Seanad Éireann - Volume 163 - 14 June, 2000
International Development Association (Amendment) Bill, 1999: Second and Subsequent Stages.
Question proposed: “That the Bill be now read a Second Time.”
Mr. Cullen Mr. Cullen
Minister of State at the Department of Finance (Mr. Cullen): The purpose of the Bill is to authorise a contribution of £20 million by the Irish Government to the twelfth replenishment of the resources of the International Development Association.
The International Development Association, IDA, is an affiliate of the World Bank. It is one of the bank's main instruments in the fight against extreme poverty. It was set up in 1960 to assist the poorest countries which cannot afford to borrow money from the World Bank on its normal terms. It lends to countries with a per capita income, in 1998 terms, of less than $895, that is less than $3 a day. There is also an exception for small island economies that have limited creditworthiness. The beneficiaries of IDA lending are the 2.3 billion people comprising 53% of the total population of the developing countries, who live in the 78 countries which are eligible to borrow from IDA. Today, 1.5 billion of these people survive on incomes of $2 or less a day and 1.07 billion on less than $1 a day.
The mission of IDA is to support efficient and effective programmes to reduce poverty and improve the quality of life in its poorest member countries. IDA helps build the human capital, policies, institutions and physical infrastructure needed to bring about equitable and sustainable growth. Research conducted by the World Bank has shown that positive growth rates do not automatically lead to poverty reduction. Additional measures are needed to ensure that this takes place and IDA is the primary multilateral agency which is specifically charged with ensuring that these measures are identified and undertaken.
The current debate on development issues often focuses on cases where progress and development fall short of what was expected at the outset. However, we should not lose sight of how much has been achieved over the years. Over the past generation, more has been done to reduce poverty and raise the quality of life than during any comparable period in human history. Advances in health care in particular have brought enormous benefits to the developing countries.
Over the past 30 years infant mortality rates have been cut in half, life expectancy has increased from 55 years to 64 years, child malnu trition rates are 20% lower than 30 years ago and certain nutrition-deficient diseases have almost disappeared. Primary school enrolment rates in developing countries have reached almost 80% and gender disparities have narrowed, with the percentage of girls in secondary schools rising to 45%. Adult literacy has risen from 46% to 70% and there is greater consensus than ever before, in rich and poor countries alike, on what governments must do to improve the lives of their people. The developing countries themselves have been the motor driving these achievements, but their efforts have received strong support from donors, including IDA.
It must also be recognised that a large number of developing countries at the lower end of the income spectrum continues to experience unacceptably high levels of poverty and deprivation. In these countries poverty reduction strategies must help to build capacity to address the weaknesses in governance and in institutions which lie at the root of their poor performance. It has increasingly been recognised that good governance is essential both to economic development and to the effectiveness of development assistance.
The twelfth replenishment or IDA 12 negotiations identified four dimensions of governance which are particularly important to economic development, poverty reduction and the effective use of IDA resources. These are accountable and competent public institutions, transparent economic and social policies and practices, a predictable and stable legal framework and participation by affected groups and civil society. IDA is selective in identifying those countries which achieve progress in implementing policy reform programmes, especially instances of poor governance and corruption.
The experience of overseas development aid over the past decades has amply demonstrated that these issues, and in particular corruption, tend to undermine development and constrain aid effectiveness. Corruption also creates barriers to the effective promotion of private sector development, raising costs and reducing growth.
Gender inequality is also inimical to growth in that it deprives a nation of a significant part of its productive assets and discrimination due to caste, race, ethnicity or religion is also a significant barrier to growth and can even undermine results already achieved when it leads to civil conflict.
IDA and the World Bank are now committed to addressing the problems of institutional weakness combined with inappropriate or unenforced policy or legal frameworks which often permit corruption to flourish. IDA recognises that addressing these problems will require a long-term effort, particularly in building up the institutional capacity to make the necessary changes.
IDA's mandate will also take account of issues such as democratisation and respect for human rights which can also have important long-term implications for the capacity of a country to  initiate and, more importantly, sustain programmes for effective poverty reduction, economic adjustment and growth. Lending to countries with weak governance will be scaled back or stopped entirely if necessary.
IDA recognises that its impact on poverty can be judged only by the results which its operations achieve in the field. For the twelfth replenishment a number of priorities have been agreed by IDA donors. These will focus on investment in people which has been shown to be vital for development. It will also promote broadly based development and encourage sectoral reforms that promote labour intensive growth and benefit the poor. Specifically, IDA 12 will give priority to investments in education, health and social programmes, reduction in non-productive expenditure, such as excessive military spending, pro-poor policy reforms, especially those which address the needs of the rural poor, small farmers and micro-enterprises, policies to ensure the sustainable use of natural resources, assuring the access of the poor to land, credit and information, establishing basic labour standards and reforming legislation and policies that disadvantage the poor.
As a major step toward concerted action for development, the international donor community has agreed to focus on a series of key goals in partnership with developing countries. These goals, which are based on United Nations conferences and resolutions reflecting broad agreement by the international community as a whole, were set out in Shaping the 21st Century: The Contribution of Development Co-operation, issued by the Development Assistance Committee of the Organisation for Economic Co-operation and Development in May 1996.
The goals for the year 2015 include reducing by half the proportion of people living in extreme poverty; achieving universal primary education in all countries and universal access to reproductive health services; reducing by two-thirds the mortality rates of children under five and maternal mortality by three-fourths; ensuring full access to primary health care; and reversing trends in the loss of environmental resources. The intermediate goals targeted for the year 2005 include demonstrated progress toward gender equality by eliminating gender disparities in primary and secondary education and the implementation of national strategies for sustainable development in all countries.
The recently inaugurated Poverty Reduction Strategy Papers represent an innovative approach in the fight against poverty and one which has found wide acceptance among both donor and recipient countries. Among other innovations, they offer a framework within which the World Bank, including IDA, the IMF, donors and beneficiary countries can work together to enhance development impact in a participatory manner, integrating priority measures for poverty reduction and structural reforms within a growth-oriented macroeconomic framework.
 Education, in particular, provides major economic, social, cultural and institutional benefits. A new education sector strategy is being prepared by IDA which is expected to provide a framework for deepening the policy dialogue with the world's poorest countries on the options for rapidly increasing access to quality basic education, with a focus on making better use of government, donor, and private resources.
IDA offers loans free of interest, carrying only a nominal service charge. The loans have maturities of 35 or 40 years with a ten year grace period on repayment of principal. They are funded by IDA replenishments which consist of grants provided mainly by its richer member countries. These donor replenishments are supplemented by repayments made by IDA's borrowers in respect of earlier loans and transfers from the available net income of the World Bank.
The twelfth replenishment, IDA 12, amounts to SDR 8.65 billion and covers the period starting 1 July 1999. This donor funding, when combined with the reflows and World Bank transfers, will allow IDA to commit lending of about SDR 15.25 billion between 1 July 1999 and 30 June 2002.
The Irish contribution to IDA 12 will amount to IR£20 million. This is made up of a basic contribution of approximately £15 million, 0.18% of total donor resources, an increase from 0.13% for IDA 11. We have also pledged a supplementary contribution of £5 million which brings the total for Ireland to 0.24% of total donor contributions.
Of the donor countries, Ireland, Finland, Greece and the UK have increased their basic shares from that in IDA 11. In addition, Ireland, Australia, the Czech Republic and Israel have added supplements to their basic contributions. Senators may note the Irish agreement to exceed our previous share was instrumental in evoking increases in basic contributions and other supplementary payments and thereby helped bridge the funding gap facing IDA 12 and bringing the difficult negotiations on this replenishment to a successful conclusion. The actual cash payments for IDA 12 will be made over a six year period beginning in the year 2000. Contributions to multilateral bodies such as IDA and the World Bank qualify as part of Ireland's overall contribution to overseas development in the context of the UN target of 0.7% of GNP.
Overall, IDA assistance is positive, progressive and imaginative and is fully focused on both meeting basic human needs and on raising the aspirations and potential of the poorest sections of humanity. However, it is not sentimental. IDA assistance is not measured against the policy performance of the recipient countries. While neither the IDA nor the World Bank Group has any interest in taking control of the domestic policy-making process in recipient countries, the requirements of effective aid-giving require that certain minimum standards are met in areas such as governance and the fight against corruption. To ignore these realities is to risk wasting resources which could be used to achieve real  results in countries which are making serious efforts to improve their institutional capacity.
IDA is fully prepared and equipped to render such assistance as is necessary to governments which make serious efforts to address these problems. Ireland's membership of IDA was authorised by the International Development Association Act, 1960. Our contributions to the various replenishments have each been authorised by amendments to that Act. This Bill will enable us to make our contribution to IDA 12. I therefore recommend the Bill for the approval of the House.
Mr. J. Doyle Mr. J. Doyle
Mr. J. Doyle: I welcome the Minister to the House. On behalf of Fine Gael, I am happy to welcome this Bill which authorises a contribution of £20 million by the Government to the twelfth replenishment of resources of the International Development Association. The IDA is part of the World Bank and is the bank's main instrument to fight against extreme world poverty. It is extraordinary that we should be debating this issue today when only two weeks ago the Multilateral Investment Guarantee Agency (Amendment) Bill, 1999, was before the House. This agency is also part of the World Bank and one of its functions is to encourage the flow of investment to developing countries.
The measures proposed in this Bill appear to be a more positive approach to helping developing countries. The function of the IDA is to assist the poorer countries which cannot borrow from the World Bank on its normal terms. I note that the IDA gives assistance to countries with a per capita income at below £721 and more than 90% of IDA lending goes to countries with a per capita income of less than £507. This would roughly correspond to the per capita income which the Irish people enjoyed 50 years ago. It shows there is now a gap of 50 years between Ireland and the developing world, which is a long time. Whatever financial difficulties have been experienced since then, they pale into insignificance when one realises that 3 million people live on less than £1.56 a day and 1.3 billion people on less than 78 pence per day.
The gap between the rich and poor countries continues to grow. By the end of this year, the number of people living in absolute poverty will have increased by 1.5 billion, nearly a quarter of the world's population. As the richer countries increase their share of global wealth, there is a moral responsibility on us to respond to the needs of the less well-off.
The less well-off countries bear more than their fair share of natural disasters such as earthquakes and flooding. On the economic side, there is often a low price for the commodities they export or manufacture and this leads to financial difficulties for these countries. Financial crises have decimated whole societies. Many of these societies about which we speak lack the basic facilities we take for granted such as clean water, sanitation and primary health care services, especially for  mothers. A small amount of expenditure on health could go a long way to saving the lives of hundreds of children in these very deprived areas.
I am pleased that IDA intends to address these issues with its next tranche of funding. This will include the £20 million which Ireland is making available. One can be certain that in Third World countries where such basic facilities are missing there is also a lack of basic primary education for young children. One requirement of the fund is that provision should be made for universal primary education.
Extreme poverty and low standards of living in the Third World often go hand in hand with serious conflicts between different parties which results in civil war. There are often prolonged periods of famine which affect the weaker sections of these countries. It must be the aim of IDA to promote good governance in such countries and to eliminate corruption because if investment in poorer countries is to bear fruit, it must go hand in hand with sustainable democracy. I am pleased that the Minister of State laid special emphasis on the principle of good governance and lack of corruption. He outlined the four principles on which IDA intends to work to sustain democracies in Third World countries because, irrespective of the money we provide through different agencies, if there is not sustainable democracy which eliminates corruption the funds will not go where they are mostly needed.
Financial assistance in the Third World for developing countries will only solve part of the problem. It is essential that such contributions are supported by the active participation of personnel with expertise. I pay tribute to our NGOs and missionaries who have been helping people throughout the Third World. Organisations such as Trócaire, GOAL, Concern and many others have played a major role in providing food and primary care in many areas of the Third World. Trócaire's immunisation programme has played a major role in the Third World. It has been successful in combating diseases, such as malaria, measles and pneumonia, and malnutrition, which causes the death of 25,000 children per year in developing countries.
Give the economic growth Ireland is experiencing we should be more generous in our contributions to the developing world. I am glad that the Minister of State at the Department of Foreign Affairs has outlined her intention to achieve the target of 0.7% of GNP for overseas development aid over the next few years. If that can be achieved, we will have played a major part in helping the Third World. I commend the legislation to the House.
Mr. Finneran Mr. Finneran
Mr. Finneran: I welcome the Minister to the House. I support the legislation and compliment the Government on its approach to overseas development aid over many years. It was estimated that total payments, transfers and credits  in overseas aid by the Government for the benefit of developing countries would amount to £178 million in 1999, the largest amount ever. ODA has grown significantly in recent years, reflecting a political and popular consensus on the issue. Between 1992 and 1999 it rose from £40 million to £178 million, a fourfold increase. That is welcome and successive Governments should be complimented on their approach.
Ireland is a member of the World Bank and its four affiliates, the International Development Association, the International Finance Corporation, the Multilateral Investment Guarantee Agency and the International Centre for Settlement of Investment Disputes. Ireland joined the bank in 1957 and its total capital subscription to the bank to date amounts to £636 million or 0.35% of total subscriptions. Approximately 6% or some £37 million of the subscription has been paid in and is usable by the bank for lending. The remaining 94% is in the form of non-pay in or callable capital, which constitutes a general guarantee of the bank's obligations. Ireland's record in this area is to be complimented. There is general consensus that Ireland should continue to support developing countries at a time when its economic position has improved so much and where possible increase its contributions. That is the Government's policy.
IDA credits mature over 35 or 40 years with a ten year grace period and repayment principle. No interest is charged but the credits carry a small service charge, currently 0.75% of undistributed balances. Sometimes we forget about the credits which are repaid. They play an important role in overseas aid. Since 1996 IDA has lent almost £115 billion to 100 countries. It lends £5 billion to £6 billion on average per year for different types of development projects, especially those which address people's basic needs, such as primary education, health services and clean water and sanitation. IDA also funds projects for the protection of the environment, improves conditions for private business, builds needed infrastructure and supports reforms aimed at liberalising economies. All these projects pave the way towards economic growth, job creation, higher incomes and a better quality of life. IDA funds allocated to borrowing countries reflect their income level and track record of success in managing their economies and ongoing IDA projects. There should be proper monitoring of moneys which are allocated and expended.
Development experience demonstrates that investment in basic social services is vital and the Minister of State emphasised that in his contribution. Such services include primary education, clean water and sanitation, preventative and reproductive health services, which are vitally important, nutrition and social protection to address people's needs so that children who must work do not sacrifice opportunities to learn and have the opportunity to attend school. That is the way forward. Education is vitally important in the fight against poverty and in the emergence of  more democratic and progressive regimes in countries which suffer from social deprivation and poverty.
These investments are designed to increase the productivity of the poor and hasten their emergence from poverty. IDA investments in the social sector, particularly in areas such as the education of girls, have increased steadily in recent years. While such investments fluctuate from year to year, virtually all active IDA borrowers have undertaken ongoing projects in education and health which are closely co-ordinated with community providers and other donors. It is important that there is co-ordination and that the projects are monitored.
IDA is the World Bank group's concessional lending window, so to speak. An important message which must be highlighted is that it is a lending opportunity for regimes and countries which are not in a position to deal with their domestic circumstances on their own or in a manner similar to western countries. IDA provides long-term loans without interest to the poorest developing countries. This is a vital component of such aid.
The mission of IDA is to support efficient and effective programmes, reduce poverty and improve the quality of life in its poorest member countries. It helps build the human capital policies of institutions and the physical infrastructure needed to bring about equitable and sustainable growth. IDA's goal is to reduce the disparities across and within countries to bring more people into the mainstream and to promote equitable access to the benefits of development. Thanks to the International Development Association, some 45,000 primary school classrooms were constructed or rehabilitated in African countries, which enabled approximately 1.8 million children to benefit from access to primary education. In Asia, over 6,700 health care facilities were constructed or upgraded and then equipped and staffed to provide basic health care to rural populations.
The social investment fund projects in Latin America reached some 9.5 million beneficiaries. Activities supported by these projects generated almost a million person-months of employment. In Africa, more than five million textbooks, mostly locally developed and produced, were supplied to primary schools.
In India, the national AIDS control project supported the training of 52,500 physicians and 60% of nursing staff in HIV/AIDS management topics. That project is of vital importance given the frightening figures for AIDS world-wide, and particularly in the developing world. It is of great concern to everybody to see the devastation caused across the continent of Africa by HIV and AIDS. It is sobering for us all to contemplate what lies ahead for the World Health Organisation and health ministries in various countries in trying to control the epidemic and to deal with the fall out which has ravaged families and communities. The International Development Association must be part of the fight against HIV and  AIDS in supporting communities trying to cope with this catastrophe.
Improvements are also taking place in many other areas, some of which were damaged by floods. These include Haiti where improvements in the country's devastated power sector have given users access to about 20 hours per day of electricity, contrasting with the previous situation of nearly 18 hours of power blackouts daily. These practical matters are being dealt with by the IDA internationally. I compliment the Minister and the Government on that contribution to such deserving projects world-wide.
Ireland has a proud record in international aid which is recognised around the world. When we debate such matters in the Oireachtas it is often forgotten that there is a far greater input from Irish people which is above and beyond what is provided by Government. I pay public tribute to the many Irish missionaries, doctors, nurses, engineers, civil servants and others from all walks of life who have contributed to development work in the Third World by helping communities in poverty and distress. I am glad to see that commitment is not being diminished in any way. It is great to see so many Irish voluntary workers offering professional services and time for the benefit of oppressed peoples abroad.
Mr. Connor Mr. Connor
Mr. Connor: If only the Government would do half as well.
Mr. Finneran Mr. Finneran
Mr. Finneran: It is only right when we look back at our own terrible past of 150 years ago when the population of the country was devastated by famine. It is something we have never got over in so far as the population has never recovered to the levels of the mid-19th century. Thankfully, however, we have experienced an increase in population in recent times. The island of Ireland has shown a great commitment to international aid, independently of what the Government has done in providing overseas aid.
In discussing such aid, we should not confine ourselves to what is being provided by the Government and State agencies through the Department of Finance. We must recognise the great human contribution that has been made by field workers who are helping communities and individuals in Third World countries stricken by poverty, disease and deprivation. The countries affected are to be found in Africa, Asia and other parts of the globe. I compliment our aid workers abroad. The Minister is also to be complimented on this vital legislation which will provide £20 million in overseas aid. I commend the Bill to the House.
Mr. Connor Mr. Connor
Mr. Connor: This issue is always relevant, especially in a country like this that has had something of a nightmare past having experienced a famine. I welcome the fact that Ireland is again participating in the twelfth replenishment of the International Development Association's fund for the world's poorest and most indebted  countries. I will be disagreeing somewhat with the Minister in what I have to say because I want to set out, to the best of my knowledge, the background to the levels of poverty and underdevelopment in the Third World, as well as the lack of understanding that exists about those conditions.
While many countries have achieved some progress in the fight against poverty in recent decades, the last quarter of a century has seen not a reduction but a vast increase in poverty. More people now live in poverty than at any other time in history, despite what the Minister had to say earlier. Some three billion people on the planet today live on less than $3 a day, while over one billion people live on less than $1 per day. Last October, the world's population reached the six billion mark. More than half the world's population live in poverty and one sixth live in absolute impoverishment.
Globalisation has contributed to an enormous increase in the concentration of wealth and, at the same time, to the growth in poverty, both within nations and world-wide. We often speak positively about globalisation but there is a downside to it. The combined wealth of the three richest individuals in the world is currently more than the combined gross domestic product of the world's 48 poorest countries. That is a shocking figure.
Globalisation has greatly increased the powers of global corporations relative to national Governments. Of the 100 largest economies in the world, over 50 are corporations and not countries. Moreover, increasing debt forces cutbacks in social programmes for the poor with decreased real per capita public spending in the areas of primary health care, basic education and other basic social services in developing countries. Despite this, donor countries are devoting fewer resources to fighting poverty in the developing world. Official development assistance is now at its lowest level for 20 years. We call this donor fatigue. It has now fallen from 0.35% of donor states' combined gross domestic product in 1981 to 0.2% in 1997, the last year for which such figures are available. Yet it is acknowledged that increased financial support from donor countries is absolutely essential in eradicating poverty and getting real and sustainable development under way.
While the Minister did not refer to it in his speech, it is regrettable that there has been no growth in the total amount of overseas development assistance we provide, as a proportion of GDP, although the amount of money provided has risen. We have agreed to work towards the UN target figure of 0.7% of GDP for overseas aid in any one year. This year, however, it will amount to 0.31%, which is less than half the UN target. When the Government took office in 1997 the rate was 0.27%, where it remained approximately in 1998 and 1999, although it has grown to 0.31% this year. We are progressing very slowly towards the UN target but we cannot be proud of that.
 A renewed commitment by all developing partners should be a cornerstone of all ODA policy. This should be stated in Ireland's ODA policy because this country is in a good position to talk to the rest of the world about the philosophy of overseas development assistance. We have a responsibility to talk about building a broader understanding of poverty and the possibility of its eradication and to enter and pursue co-operation among rich and poor countries to reduce world poverty.
We must recognise that the existing gap between rich and poor countries is unacceptable and that it cannot be a permanent feature of the global economy. Innovative approaches to poverty eradication, including the development of real partnerships with developing countries, civil society groups and the private sector, are desperately needed in terms of policy by donor countries and in recipient countries.
ODA policies need to focus much more closely at the issues surrounding poverty and development. They should be considered under a number of broad headings – financing for development, generating employment, gender equality, civil society alliances, debt relief and new partnerships for sustainable development. To reduce inequality between rich and poor and to eradicate untenable levels of absolute poverty in the developing world, political leadership is needed for accountable and transparent resource allocation at national level. The governments in developing countries can make important changes at national level to lift the poor out of poverty. My colleague, Senator Doyle, referred to this aspect.
High levels of military spending often serve to displace social spending on health, education and anti-poverty programmes in low income and developing countries. Developing countries spend $125 billion per year on military forces. This is a shocking figure. South Asia alone spent $60 billion on defence in 1998. This is more than the total annual cost of health and basic nutrition for the poor worldwide. The United Nations Development Programme – UNDP – has called the use of scarce resources for military expenditure the most shocking example of the state's use of power contrary to the interests of poor people and others who may not necessarily be poor.
In 1994, at a meeting of the Organisation for African Unity, African heads of state called for more public spending on social programmes and a one third reduction in military spending across the board on that continent. However, far from the achievement of a one third cut, spending on the military and armaments has increased in almost all the major countries in Africa. These well meaning proclamations will be empty rhetoric unless they are fulfilled.
The volatility of international financial speculation is among the other destabilising factors. Legislators in developed countries can reduce this threat and restore national monetary autonomy by encouraging capital controls, including  national controls on capital in-flows and out-flows. These are particularly devastating to the economies of poor countries. Alternative types of taxation also need to be considered. This is a radical view but there should be levies on currency exchange transactions, referred to as the Tobin taxes, named after Mr. James Tobin, the Canadian economist and Nobel prize winner. Other mechanisms should be considered as a means of reducing the volume of short-term currency speculation transactions and, in turn, providing a resource pool for sustainable development.
The existence of debt and its servicing is a critical factor in the problem of poverty. On the international level, there is a need to address the debt crisis in the poorest countries, although one is given some hope from the outcome of the most recent annual meeting of the World Bank and the IMF in Washington towards the end of last year when major decisions on debt forgiveness were taken. There was also at that time an enlightened statement from the President of the United States, Mr. Bill Clinton. The major contributor to the funds of the World Bank and the IMF is the United States of America.
Much remains to be done. Pressure must be placed on creditors to write off the debts of the poorest countries and to assist other debtor countries in making sustainable development rather than debt repayment their first budgetary priority. For too many poor countries the repayment of debt is an item in their annual budgets demanding much greater resources than spending on social programmes, such as health and education. Transformation of debt relief into poverty reduction is of the utmost importance, but it must be done in a properly structured way so that future investment does not slide into the same abyss of corruption and unaccountability as has so often happened in the past.
The liberalisation of the international economy has hit workers, particularly those who are poorly trained and educated. As each workforce, community and nation seeks to become more competitive, decreasing wages, reductions in the workforce and cut backs on social and environmental overheads are often the case. Unemployment, under-deployment, stagnation and recession then become commonplace in such economies.
The rights of workers is an important area where economic policies, human rights and development meet. Countries as well as international financial institutions and multilateral corporations should ensure conformity with internationally recognised worker rights set out in relevant international conventions, of which there are several. These include freedom of association; the right to organise and bargain collectively for pay; the right to freedom from discrimination; the prohibition on any use or any form of compulsory labour and the right to withhold labour; the right to certain minimum labour standards that take into account differences in development levels among nations, including a minimum age for the  employment of children where the employment of under age children exists; and acceptable conditions at work with respect to minimum wages, hours of work, occupational safety and health in the workplace.
The impact of poverty has not fallen indiscriminately, as other speakers noted. Women, racial and ethnic minorities and indigenous people have been the primary victims. Women are being exploited in export industries in developing countries and have suffered the brunt of cutbacks in public services and support for basic needs. Programmes aimed at increasing access to education and reproductive health services and concentrating on opportunities for women would greatly decrease poverty in society as a whole. A recent study by the British Department of International Development shows that investment in girls is the most effective way to reduce poverty. Even a few years of basic education empowers women to have smaller and healthier families. An educated mother is always more likely to send her children to school and this, in turn, creates a new cycle of education and poverty reduction.
Our ODA policy should be considered in a broader context than only the donation of funds to poor countries. We should have a voice in relation to the whole philosophy of ODA policy. We should never be afraid to speak to other countries about it because Ireland is in a particularly good position to do it. People at grassroots level should be encouraged to organise themselves in strong and independent organisations at village level, in micro-enterprise groups. community development groups, NGOs, religious groups, trade unions and others which have an important role.
We should play a major part in creating a positive environment for NGO development through the creation of legal structures and frameworks that not only support the creation of NGOs but also their participation and interaction in public life. NGOs can play a pivotal role in the common struggle for poverty eradication. For example, instead of closed negotiations with governments and corporate officials, decisions about international economic agreements and loans should require participation by all involved. I send this message to the Government. The NGO community should be involved in our donor programme and the overall thrust of our overseas development programme.
This debate has offered a unique opportunity to address some of the issues related to poverty reduction. We should work to promote aid, debt relief and proper trade terms. An important issue in developing countries is the disparity in trade and trade relations which works to the disadvantage of a poor country when it trades with a wealthy one. We must also inspire people. Instead of the fear of premature death, sickness and grinding poverty, we should offer people the hope of enough food to eat, well nourished children, an equal chance of education and opportunities in a more just world.
Mr. Costello Mr. Costello
 Mr. Costello: I welcome the Bill, although I have reservations about it. It is desirable that a larger sum of money is being sent abroad for development purposes in countries which are in severe need and suffer from poverty, deprivation and a lack of education and basic human rights. However, I am concerned that we, particularly the Government, have not made any attempts in recent years to reach our United Nations target of 0.7% of gross national product for overseas development aid. To make things worse, we are slipping back rather than moving forward. That is astounding given that the Minister for Finance and the Minister for Foreign Affairs agreed to operate on a three year basis for 1999, 2000 and 2001. However, we have only reached 0.3% of our UN target this year, compared to 0.31% of gross national product in 1999. We were moving towards the interim target of 0.45%, but we are now moving away from it.
It is no use saying that gross national product is increasing because the more it increases, the more we should be in a position to meet our targets. The Exchequer is making a greater percentage of profit. However, although it is projected that profits will reach £3 billion to £4 billion this year – it was £2 billion last year – not to mention the profit from the sale of various assets, we are still reneging on our United Nations commitment. I do not know how we can come into the House and blandly present a £20 million contribution to the World Bank through the International Development Association while we are slipping back in our overseas development contribution in terms of gross national product. That anomaly must be addressed, but we have not begun to do so.
I am disappointed with the Government. The march forward began in 1993 but this is the first year of eight years in the 1990s when the percentage of gross national product has gone backwards. Yet this is the first year we have a splendid Exchequer surplus. The Minister should address this issue because it highlights the seriousness of our contribution to eliminating world poverty.
The Minister said the United Nations target for 2015 includes “reducing by half the proportion of people living in extreme poverty, achieving universal primary education in all countries and universal access to reproductive health services, reducing by two thirds the mortality rates of children under five and by three fourths maternal mortality, ensuring full access to primary health care and reversing trends in the loss of environmental resources”. That is pie in the sky in terms of our contribution. We should get our act together and show we are serious about dealing with this issue.
Senator Connor mentioned the Tobin tax and the various national creditors who have been asked to waive tax debts for impoverished countries. We have seen the good work done by Bono and other non-governmental bodies and individuals. They have made as big a contribution as many national entities in their efforts to reduce  world poverty. We should support them and we should set and achieve targets.
We should tell people that this is a country whose citizens went abroad as economic migrants, that we were impoverished and that two million of our people died of famine or related diseases in the mid 19th century. We understand extreme poverty and deprivation in the Third World. We should be a beacon to the emerging world. We can do more, not less, than the best of other countries.
We should direct our economic resurgence towards eliminating poverty abroad as well as at home. It was outrageous to see the figures published by Barnardos and UNICEF yesterday which show that a quarter of the children in this country are living in unacceptable poverty at a time when the Minister for Finance does not know what he will do with his budget surplus. We should target that money at people who need it both here and abroad.
The Labour Party has published legislation which commits it when next in Government, with whatever party it may be in Government, to establish a target of 0.7% of gross national product for overseas development. That will be a statutory commitment. That is the way to do it. The Minister of State must cross the Rubicon and say we are committed to doing something about Third World poverty, the lack of education, huge mortality rates, etc.
I hope the Government responds by saying it will reach its targets and do its bit to ensure Third World poverty is eliminated. Otherwise, we can pick another date out of the sky, such as 2015, knowing there is no commitment at national or global level to reach targets by that date. We must take steps to show what we will deliver each year until we reach our target. The Minister of State did not say anything which shows we are serious about that. It is an outrage that for the first year in eight years we are going backwards in terms of the percentage of our gross national product being spent on overseas development.
Our non-governmental organisations are wonderful and the people are charitable. They make contributions to the Third World on a voluntary basis. However, that is not good enough. The Government holds the purse strings to the surplus tax people pay to the Exchequer as a result of our booming economy. Let us use this to the best advantage and let us ensure that it is used where it is most needed, on a global scene.
In terms of the legislation before us, I have always questioned the manner of operation of the World Bank and its reliability as a facility for channelling funds. Because of our strong links with Third World countries and our strong non-governmental organisations that are working in virtually all of the countries experiencing poverty and famine, we are in a position to do far more than the World Bank. The World Bank has always imposed strictures and operated mechanisms that do not take into account human suffer ing. It is not a suitable channel for the distribution of funds. I am not satisfied that it has got its house sufficiently in order for us to pay out £20 million willy nilly and tell it to get on with it.
The Minister talked about putting in place certain levels of accountability and transparency and ensuring that countries to which money is distributed have a proper governance in place and that they have structures and institutions that can be checked. That is lip service. I would like to see the actual figures. I do not want to see funding distributed to warring factions, put towards military equipment or misused for any purpose. We must ensure that we are able to trace every penny that goes from this country to the Third World through any institution affiliated to any body that is responsible for the dispensing of moneys from this country.
It is important that money sent from this country gets to the people to whom it is directed, that the community on the ground has a say in its distribution and use and that it is not distributed just to deal with media problems but that it has regard for the long term as well. We could and should adopt, so to speak – I do not want to use that word in a pejorative sense – a Third World country be it in Africa or in the Far East, like East Timor, and make ourselves responsible on the international stage for the development of that country. To do that we would have to provide for, on the one hand, capital and current spending abroad for building up the infrastructure in that country and, on the other, have an exchange mechanism where children and adults from the country would come here to be educated, trained and so on. We would twin, so to speak, with a country that is in extreme poverty and in dire need. In that sense we, as a people, would be responsible for its development. We would take on the responsibility at a human level and we would put in place whatever mechanisms and exchange structures are necessary.
It would be a two way process, not just charity going out from the country but a human interaction where we would assist, with our extra resources, the development of that Third World country. We could also link up in a practical and developmental fashion in that citizens of that country could come to Ireland while our own citizens could go to the Third World country for developmental purposes. I would like the Department of Foreign Affairs to examine a model such as that. We send our non-governmental organisations to these countries but why can we not be the equivalent and twin with a country and support it for a period of years? This is an idea that could be sold perhaps to the United Nations. Every country in Europe could do the same and in that sense we could act in consort with the overall development.
I will not oppose this legislation. I am always happy to see money being put aside for developmental purposes abroad. I hope it will be well used by the institution through which we are channelling it and I hope that the Minister will  begin the process of increasing our gross national product percentage that we have agreed with the United Nations. We are not even half way there. It is currently 0.7% and we are only on 0.3%. That has to be done but we will never do it unless we draw the line on a statutory basis and do it within a space of time.
I would like to see a new structure explored where we would be prepared to link up with some Third World country and take responsibility for overseeing all development. Essentially we would be responsible but NGOs from other countries would come under our auspices in a twinned arrangement with a country that is experiencing extreme poverty.
Mr. Cullen Mr. Cullen
Minister of State at the Department of Finance (Mr. Cullen): I thank all the Senators for their contributions. It is always a pleasure to come into the Seanad because when the Members speak they do so from a great depth of knowledge and a deep interest in this particular topic. As Senator Doyle said earlier, we have had a few weeks of dealing with many issues in this area and they have been extremely well teased out here.
I hope it is in order for me to welcome children from a school in my own county, St. Mary's, who happen to be in the House this afternoon. I hope the teachers and the girls find the day in the Oireachtas, both in the Dáil and the Seanad, of interest to them. I am delighted that schools have the foresight in the wider civic sense to bring their students to places like this—
Mr. Costello Mr. Costello
Mr. Costello: That is a good plug, Minister.
Mr. Cullen Mr. Cullen
Mr. Cullen: —so that they can see we do a lot of work, despite what they hear on many occasions.
Mr. Connor Mr. Connor
Mr. Connor: A good plug.
Mr. Cullen Mr. Cullen
Mr. Cullen: There has been a general welcome for the Bill but a number of points were raised by all Senators on the issue of our percentage contribution to overseas aid assistance. I am not suggesting that we should not try to achieve the target of 0.7%. We should, and there is general political agreement on that front, but where we can get hung up on percentages, it is important to point out that in 1992, our contribution was £40 million; eight years later, that contribution is £178 million. The percentage figure has risen. There might be some dispute as to whether we are on the same figure as last year but the 1999 figure represented a 27% increase on the year before. In fairness to us as a nation, we are much more generous and more advanced in the way we do things than many other economically strong European countries. The contribution Irish people make through the various voluntary agencies and the many organised collections that take place here amounts to a phenomenal sum of money which is not included in the 0.31%.
Mr. Connor Mr. Connor
Mr. Connor: Nor should it be.
Mr. Cullen Mr. Cullen
 Mr. Cullen: I am not trying to justify it either but it is important that we acknowledge it because it is unique to Ireland. It is not something that happens in other countries—
Mr. Connor Mr. Connor
Mr. Connor: People are more generous than the Government.
Mr. Cullen Mr. Cullen
Mr. Cullen: —and we should not send out that message.
Mr. Costello Mr. Costello
Mr. Costello: That does not condone the Government's position.
Mr. Cullen Mr. Cullen
Mr. Cullen: I am not suggesting that it does but we should stop beating ourselves over the head and sending out a misconstrued message that—
Mr. Costello Mr. Costello
Mr. Costello: We will just beat the Government over the head, not ourselves.
Mr. Cullen Mr. Cullen
Mr. Cullen: It is important that we do not give the impression that somehow Ireland is not very committed to this issue. We are. All Governments and political parties here have been. With regard to the £20 million of IDA moneys, it was the fact that Ireland led the argument in the context of the £5 million of supplementary money that encouraged other countries to get involved and also bring in supplementary assistance.
To take up another point, the Irish voice is a legitimate one on the world stage on these issues. It is a voice that is listened to and respected. The Irish nation was sending people to the Third World as religious and lay missionaries many years before other countries knew what this was all about. I disagree with the Senator's point about twinning. We have been doing that in a bilateral sense for many years. Ireland has identified key priority countries with which it has increased its involvement in a continuing rolling-out programme which was well planned with them a number of years in advance. This encompasses the points, although not in the specifically structured way suggested by the Senator. It is something Ireland does better than most other countries.
It should be remembered also that the increase in our aid programme over the past number of years has rightly gone mainly into our bilateral relations. Ireland is probably at the top of the league in maximising the benefits of aid to people in the countries in which we operate. It does not negate our involvement in a multilateral sense within the EU in the context of our aid contributions in that forum. That does allow us to have an overview and to speak at fora where we can make the very points made by many Senators who contributed to the debate.
Another hobby-horse of mine which I was glad to hear mentioned, particularly by Senators Joe Doyle and Finneran, relates to good governance. Good governance and tackling corruption in developing countries is crucial. The despotic ruination of nations that has been carried on in continents such as Africa over generations has had an appalling impact on the ability of people who have got so-called freedom from colonial powers  which resulted in an absolute abuse of power by people who purported to be representing the best interests of their countries. This was referred to by many Senators in the context of the arms build-up and the moneys that have been stolen from ordinary people to build up regimes that protected so-called presidents for life to the detriment of the people in those countries.
It is right to put good governance and the removal of corruption at political, corporate, public and private levels at the top of the agenda. I am convinced that, irrespective of the amounts of money and resources we make available to these countries, if the regimes are based on corruption all the money in the world will not solve the difficulties encountered by the people.
The review of IDA money has been specific in terms of targeting. One of the areas at which the IDA has been looking closely and targeting specifically is the problem of HIV and AIDS that is ravaging the Third World today. That is very much a target of the IDA in directing resources to health care and education and in terms of dealing with this crippling issue. Senators may have seen a documentary programme on television on this issue which revealed figures which are frightening. The figures for South Africa are devastating. We are not facing up to that problem and the damage it is doing to the Third World as we should.
I thank Senators for their contributions to this debate. It is always most enjoyable to come to the Seanad. I am pleased with the response and the support we have in passing this Bill.
Question put and agreed to.
Mr. Cregan Mr. Cregan
Acting Chairman (Mr. Cregan): When is it proposed to take Committee Stage?
Mr. Finneran Mr. Finneran
Mr. Finneran: Now.
Agreed to take Committee Stage today.
Bill put through Committee, reported without amendment and passed.
Mr. Finneran Mr. Finneran
Mr. Finneran: It is proposed that the House should suspend until 6 p.m.
Acting Chairman Acting Chairman
Acting Chairman: Is that agreed? Agreed.
Sitting suspended at 3.06 p.m. and resumed at 6 p.m.
Seanad Éireann 163 International Development Association (Amendment) Bill, 1999: Second and Subsequent Stages.