Seanad Éireann - Volume 87 - 07 December, 1977

International Development Association (Amendment) Bill, 1977 [ Certified Money Bill ] : Second Stage.

Question proposed: “That the Bill be now read a Second Time.”

Parliamentary Secretary to the Minister for Foreign Affairs (Mr. D. Andrews): The purpose of this Bill is to enable Ireland to contribute £5,819,705 to the Fifth Replenishment of the Resources of the International Development Association, IDA. The funds are required so that the Association may be able to continue and expand its work of promoting the economic development of the less-developed countries.

IDA is a subsidiary of the World Bank and was set up in 1960 to provide loans on concessionary terms to the poorest of the developing countries. These concessionary terms consist of 50-year loans, with a ten-year grace period before repayments commence, the only charge being a service charge of ¾ per cent per annum. The need for this type of lending arose because the poorest developing countries find it very difficult to finance their development programmes on ordinary commercial terms. Even when commercial finance is available, it places a serious burden on their debt-servicing capacity. The Association's lending is concentrated on those countries with a gross national product per capita of less than £300.

The Association is managed by the President, Robert McNamara, reporting to a Board of 20 Executive Directors elected by its 117 member countries. Policy matters are decided by the Board of Governors, there being one Governor for each member. Both of these Boards have the same membership as the World Bank and the International Finance Corporation, the other bodies in the World Bank Group.

IDA's membership of 117 is divided into 21 Part I or developed countries and 96 Part II or developing countries. Its resources, amounting to almost $12 billion, come from initial subscriptions, three-yearly replenishments and transfers from the World Bank. The bulk of [790] these resources are provided by the three-yearly replenishments, to which the Part I countries are the main contributors. There have been four such replenishments to date, the last one providing IDA with almost $4.2 billion for the period July, 1974 to 30th June, 1977.

Ireland is a founding member of the Association, having contributed £1.15 million to its initial capital as a Part II member. We did not contribute to the First and Second Replenishments, but we did agree to make a special contribution of approximately £2½ million to the Third in 1970. In 1973 Ireland became a Part I member, because of the substantial economic progress made during the sixties, and contributed £3.1 million to the Fourth Replenishment.

In March of this year, representatives of the 21 Part I countries and five Part II countries, consisting of the Republic of Korea, Saudi Arabia, Spain, United Arab Emirate and Yugoslavia, agreed to a Fifth Replenishment equal to $7,638 million for the three-year period beginning 1st July, 1977. This is of course subject to legislative approval in the individual donor countries.

It was agreed in the negotiations that traditional donors, that is, those who had contributed to previous Replenishments, would provide $7,200 million of the total, an increase of 60 per cent over the original amount promised in the Fourth Replenishment. Because of the depreciation of the pound vis-a-vis the dollar in the intervening period, this would have meant a contribution by Ireland of £7.1 million, an increase of 130 per cent over our previous contribution. This was obviously unfair, and a final figure of £5.8 million ($10 million) was agreed after bilateral negotiations.

Agreement to contribute this amount does not mean that it will actually be paid over the three-year period of the Replenishment. Instead, non-negotiable, non-interest bearing demand notes will be deposited with IDA, who will call cash payments as and when the projects which are being financed by the Fifth Replenishment require the funds. In effect, we will pay the £5.8 million over a period of six-nine years.

[791] The resolution authorising the Fifth Replenishment was approved by the Board of Governors on June 16th of this year. Contributions fall due 30 days after members, including 12 Part I countries, whose contributions amount to not less than 80 per cent of the total Replenishment, formally notify the Association of their intention to take up their allotted subscription. The present position is that 34 countries, including 13 Part I countries, with contributions amounting to 43 per cent of total commitments have already done so. Notification by the United States is likely to be given shortly and the Fifth Replenishment will then require notification from just one other major country to become effective.

This Bill, if enacted, will enable Ireland to participate in the expansion of crucially important concessional assistance to the poorest developing countries. There are 750 million human beings trapped in absolute poverty, whose condition of life is beneath the level of human decency. This is a tragedy of ghastly proportion when one thinks of the resources available, and the sophistication of modern technology. The IDA has become the international community's primary weapon against the worst forms of poverty, and the size of the Fifth Replenishment is evidence of the support it receives. The fact that Irish contributions to IDA take up well over 10 per cent of our total annual spending on official development assistance speaks for itself, and the proposed contribution of almost £6 million enables us to demonstrate our continued support of the Association.

I recommend the Bill to the House for adoption.

Mr. Alexis FitzGerald: I should like to welcome this Bill wholeheartedly and give it the full support of my party. In doing so I note that the motivation behind this measure, which is part of the technical means by which we endeavour to cope with this appalling problem to which the Parliamentary Secretary has referred, is shared by every Christian and every humanitarian who recognises the unity and [792] interdependence of mankind. I cannot see how anyone with a conscience can create an obstacle to a measure of this kind.

I should like to make a few short observations, recognising the time at which the Parliamentary Secretary started and the time at which we usually close. From time to time one hears comments on the waste of money that goes to the Third World, on the corruption of officials and its not reaching the destination of the people in real poverty. I trust it is the concern of the Government, as one of the contributors on behalf of the State to this fund, to see that so far as possible all the media which are used are improved to see that the funds reach their proper destination.

The second point with regard to that is there has been a considerably growing volume of criticism of the nature and appropriateness of the technology which is being demanded by those in charge of the Third World states, the appropriateness of it to lift their peoples from the poverty in which they are. Again, I hope the Government on behalf of the State are alert to seeing that full attention is given to the improvement of and the appropriateness of this technology.

The third point is to ask a question about the catchword about the rich becoming richer and the poor becoming poorer to which I have no answer but one to which attention ought to be given. To what extent does the wealth of the developed countries depend upon the poverty of the Third World? How true is it to say, as so many people do, not necessarily people who seem to have a great deal more than enthusiasm with regard to the projects and the matter in hands, that there are injustices in the economic structures of the developed world which are holding back the development of the developing world? I feel we should not use this as a salve to our consciences, and we should tear away any hypocrisy there may be involved in this. I wonder whether the people to whose somewhat empty heads imported liberationist theology has rushed, as imported intellectualism very often rushes quickest to empty heads, are correctly [793] directing their attacks on Governments, whether this Government, their predecessors, or any Government— when they are attacking our failure to make a larger contribution, whether their attacks ought not to be directed at the attitude of the people who will have to provide these funds, whether the question we should honestly face here and in the other House, is the fact that the money to be provided, if the provision here made is to be ultimately borne as a cost by this community, is going to be borne as a cost by this community through the exaction of taxation.

Anybody who makes a criticism of Governments with regard to an insufficient contribution at any given time is in my view over-stepping the mark. If the critics are ecclesiastics operating within their Church they are talking beyond their function and without appropriate knowledge of what they ought to know. It is the function of the statesman to know what is the appropriate level of taxation, to know what his people will take. Where the charitable minded theologian can help is if he can stir the conscience of the people to agree to acceptance of the appropriate burden. This is precisely where I suggest the dignitaries of the Church ought to be directing their attacks and attention, a worthwhile attention that would be in which case one might conceive the possibility of a tax similar to the sort of tax that exists in Germany, the church tax. One might get some sort of a Third World tax the proceeds of which would be understood to be for the Third World. Then the people could be encouraged to vote for an increase in that tax if any political party put that forward in their manifesto in seeking the votes of the people.

We ought firmly, as the representatives of State, as the elected people in [794] this Parliament, to defend our rights to speak on these matters, to recognise the problems and not be bullied by any people on it. I share the views of the liberation theologists on the duty. I do not share their views as to the cause of the problem but that is another matter and I do not want to burden the House with it now.

I should like to end with one point relating to a general theme. Frequently there arises here and in the other House this question about the imposition of morality. Nobody here I imagine will question the imposition of our morality, the morality that is shared no doubt by everybody here and in the other House and hardly dared be repudiated by the people. The morality of looking after 750 million people and the average of 300 million dollars or pounds per annum is an average which means that what is lowest down is very much lower. I do not think there is going to be a great deal of resistance to the morality of that. Are we who have that morality in supporting this measure not imposing our morality on the people? What is the distinction between imposing our morality on this matter and imposing our morality on another? I thought that relevant to that general debate.

Mr. Whitaker: The last time I spoke here a fortnight ago was on a Bill concerned with promoting our own economic and social development. I am very glad that this evening we are concerned with doing something to help make a little easier the lot of the peoples of the Third World. I fully support the Bill which is designed to increase our financing of the IDA.

Debate adjourned.

Seanad adjourned at 8.30 p.m. until 11.30 a.m. on Thursday, 8th December, 1977.