfurt and other major banking centres allowed themselves to become associated with regimes guilty of crimes against humanity. The international community should be much more willing to force the international banking community to face the real consequences of its actions – the concern of the IMF and the World Bank is to save the banking community – it should ensure the banking community learns a valuable lesson from the experience of the past few years.

A few years ago Deputy Higgins and I had the privilege of witnessing a democratic election in Nicaragua. That country still suffers the consequence of a despotic regime that feathered its own nest, supported by the United States, and literally impoverished generations of the people of the nation.

NGOs who have contacted me have asked why Ireland will not put the £7 million specifically earmarked for the fund into bilateral projects rather than into the fund itself. They point out that the IMF has not and never has been a development institution. I have some experience with the IMF. It is not a development institution. NGOs question whether the IMF has any real expertise or concern in this area. They are right to do so. These international institutions are good at looking after their own comforts and at spending large amounts of money on their own administration. We visited the International Bank for Reconstruction set up in London a few years ago where there was the scandal about the amount of money spent simply to furnish the lobby. We have proof of that. Their concerns are not always about the well being of the Third World. I share the fear expressed by NGOs that the IMF and the World Bank operate behind closed doors. There is little direct accountability for those institutions. This concern has been voiced by a number of NGOs here.

Moving away from my specific concerns regarding the suitability of the IMF to carry out this work and from the culpability of the banking community, the governments in the First World should put more emphasis on debt forgiveness and I include our Government in that comment. [903] The bankers who walk themselves and their institutions into difficulties will not die if they do not get their pound of flesh from the Third World, but if they get their pound of flesh people in the Third World will die. That is the reality.

The financiers who got into this mess should be forced to carry the main burden. It is not just, equitable or morally defensible to expect the citizens of the Third World to carry that burden. I welcome what this Government is trying to do and what previous Governments have done in the Third World. Ireland has a good, although not a great, track record in the Third World. Would it not be a good thing if Ireland decides not to go with the general flow? While our failure to sign up to the ESAF would not bring the IMF proposals to a halt, it would certainly give some other governments cause for thought. I have already suggested this money should be used for bilateral aid. I reject the argument put forward here that bilateral aid necessarily causes problems for domestic economies in the Third World. The opposite is the case. Properly channelled, correctly focused and properly delivered bilateral aid, fosters economic and social development in the Third World. How can one feasibly argue that bilateral aid projects aimed, for example, at supplying farmers with seed or families with clean water interferes with the economic order or development of recipient countries? That is a nonsensical suggestion, yet I heard it trotted out twice on the last occasion we discussed this Bill.

I have some difficulty accepting the intellectual argument which was put forward regarding the advisability of unconditional debt relief or debt cancellation. The mandarins in the IMF argue that unconditional debt cancellation is not the right tool to promote sustainable development and poverty reduction in the Third World. They can do that from the comfort of Foggy Bottom, 17th Street, Washington. What do they know about poverty in those cosseted quarters? I do not believe this argument is intellectually sustainable.

Let us put ourselves in the position of Ireland in the 1840s. If this country had a huge debt at that time and some external international body suggested the Irish people, who were then starving, should first clear the debt, how would we, at this remove, judge that application of economic orthodoxy? The Irish famine was due to misapplied economic orthodoxy. In this argument the same classic, economic, muddle-headed thinking that allowed millions of Irish people to starve is effectively being resurrected, polished off and put forward in a 1990s coat.

It is perhaps worth reminding the House, and perhaps even the Government, that many years ago the League of Nations was in session and the question of debt and debt cancellation arose. At that time the debate focused in part on the debt which was being imposed on the German people, the economic consequences of the peace. A few visionaries suggested that debt cancellation rather [904] than exotic formulae and alternative schemes were the appropriate way to proceed. John Maynard Keynes argued that the economic consequences of the peace ultimately was a further war in Europe. Another visionary who argued for debt cancellation was Eamon de Valera. He argued that at the end of the day the people who had to carry the consequences of the debt were not the people who were responsible for the issues which were being addressed by the debt. The world did not pay any attention to the views of that small handful of people at that time and we know the consequences.

To suggest, as the IMF is doing, that it is good for Third World countries to take their medicine, put their economic house in order and get economic regularity into their affairs has a positively academic ring to it. The problem is that the academic and economic orthodoxy on this occasion is being borne on people who already live at the margin.

I will not vote against the Government on this matter, but the issue itself and the manner we are going about it causes me grave concern. I was pleased when we put a moratorium on this matter a few years ago and I wish we were doing the same here. We in Ireland are in an unique position. We are a developed First World economy. We remind ourselves with sickening regularity that we exist in a Celtic tiger. It is a pity we do not have the intellectual self confidence to develop our own thinking on this issue. Ireland, as a developed economy, which was a colony, should identify far more readily than it does with the people of the Third World. We could and should be one of the leading nations to articulate the cause of the underdeveloped world. We could do that by not rowing in with every orthodoxy which flows from Washington or elsewhere.

No doubt these measures will go through with the Dáil's approval and ultimately with the approval of the Seanad. I ask the Minister, however, to give serious consideration on Committee Stage to building into the process some form of regular review in this House or at least in a committee of the two Houses. If that arrangement were acceptable to the Minister, it would mean that we could be at least forced to focus our attention from time to time in a busy schedule on this matter.

A Minister once suggested there were no votes in black babies. That cynical observation is probably true, but there is a moral imperative on us because of our experience and history to take the blinkers from our eyes and start thinking for ourselves on issues such as this. The IMF is not an appropriate body to deal with the development issue. The motivations of the IMF, the World Bank and the banking community are not pure or proper in this issue. I am cynical about their protestations of concern for the people of the Third World because in my brief experiences there I have seen no indication that the bankers care one whit for the people who live on the margin.

[905] I ask the Minister to give serious consideration, before this Bill is enacted, to at a minimum providing some way to review the procedures over the next few years. It is fine for us to feel it is macho to play a big role in the IMF. In reality, we are minnows in a large pool and it would be much better if the minnows occasionally gave a little leadership.

Mr. Deenihan: As Deputy Noonan, our spokesperson on Finance, pointed out, Fine Gael agrees in general with the initiatives in this Bill, the purpose of which is to make the payments authorised by the Government under the debt relief package announced by the Ministers for Finance and Foreign Affairs on 16 September 1998. The total package is £31.5 million over 12 years, £17 million of which is being paid up front in 1999.

However, following consideration and extensive briefing from people who are particularly well informed about Third World debt, the Debt and Development Coalition of Ireland, which has been in correspondence with all Deputies in this House, we have serious reservations about the Government's decision to fund the enhanced structural adjustment facility. Because of the Government's decision to fund the ESAF, we cannot support this Bill in its entirety.

Debt is a key burden in developing countries. That is directly related to the lack of social programmes in many countries. Important education, health and infrastructural development programmes cannot be pursued because of the compulsion to pay back large amounts of debt. In Tanzania, for example, 40 per cent of the population die before their 35th birthday and it spends six times more on debt repayments than on health. In Zambia, servicing external debt accounts for five times the expenditure on education. In Ethiopia, more than 100,000 children die annually from easily preventable diseases, yet debt repayments are four times the amount spent on health.

When the debt burden is so onerous, agencies such as the IMF must be careful when taking measures to reconstruct the economies and budgetary accounts of such countries that the medicine is not too strong for the patient, that in trying to correct the problems in the economy they do make the poor poorer so that more children die, more children drop out of education, life expectancy is reduced, etc. Those of us who have visited Third World countries know most of these countries are not in a position to fund the provision of clean water – let alone proper mains – and sewerage facilities to basic standards which existed in Ireland two centuries ago.

As a number of Members, including Members on the Government side, pointed out already, the ESAF programmes have many faults. In general, the aid agencies have three main concerns about the ESAF programmes which are shared by most Members. The proposed contribution to the IMF's ESAF programme is our main concern and it is also the main concern of the aid agencies. [906] The Bill allows the Minister for Finance to make further payments to the IMF and the World Bank beyond those detailed in the Bill, without Oireachtas agreement. I ask the Minister to clarify that matter which was raised by the aid agencies. There is no provision for accountability by the Minister to the Oireachtas on policies pursued by Ireland in the IMF and World Bank.

In 1996, the Government decided not to contribute to the IMF's ESAF programme following representations from people around Ireland, especially the aid agencies. At that time the aid agencies raised concerns which still prevail today. Fianna Fáil, which was strongly against the proposal at that time, also raised these concerns. The IMF programmes undermine democracy. They are designed in the IMF's offices in Washington. IMF officials deal mainly with Ministers for Finance and governors of central banks. Elected parliamentarians and parliaments are bypassed.

A further concern is that IMF monetary policies do not take into account human development needs. They result in a decrease in primary school attendance, increased malnutrition, the collapse of local industry and widespread unemployment. Across Africa, for example, there is no semblance of whole infrastructures which existed 50 years ago. As Members will be aware, society is collapsing in several parts of Africa. Much of this has to do with the way in which those countries have been manipulated, not only by outside investors and imperial forces, but by IMF policies. We should be wary of that. Another concern is that IMF conditions are so inappropriate and onerous that three-quarters of its programmes break down.

That is why we are questioning the Government's proposal to contribute to the ESAF while cutting back on funding to Irish Aid. The IMF is not a developmental institution. This money could be used more effectively and in a more accountable fashion in Irish Aid. In the past Ireland has had a good record as regards aid, although we have probably not provided as much as we should because of economic problems here. According to my contacts with people who benefited in various ways from these programmes, many Irish aid agency programmes have been effective. We have certainly saved lives. Even the farming organisations' simple scheme to provide a cow to communities in parts of Africa has been effective in its own small way.

As a nation, Ireland is inclined at times to be insular. In the past through our missionary zeal we looked towards Europe and beyond. However, we have now become more selfish. Overseas aid is not at the top of the list of priorities. We should adopt a more proactive approach and be more sympathetic to Third World countries. We know from experience that we can make a difference.

The Bill authorises the Minister for Finance to make further payments to the IMF and World Bank other than those provided for. It is the view of the aid agencies that no contributions should [907] be made without the agreement of the Oireachtas. I agree. To ensure accountability Ministers should be required to place regulations before the Dáil for its approval. The current practice is to place them in the Oireachtas Library. The same should apply in this instance. Any contributions should be brought to the attention of the Oireachtas. The IMF and World Bank operate behind closed doors. There is no accountability to member states. To ensure value for money the Minister for Finance should be required to present an annual report on actions taken.

Why should Ireland contribute to ESAF? Two years ago the then Government decided not to contribute in response to representations received. There was widespread opposition. Fianna Fáil condemned the proposal. It has now done a U-turn. What has changed in the meantime?

The opposition of the Debt and Development Coalition is based on the negative social impact of ESAF programmes. The IMF aims to reduce deficits, not poverty. Human need is not a priority. ESAF programmes undermine democracy and are designed in Washington without reference to member states. They have failed to tackle the debt crisis. The debt burden doubled between 1985 and l995. This counters the argument put forward by the Government.

The role of the IMF in the HIPC – highly indebted poor country – initiative is unhelpful. Eligibility is linked to a six year track record in an ESAF programme. Given the high breakdown rate, the IMF is hindering debt relief, the provision of which in Tanzania and Nicaragua is being delayed because of problems with ESAF. The IMF is refusing to provide the necessary resources to meet its contributions. It has called for donations to cover the cost, even though it has provided billions to bail out private investors in New York, London and Berlin who lent irresponsibly in Thailand, Korea, Indonesia and Russia. It has access to large amounts of capital funding. Some of the £86 billion should be used to fund the work involved. Despite efforts at political level to report progress and present the HIPC in a positive light, it was stated in the Financial Times in November that the initiative was running out of steam.

We have an obligation to Third World countries. We all know of someone – a relative, neighbour or friend – working in the Third World as a volunteer, missionary or preacher. It is important that we support their efforts by providing as much as possible. We can afford to do so. We should target health and education in particular. The high rates of illiteracy are alarming and give no grounds for hope. The low health status of African countries, in particular, is also of concern.

[908] Caoimhghín Ó Caoláin: I wish to share time with Deputy Callely.

An Ceann Comhairle: Is that agreed? Agreed.

Caoimhghín Ó Caoláin: I oppose the Bill as it takes the State in a new and negative direction in dealing with the issue of debt, development and aid to the majority of impoverished countries in the world. I listened with interest to some of the contributions, including that of Deputy Roche who offered sound reasons for rejecting the Bill, but will still vote for it. As he prescribed, the minnows should give leadership. Progressive Irish opinion and tragic international need demand it. The minnows should vote against the Bill.

The Bill takes us a further step away from independence in foreign policy. It should be rejected because it provides for contributions from this State to ESAF, the Enhance Structural Adjustment Facility. There is little knowledge and even less debate about the role of the IMF and ESAF. I commend the Debt and Development Coalition for highlighting the debt crisis and the role of the World Bank, the IMF and ESAF in compounding it, thereby causing untold misery to millions throughout the world. The Debt and Development Coalition is comprised of organisations and individuals who have worked for justice and development throughout the world. They are better placed than anyone else here to assess the real human impact of policies devised in boardrooms and parliaments far away from the impoverished communities who bear the brunt of the debt crisis.

As the Debt and Development Coalition has pointed out, the aim of the IMF and the ESAF is not to reduce poverty but to reduce budget deficits. Human needs and the social impact of IMF policies are secondary considerations where they are considered at all. Conditions laid down by the IMF for borrowing countries are so onerous that over three quarters of programmes break down. The ESAF works to a monetarist agenda dealing with Ministers for Finance and governors of central banks in indebted countries. There is no democratic accountability. In spite of the aspirations in the Minister, Deputy McCreevy's speech, the ESAF remains unreformed. Yet he wishes to associate us with this programme which is compounding the problems of indebted countries.

Instead of tying us to the ESAF the Government should be taking a political initiative and joining those countries that are calling for the cancellation of all outstanding debts owed by developing countries. This call was made by my colleague and the party president of Sinn Féin, Gerry Adams, when he visited Mexico last year. He noted then that the debt issue only became a crisis for the wealthier northern hemisphere Governments when Mexico declared it could no longer meet its repayments in 1982. The fact that for many years a blanket of poverty had descended on Latin America because of debt [909] concerned northern hemisphere bankers less than the prospect of a global financial crisis caused by developing countries defaulting on their loans to the IMF and the World Bank.

At present the majority of developing countries are locked in a vicious cycle of debt which denies them the opportunity to improve the quality of life of those in greatest need. The voice of Ireland should be on their side, joining with them in the demand for cancellation of the debt and a hopeful beginning for the new millennium.

In appealing to the Minister for Finance to reconsider this ill-conceived legislation I urge him to heed the words of UNICEF, the United Nations Children's Fund: “Hundreds of thousands of the developing world's children have given their lives to pay their countries' debts and many millions more are still paying the interest with their malnourished minds and bodies.” I appeal, however late, for a reconsideration of the Bill and I urge the minnows of this House to join with me and others in opposing it if that is the only course left open to us.

Mr. Callely: I welcome the opportunity to speak on the Bretton Woods Agreements (Amendment) Bill, 1998, the primary purpose of which is to give the Minister the necessary authorisation to assist in debt relief packages. I welcome the Minister's assertion that, given Ireland's strong financial standing, we must see ourselves as having a contribution to make in helping other countries to achieve their own development. Indeed, Ireland has always had a strong record, not just in terms of donations but always in the quest for justice. In this respect, great credit is due to the Department of Foreign Affairs and the many NGOs who have contributed to this. As a small nation in the early stages of development Ireland is in a unique position not only to understand the notion of empowerment and the importance of the old marine proverb that to give a man a fish is to feed him for a day but to give him a fishing rod may be to feed him for life. As a people to whom land is very important, we also understand, perhaps better than many, the importance of aid reaching the grassroots of society. There is a danger of environmental damage and human misery if economics alone dictate our actions.

There is no doubt that debt is a crushing burden on many nations in the developing world but it would be a mistake to see it as the only problem. There is a strong danger in equating economic growth with development. The IMF and World Bank programmes give rise to such concerns. These should not be underestimated and must be considered when discussing these issues. There is little point in reforming public expenditure if it is simply to increase the burden on the private sector and contribute to an unfair burden on the family.

If structural programmes are to work, important issues such as access and evaluation of the differential impact of the proposed measures [910] on different sectors of the economy must be studied. The question of control and decision must be paramount. Are those most affected by poverty, which we are attempting to alleviate, being included in the consultative process? There is little point in making decisions at official level which may not be sustainable at local level because of cultural, environmental or other such problems. Important also is the monitoring of programmes. Having contributed to the programme, what are the criteria for judging its success or otherwise and what means does the Oireachtas have for influencing the contribution or otherwise of such programmes? Given the requirement of efficient budgetary measures and constraints, the question remains whether Ireland's contribution of £31.5 million should be made via the IMF and the World Bank.

There are a number of principal concerns. How successful are these programmes and by what criteria have they been judged successful? In many of the typical stabilisation and structural adjustment programmes, IMF packages have been shown to have better impact on the strengthening of financial and capital markets than on strengthening the capacity for public investment or improving supports for agriculture or industry. Without these types of improvements countries have little chance of development. The necessary infrastructure is vital to sustain real development. If economic growth is present it undoubtedly offers the possibility of repayments but only if that growth is in terms of Government income and not income to multi-nationals or to private bank accounts. Increased economic growth is desirable only if there is equality of access and if it is not based on exploitation or linked to environmental damage. What is the capacity of IMF and World Bank programmes to monitor these aspects?

In terms of empowerment are the people involved with the result of debt being adequately consulted in its resolution, as Deputy Ó Caoláin asked? In Ireland we have seen important results from community development. We understand the necessity to involve groups at local level in everything from policing to economic renewal. Is there not clearly a greater need for representation at the IMF and the World Bank for members of developing countries on their executive boards? Is it not appropriate that decisions about programmes be made by them, with IMF itself becoming a lender of last resort? It may indeed suit borrowers to be in such a position.

However, the fundamental remains. Many countries borrowed more than they could invest in hard currency earning enterprises. Since Mexico and Brazil first indicated in 1982 that their debt burden had become unsustainable there have been fears of instability of large private US banks and of countries themselves. What is less clear is how the management of this problem can be addressed. Debt repayment through structural adjustment programmes will do little to help if small niches cannot be found and if trade cannot [911] be developed. There is sufficient evidence to show that trade is vital. The European Union has an obligation to assist in the development of that trade. Where structural adjustment programmes can lead to further instability, particularly where there is rapid industrialisation or over-reliance on multinationals, we must question their long-term viability.

There is an argument that IMF conditionality is based on the notion that it is not a development agency but a lending institution with a principal interest of economic stabilisation. As we approach the third millennium the vast amounts of capital provided by the IMF suggest that the policy reforms attached to IMF loans have a direct bearing on development. It is for this reason we, as contributors, must satisfy ourselves that these conditions are the result of participatory planning and the best type of development for the societies at which they are aimed. To this end, we must question the indications of development policies being used by the IMF and the World Bank.

The question must be asked whether social and cultural needs are taken into consideration in the administration of programmes in debtor countries. Difficulties caused by armed conflict in Mozambique or by famine in the Sudan require vastly different approaches. Repayment of debt represents only one aspect of the requirement of development strategies undertaken by the IMF. Can those strategies address the social, political and cultural differences in all these countries? Given the varying political climates, it is equally reasonable to question whether we have satisfied ourselves that the benefits of development programmes will reach those in need and not simply those with whom we have negotiated. That is a fundamental point.

Which are the countries judged by the IMF and the World Bank to be most in need of debt relief? Is it not true that debt relief is largely a Latin American aid? To what extent will it contribute to the development of Africa? Many of the world's most heavily indebted countries are in South America and Latin America. Neither the strength and use of the dollar as a reserve currency nor the current political climate have helped development. Has the Government satisfied itself that the Governments being helped by the IMF and the World Bank share the ideas of democracy and justice held by our people and that Ireland's contribution to economic packages will go only to those countries that share those ideas? I am sure the Minister for Finance, Deputy McCreevy, and the Minister of State, Deputy Cullen, know that reflects the true feelings of our people. We must ensure Governments that benefit from IMF and World Bank programmes share our ideas of democracy and justice and it is on that basis alone that Ireland should contribute to economic packages for those countries.

If development is to be encouraged, stability is a vital factor in any economy. The Irish situation [912] is a class example of this. The media have carried many versions of the debt crisis and have dealt with its causes and who is to blame for it. There can be no doubt that the developed world must carry its share of the blame. Does the cause of the debt crisis not include socio-economic factors, given national accounting, gender and racial issues? Has account been taken of the shortcomings of GNP as a measure of economic growth? Has the free market approach in issues, such as African rural development, been successfully evaluated? In the Berg report the World Bank rejected large-scale capital intensive Government projects. Is that adequately taken on board in structural adjustment programmes and are important issues, such as the development of small holdings, promoted?

There appears to be genuine concerns that free market reforms insisted on by the IMF do not generally produce the results intended and that social and economic changes have been adverse to the increased productivity of smallholder farmers. In many cases the IMF has not promoted the necessary increase of national investment in agriculture and rural development. Have we satisfied ourselves that future programmes promote the development which the people of the developing world want?

Is there not a danger that in promoting increased efficiency and productivity through revised expenditure, as in the IMF policies, important issues such as health and education may suffer? There was evidence of this earlier in the debt crisis when countries that received large adjustment loans between 1983 and 1990 experienced a decreased primary education enrolment rate. Ireland has ample evidence to suggest that the role of health and education in important in securing economic growth. Ireland particularly acknowledges the importance of the role of education. Many women are employed in those sectors in these economies where few other opportunities exist in the paid labour force.

It does not make economic sense that a large flow of resources from the developing world to the industrial world can be seen as a means of stimulating economic growth. It was always understood that these debts should be reserviced only at the point of development when countries were in a position to export capital. The reality is that only Government and monetary authorities have the resources to reconcile the debtor nations with bankers, but debt servicing is only one small issue in development and other questions, such as the cost of imported food and other household needs, energy supplies, etc., badly need to be addressed. While the average debt service ratio continues to rise and to exceed total foreign exchange earnings, development in these countries is unlikely.

Achieving the means to development is the challenge facing many countries in the next century. Despite Loire agreements, Africa went from being a net exporter of food in the 1960s to a net importer of food in the 1980s. We must accept [913] that CAP and other international agreements have not helped development, but equally solutions must be locally based and not imposed from a centralised bureaucracy.

Is a contribution to debt servicing Ireland's best route to assist development and not merely economics in its final goal? I particularly welcome the Minister's linking of debt relief to economic and social reforms and would be keen to ensure the criteria for identifying and monitoring such reforms would be part of a participatory process involving first and foremost those involved directly in the development process and also the donor nations in receipt of contributions at local level. Like some other Members, I received communications, and concerns were expressed to me about this matter.

As this Bill progresses through the House we will have an opportunity on Committee and Report Stages to put forward relevant answers to the questions I and some of my colleagues have raised. I wish the Minister well in processing the necessary mechanisms and structures required to ensure the necessary debt relief package will come to fruition, but it is important to ensure it will be productive and effective.

Mr. Creed: I am pleased to contribute to the debate on this Bill. It is heartening to hear views and reservations expressed by Members on all sides of the House about the contents of the Bill. Despite those freely expressed views, it is regrettable that it is unlikely the Bill will be rejected on Second Stage. There are fundamental flaws in the Bill about which I am deeply unhappy and for that reason I will oppose it on Second Stage.

This debate is in some way a continuation of last week's Private Members' debate on the Partnership for Peace initiative. I welcome the Government's change in direction in that regard. This debate is about finding Ireland's role in international affairs as we face into the next century. We must have informed decision-making in these areas. Taking into account the broken security infrastructures and the new ones that have emerged, the decision that was taken last week is important.

The Government presentation of this Bill in the past week and this debate is evidence of us being shackled by international pressures to conform, when what is needed, in terms of the debt and development issue, is some new thinking. Taking an overview on this issue, one would have to conclude that we have failed to bridge the gap between the developed and the underdeveloped worlds.

The attempt in this Bill to dress up the World Bank and the International Monetary Fund as international, friendly credit unions, as opposed to the international loan sharks they really are, is unfortunate. It is regrettable that the Government, given the lack of meaningful reform of these institutions, has changed the policy decision taken by the previous Government to put this measure in abeyance until the satisfactory oper[914] ational implementation of a comprehensive debt relief framework. There is no evidence of that today.

I can recall the time of my political awakening in the late 1970s, when the Irish economy was in considerable difficulty. There was some talk at that time about whether the World Bank or the International Monetary Fund would be brought into Ireland, which was enough to send a shiver down my spine. I have not lost that impression of those two institutions. I recall the infamous address, which was recently republished, by the then leader of Fianna Fáil, Charles J. Haughey, in which he spoke of us living beyond our means. Presenting this Bill as being in some way good for developed countries is a hypocrisy and a sleight of hand with which we should have nothing to do.

I particularly welcome the contribution by Deputy Roche, who made a very succinct argument. I understand his predicament, given the Whips system. However, there is no doubt the Government has no democratic authority to proceed with this Bill, on the basis of the freely expressed views of Members on both sides of the House. On the basis of that, I ask him even at this late stage, to reconsider the position of the Government in presenting this Bill without the very necessary meaningful reforms.

Deputy Roche made a very good point, although I do not agree it is the case now, when he said that a former Minister said in the past that there were no votes in black babies. That is out of step with the thinking of Irish people today, when one looks at the freely given contributions of the Irish public on many occasions to disaster funds around the world. Our contributions per capita have been among the highest in the developed world.

The Government is further out of step in its contribution to overseas development aid because we have frozen our contribution this year. To exacerbate that mistake by proceeding with this Bill, would be out of step with the wishes of the public. If one asked the public if it would give £30 million of taxpayers' money over 12 years and £17 million this year to the World Bank and the International Monetary Fund, one would get a very clear answer – the Irish taxpayer would say “no, thanks”. Given the unreformed nature of the Bretton Woods institutions of the International Monetary Fund and the World Bank, the public would prefer us to use this money in a way in which we have direct control over it, by giving it in bilateral aid to some of the countries in which we are involved at the moment, and for us to have no more to do with these institutions until they reform themselves and have a meaningful development role in the countries in which they are involved.

There is a new debate in Ireland, of which this is a part, on where we see our role in the international community, such as the area of Partnership for Peace, and how out of step our ODA contributions and this Bill are with publicly [915] expressed opinion. This Bill is morally indefensible and I appeal to the Minister to reconsider it.

On Sunday night I watched Myles Dungan's programme, “Divided World”, which should have been compulsory viewing for anyone voting on a Bill as important as this one. It dealt very clearly with the graphic realities of life in a country such as Mozambique, which is among the poorest in the world, and how the institutions of the World Bank and the International Monetary Fund are anything but friends of heavily indebted countries. After watching it, one could reel off statistics about the poverty levels, infant mortality, life expectancy, the level of investment by those countries in health and education, and the decaying environment in which people are obliged to live. It really made the case, to anyone with an open mind, why we should not contribute Irish taxpayers' money under this Bill.

When countries find themselves held in such a stranglehold by these institutions that they have no way out, are unable to invest adequately in health and education, are unable to prevent 40 per cent of children under five years of age dying and are unable to raise life expectancy beyond 44 years of age, there is an inevitable political instability and an unending cycle out of which these countries cannot break. Any overview of debt and development in the past 50 years would see that we have failed the people in these countries and that this Bill will only perpetuate their suffering.

I join previous speakers in commending the organisations which lobbied very effectively on this issue. We received some excellent insights into the realities. I also commend the RTE television programme, to which I referred.

We must be aware of and question the close link between the Bretton Woods institutions and the foreign and economic policies of the major world players. These institutions are often used to achieve economic ends that are most advantageous to these major players, particularly the United States and the other G7 countries, which will have to revisit their moral standpoint on these issues. Serious questions must be raised about whether they are more interested in developing economic opportunities for their own countries or are genuinely committed to resolving the debt problems of developing countries in Africa, South America, Central America, Asia and elsewhere.

When the Government decided in 1996 not to proceed with this Bill, the IMF carried out both an internal and an external audit of its operations. Both were equally damning, no matter which way one dresses them up. Previous speakers referred to the fact that more than three-quarters of the programmes financed under ESAF break down because there is very little bridge building between these institutions and the communities into which they are putting the finance and supposedly helping. There is an exclusion of civil society and parliaments, with many deals made [916] behind closed doors. The people who were interviewed on that programme on Sunday night were economists and representatives of the World Bank and the International Monetary Fund. There was a very cold and clinical approach to all this that was devoid of any humanity or concern for what is in the best interests of the populations of countries that are witnessing appalling circumstances.

To justify the Bill the Government uses the fact that it is honouring its commitment. I repeat that there is no democratic wish in the House, as clearly expressed by the public on numerous occasions, for supporting institutions that do not deliver effective help to these countries. In recent opinion polls on the level of overseas development aid, which should have been given the buoyancy of the Exchequer, the Government was found to be offside as regards public opinion.

The HIPIC initiative concerning heavily indebted countries under ESAF is another reason used to justify the Government's approach. However, the Minister would be wise to be aware of the views of the Financial Times – a publication which I am sure is more informed by the needs of investors rather that of recipient countries – which said the initiative had clearly run out of steam.

Both the internal and external audit which took place gave no reason for confidence in putting in the amounts of taxpayers' money, proposed in the legislation, to the IMF or the World Bank.

As we face into the new millennium there is a need to create development orientated institutions which seek to involve elected representatives and the broader community in countries to which they are lending financial support. The institutions should also take into account indicators of human misery such as lack of investment in education and health, life expectancy, infant mortality and the environment. These are factors that have to be taken into consideration in putting in place programmes for investment. A realistic view must be taken of the recipient countries' ability to repay.

We are led to believe that the system has been reformed and that these factors have been taken into account, but in reality the World Bank and the IMF have been forced to acknowledge that in the past programmes have broken down irretrievably. Basically, they will now take what they can get. Indebted countries are being bled dry by donor countries and consequently their population loses confidence in the political systems that govern them. This brings about an inevitable cycle of instability, insurrection, war, famine, death and deprivation. We need to break the cycle but the legislation before us is not an instrument for doing so.

Mr. M. Higgins: The Labour Party will oppose the Bill on Second Stage. I listened with great care to the speeches made so far in the House, particularly those from the Government side. Deputy Roche's speech made a powerful case [917] against the Bill. The only thing wrong with his speech was the Deputy's concluding remark when he said he would not vote against the Bill.

I addressed a meeting of the Debt and Development Coalition following which I conveyed its views – and those of other organisations with which I have been familiar for more than 25 years – to the Labour Party which has decided to oppose this Bill. I do not intend to go back over arguments that have already been made in the House. I want, however, to make some remarks about what I think is a great failure that has occurred this evening and that is likely to happen in future. I cannot pretend to be cheered up by conversions to the cause of Third World debt or by people who have come on side. It is nearly 30 years since I first gave an academic lecture in monetary economics. My lecturing is as old as the gold standard.

What lies underneath this legislation is not some simple principle of compliance with international commitments, which in 1996 the Government decided was powerfully posed by humanitarian arguments and by gross inefficiencies at the level of international institutions. There is a terrible hubris behind it which is reflected both here and internationally which is that economics reflects a kind of higher rationality, but, more important, that the higher rationality that constitutes economics is geared and driven by a version of the market place and by a series of compliant instrumental actions that will enable countries to advance their economic position. It is facilitated by a view of the economy as separated from a social and political setting, not to speak of a cultural setting.

It is basically a depopulated economy drawn in its essential elements from versions of the western economy in the most ill informed and ignorant period in the history of economic theory. Bretton Woods was attended by people like John Maynard Keynes whose major work on employment interests and money was preceded by a volume on the philosophical purposes and moral obligations of economics, as was every other significant work in the history of economic thought in the English language, through Adam Smith and the theory of moral sentiments.

In other words, economics as a subject was contextualised not just intellectually but morally. I wish to emphasise the point because it is not only in relation to the Bretton Woods legislation that we are paying an enormous price. We are paying an enormous price at home by being completely disabled by this crude, ignorant version of economics, this notion that there is a form of rationality that is superior in relation to financial matters, that is contaminated by moral concern and lessened by social connection. It is a junction that is being forced between economics and the other social sciences as disciplines and between economics as policy and the other policies that are practices. The price being paid for it is an inability to look at widened gaps in inequality at home or abroad, and every now and then to be put into [918] paroxysms by what we perceive to be the inevitable consequences of this disembodied economics.

I speak as somebody who was an academic for nearly 25 years. It is a shabby time in economic thought when this type of technical practice is used as a substitute for theoretically, intellectually informed and morally accountable scholarship and discourse. That is what has brought the IMF to the point, at the end of the 1990s, at which it cannot survive an internal or external audit conducted on its own terms.

Why have we not heard in this debate so far why the IMF's instruments are being used in contrast to any instrument used by the World Bank, which at least has the name of being a development agency? I do not intend to add another dozen rhetorical questions to those already posed and that is not a reflection on the present Minister. He is a man of immense personal charm but he is representing a kind of undertaker version of what was once a subject. This is not a subject, discipline or set of policies.

I was present when one of the authors of this disastrous strategy of anti-human intervention in material affairs – the science of scarcity – was given the Nobel prize, as a representative of a version of the Chicago school of economics. I was also present in Chile after the plebiscite when the dictator was getting his final answer from the Chilean people, and when the people from the Chicago school arrived – los muchacos Chicago. They imposed their pernicious version of economics which had not been mandated or even tested at a meeting where people were asked if they wanted it. Long after I came home, I read that Chile was one of the successes of Latin America.

I was in South East Asia and Vietnam, which suffered a blockade in relation to aid. It had an impossible relationship with the IMF. Last summer I was in Cambodia where one child in three dies at birth, another dies of malnutrition before the age of three and another child is seriously malformed by the age of five. Less than two children make it to the age of five and 87 per cent of the people do not have access to clean water. When I returned to Phnom Penh I listened to international reports about what the IMF was doing about Cambodia, Kompong Chhnang and South East Asia. The IMF was interested in saving banks. It was not interested in the people of South East Asia.

I will not fall into the trap of suggesting that a small number of people are meeting in an unknown place and plotting the downfall of the great majority of the people of the world. However, I want to emphasise this matter because the evidence I have based on my experience is that we are acquiescing in a form of economics that is the least accountable in the history of the subject. It is on that principle that the IMF's current proposals in relation to ESAF are structured. It is a type of moral acquiescence. It would be almost easier to live if one did not know [919] the consequence of the actions. There are a number of stages; the first is to know the consequences and the second is to understand them. There is then a moral choice to be made about whether one will acquiesce with it and state that there is nothing we can do about these disembodied economics which are internationally expressed and structured through these instruments. The Minister must attend the meetings abroad and say something.

This is a Parliament where there is supposed to be democratic accountability. That is the position here, but what does it tell us about our ability to do anything significantly moral internationally? Would it not be better if we were listening to an announcement that Ireland had taken a lead and was calling an international conference and would invite people to say whether they wanted to cancel or reschedule the debt? I am in favour of cancellation.

How can people speak about foreign policy which is built on any consensual basis or any normative theory if people are being asked to pay their debt at the expense of health, education, housing, medicine and life itself? Perhaps people feel similar to the IMF man who was interviewed on television. One can deconstruct his statement until the cows come home, but he said that he would also like not to have to pay his mortgage. That is the crudity of the small minded, intellectually debased and rotten type of thinking that is at the core of these institutions.

I am not speaking emotionally, rather in praise of reason, a rationality that is morally informed, an economics that is disciplined and policies that are built on a theory of interdependence and debated. People then would not feel ashamed about speaking about such economic policies being instrumental in theories that accept human interdependency. They would mean it would be unnecessary to say at the end of the debate that one is sure the Minister will listen to the views of the Missionary Union, the Debt Coalition and others. It is wrong in terms of fundamental principles. It is as wrong as those international terrorists who took the instrument of the marketplace in economic theory and sought to impose it as an ideological fact across every circumstance.

One cannot have a market where people rely on GDP for the basic principles of survival. I do not suggest one should ignore the market. I accept the market as a mechanism of distribution, even of services in certain circumstances, but not its imposition as a fundamental principle where debts will be paid if necessary by life, education, health and clean water.

The great exception to the great theory is that if life does not fit into the market, the sale of armaments does fit. What is the position in relation to the IMF going back to its drawing board and speaking about a levy on all those countries that sold armaments to the countries most in debt? Armaments help the balance of payments and the structure of the theory is that [920] what is good for the balance of payments must be good for the people. All that is necessary is to produce one generation of slaves long after another for the country's debt and somehow everybody will be better off because this madness was kept going.

I recall making a documentary in Rio during the United Nations conference on economics and development when the most moving statement was made by Fidel Castro in a short speech. He said: “Let us pay the debt to humanity before the debt to the banks.” Regardless of whether one agrees with him, it explicitly put the right to life expressed internationally above the right to debts. I was in Nicaragua when it was renegotiating its post-dictatorship debt. Mr. Xaibier Govostiaga was the negotiator with people from the institute of social studies at Den Haag in Holland. They got their loans from the international institutions when they agreed to take over the dictator's debts. They could not get one penny until they agreed to pay the dictator's debts.

This is the end of the 1990s and it has been stated that an internal audit on the application of programmes will be conducted and that this will tell the institution something. It is supposed to satisfy us, but I am horrified. The time has come to pose fundamental questions about all these institutions. I share many of the views expressed about this matter. The point made by different people and organisations is that the Bill does not guarantee any accountability in the Oireachtas in relation to future contributions that may be sought by this institution which looks after itself. It is a plea for accountability, but even if that was not the case, the point is that the instruments chosen by the IMF are destructive socially and economically in terms of how they are applied to the people who are most affected.

Another two shabby aspects are the inappropriateness of discussing giving money to this institution, which I insist can be described as I have done, at the same time as disaster relief funds are being cut and, second, the shift from the commitment to the UN target as a proportion of GNP to an absolute figure. I would make these points irrespective of who was the Minister for Finance. The time has come to say these things.

This Bill was introduced by the Minister for Finance, not the Minister for Foreign Affairs. I recall the time when overseas development aid struggled to get in the front door of Iveagh House. Real people deal with finance and real economists are not theoretical but technosists. Sophisticated technosists work for the most unaccountable institutions abroad and when these institutions are forced to examine anything, they say they will do it themselves. If people get in the way, they will have another audit in another few years. It would be morally instructive and helpful if people said it had nothing to do with those to whom it is directed in Asia, Africa, Latin America and elsewhere. It would be better to say that it relates to the institutions. In a way, that would be more honest because there is no clamour for [921] it. I recall that Chile was used as an example one year and I understand Uganda is now the shining example. It has cut back on education to meet the requirements of the particular advances that have been made.

I am not arguing for the transmission of resources without any conditions whatsoever. I am arguing for Ireland to take an initiative which would go beyond the refusal of this Bill and put a question mark over international institutions in relation to credit. We should support those who are interested in achieving a rationality in economics and practising economic policy which would respond to the needs of, and deliver a surplus for, the international community. We should not allow ourselves to be victims of a bogus rationality which is as unaccountable as it is anti-democratic. There is a moral concern among people who know surpluses are available in this country and throughout the world and want them distributed in particular ways. They are prevented from doing so by the existence of a cast iron rationality designed to stop them intervening in a redistributive manner.

In some of the worst pieces I read on economics in one of the banking journals, it was stated that spending decisions should be taken away from the Dáil altogether because we might be fickle about them. A former adviser to the ex-Taoiseach and current leader of Fine Gael was in favour of taking spending decisions away from Parliament entirely as we could not be trusted with them. That is an example of illiterate economic theory. Such a move would be bad economic practice, not informed economic principle. People are perfectly free to write that kind of material – which is something of a cross between weather forecasting and racing result predictions – but it is not economics or political economy.

We are hearing the same old guff all over again here, whether it comes from the Chicago School of Economics or international institutions. There seems to be a belief that a kind of expertise exists which derives from a rationality that must not be unaccountable. It is accompanied by a corrosive cynicism – including the irony which sometimes contrasts Utopian models with the practices with which we are forced to live – which implies that some people know better than the public.

I do not believe it is possible to amend this Bill. It reflects an inability to go to the root of the institutions to which it suggests we make a contribution without adequate review and without an agenda on international debt which we might have pursued. The Labour Party opposes the Bill.

Mr. Neville: I welcome the opportunity to contribute to this debate. We all recognise that we have an obligation to respond to the situation in the Third World. However, we have failed dismally over a number of years to respond in an adequate way to ensure we fulfil our obligation to the Third World and developing countries. I have visited some of the most remote areas of Africa and it is shocking to witness the standard [922] of living and services there and the level of suffering people experience. I recall an occasion on which I visited a small village on the Libyan-Angolan border and a sum of five Namibian dollars obtained some medical treatment for a very ill child who was suffering from nasty sores. That equated with 80p of our money and represented the difference between the child obtaining treatment and not obtaining it. If we had not had a presence there that day, the child would not have been treated. People do not realise how difficult it is to survive in many areas of the Third World.

The Bill seeks to make payments authorised by the Government under the debt relief package announced by the Ministers for Finance and Foreign Affairs last autumn. The package amounted to a total of £30.5 million over 12 years, £17 million of which will be paid up front this year. In modern times, that sum is derisory. We could make all sorts of comments on where money is being allocated but we must question the allocation of a mere £17 million in debt relief in 1999.

I am not focusing on the present Minister; previous Ministers and Governments have adopted a similar approach to the Third World. We boast about our missionary zeal throughout the centuries and our contribution to world peace but when it comes to helping the poorest of the poor, we are very slow to put our hands in our pockets and give adequate money. Given our history, we should be ahead of other countries in this regard.

While Fine Gael supports the initiatives outlined in the Bill in general terms, the advice we have received from those who are well informed about Third World debt, including the Development Coalition of Ireland and former missionaries, is that there is an urgent need to assist Third World countries. Although I would question the role played by some former missionaries, they are keenly aware of the situation in the Third World. They are seriously concerned about the proposals contained in this Bill and the decision to fund the enhanced structural adjustment facility. In view of the Government's decision to fund the ESAF, the Bill should not be supported.

One of the key burdens experienced in developing countries relates to debt. Debt is directly related to the lack of social programmes in many countries. In Tanzania, 40 per cent of the population die before their 35th birthday. The Tanzanian Government spends six times more on debt servicing than on the provision of health services. That is disgraceful and the developed world is allowing it to happen. On average, people in Third World countries have a life expectancy which is only half that of people in Europe. Yet we insist they pay six times more on debt servicing than on the provision of health services. In Zambia, the cost of external debt servicing is five times greater than expenditure on education. I have visited the outskirts of Lusaka and witnessed people starving. Many of them had to travel two miles or more for a bucket of water. A minimal amount of funding would allow water to be tapped on site. There was no funding.

[923] Education is the key to improving a country's future. We have seen the response of this economy and our people to improvement in our education system. However, in Zambia the expenditure on servicing debt is five times that on education. In Ethiopia more than 100,000 children die annually from preventable diseases. Here again the amount of money spent on debt repayments is four times that spent on health. When the burden of debt is so onerous, the approach of agencies such as the IMF will have serious effects on the life opportunities and on the survival rate of the people of the Third World and in the countries it targets. In trying to correct the problems of the economy the poor will be made poorer, more children will die, more will drop out of education, and life expectancy will not increase but diminish. The ESAF programmes will be the main cause. The Minister should reconsider his proposals.

Any series of measures proposed by the IMF which diverts resources from investment and human development, from infrastructure and the development of the economy into debt servicing, sacrifices people, their lives, their education, their health and any hope they have of breaking out of the conditions we as a human race forced upon them. It also stops future development. It frequently raises social tensions and causes conflict which has been evident over the past decade.

The Government will obviously persist with its proposals to fund the ESAF. The decision goes against the debt policy principles which the Government has announced. Recent reviews of the ESAF have been very critical. The IMF has not addressed the issue of the necessary reforms needed in the operation of this facility both in terms of ownership and in terms of its content. The Debt and Development Coalition is opposed to the Bill. The coalition of people involved in this seem to be the only body in Ireland, beyond the Department itself, who have an in-depth knowledge of the problems of debt in Third World countries. Certainly the hands-on experience of such groups, particularly in Africa, has to be taken into account. Their opposition to the Bill should not be ignored by the House. They object to the negative impact of ESAF. The International Monetary Fund aims to reduce deficits, not to reduce poverty. Human need is not a priority in the approach the Minister is proposing.

There is also a strong argument that the programmes imposed by the ESAF undermine democracy, that they are designed in the IMF headquarters in Washington and then imposed on selected countries by bureaucrats who see figures and use calculators and ignore the impact they will have on people's lives in the countries with which they are dealing.

One significant factor about the ESAF programmes is that they are so onerous and so inappropriate that three quarters of them break down. It has helped to justify funding programmes [924] which have such a bad track record. I call on the Minister to reconsider.

The ESAF was introduced as a response to the debt crisis, and it failed to tackle the problem of debt crisis in Third World countries. Following the programmes debt has doubled in the ten year period between 1985 and 1995. The policy proposed by the Minister has been proved not to work. The internal review of the ESAF focused on progress towards achieving macroeconomic targets. Targets to reduce budget deficits or raise Government revenue were not reached. There was no real overall change in inflation levels, and economic growth rates remained lower than the average for the developing countries. The external review examines case studies and outlines specific mistakes that were made in dealing with economies which at best can be termed economies in transition, for example, Mozambique, where the IMF insisted that the State should divest itself of the ownership of most of the industry in the country. As a consequence 50,000 to 100,000 jobs were lost. Private industry was simply not interested nor ready to take up the slack of providing jobs for the people who were simply thrown aside. I am disappointed that the Government has decided to reverse the decision made by the Rainbow Coalition in 1996 not to fund the ESAF programmes. The external review recommended that the IMF should work with the World Bank in identifying in advance which groups may lose through the ESAF programmes.

I pay tribute to the contribution to the Irish non-governmental organisations, Trócaire, Concern and GOAL, who have worked hard to assist the development of the Third World. I urge the Minister to seriously reconsider his approach to this Bill.

Proinsias De Rossa: Deputy Neville said at the beginning of his contribution that he did not have the eloquence of Deputy Michael D. Higgins. Very few of us have the capacity to make such an eloquent case. Nevertheless, Deputy Neville made a strong and persuasive case that this Government should abandon this Bill. There is virtually no rationale for proceeding with this Bill. Virtually every aid organisation which delivers direct aid to countries that are indebted is opposed to the Government participating in ESAF. The case being made by Government in support of this Bill that it would seek reform once it joins does not bear scrutiny. The IMF had already undertaken an external review of how ESAF operates, and the report is devastating. It is nonsense for this Government to put what little money it provides for aid into a scheme which will result in deeper poverty and social disintegration in those countries we are seeking to help.

When Deputy Derek McDowell opened the debate for the Labour Party on this Bill, he read into the record an amendment whereby we indicated that we would oppose this Bill on Second Stage. I hope that Deputy Roche on the Fianna Fáil side, who also spoke very eloquently in oppo[925] sition to this Bill, will continue to lobby. I honestly do not expect him to vote against his party. It is a rare occasion when I can praise Deputy Roche because he rarely says anything in this House with which I agree. However, the speech he made this evening on ESAF was one which I fully support. I hope he continues to lobby within the Fianna Fáil Party to have this Bill withdrawn, because there is no rational basis for it proceeding beyond the Second Stage.

Debate adjourned.