Mr. Michael Meacher (Oldham, West and Royton) (Lab): I welcome my right hon. Friend's opening speech, which was excellent, spoken with passion and eloquence and, if I may say so, on the back of a good ministerial track record. I must however add that the congratulatory, nodding consensus across the Floor of the House on this subject is beginning to turn my stomach. I shall want to make some critical comments, but I believe that Gleneagles is a defining moment for this Government. There are a few rare occasions that expose the moral tenor of our times, and the Africa/climate change G8 may turn out, in the breadth of its positive vision, to be one of them. Given the sheer scale of what is being attempted and given that the British Government have been the prime impetus and driver behind the whole project, it must be said that if this can succeed, it will be one of the most important achievements—perhaps the most important achievement—of the Labour Government so far.
Securing international agreement on wiping out multilateral debt owed to the World Bank and the International Monetary Fund for 18 of the world's poorest countries, relieving them immediately of £22 billion of debt—a sum that might well be increased to about £28 billion in the next 12 to 18 months with the inclusion of a further nine very poor countries—is unquestionably a huge achievement. The significance of the deal is that dirt-poor countries such as Mozambique, Ethiopia, Tanzania and Zambia, which are now obliged to spend more each year on servicing the debt by paying the interest than on their entire health or education budgets, will now at last have a chance to begin the fight to escape extreme poverty.
The United Nations Development Programme report of a few weeks ago projected that on current trends—that is, before the current deal—there would be 5 million deaths of babies and infants under five in Africa over the next decade. That figure will now be significantly cut as a result of the deal—though, of course, not by enough. I believe that the doubling of aid from $50 billion to about $100 billion a year is still needed in addition. Earlier in the debate, there was some question about the purpose of aid. I believe that its purpose is to build roads and infrastructure, and to put in place the health, education, training and other public services that are necessary for decent welfare and the economic take-off that the private sector will never provide on its own.
I know that President Bush is saying a bit more today, but the current US offer of $675 million is paltry compared with the extent of need. The US economy is worth $10 trillion; the US spends $400 billion every year on defence, but its aid budget is only 0.16 per cent. of GDP. It is the meanest of all the rich nations, but the Bush Administration are saying in effect that, for Africa, the US can afford an extra amount equal to only 0.08 per cent. of its annual defence budget. The Africa Commission states in its excellent report that that is just one ninth of the absolute minimum that is necessary. The trouble is that the US never took much interest in Africa—at least until the 1990s, when oil was discovered off the west coast.
Quite rightly, much has been made of corrupt governance in Africa, and that dreadful problem needs to be tackled. It is used as an excuse to withhold aid, but helpful precedents have been agreed by NEPAD and some African Governments that would allow aid expenditure to be monitored and audited by independent agencies. That is a step forward. Moreover, the oil and mining industries that are notorious for bribing Government officials are now subject to transparency guidelines. Again, though, those guidelines must have force and they must be statutory.
The corrupt Governments in Africa are bad, but they are not the only ones at fault. We must not be blind to the fact that western practices are also reprehensible in some respects. All too often, tied aid is used as a form of subsidy for commercial exports. In addition, the US in particular often directs aid as a means of helping military allies such as Israel, and not as a way of relieving poverty. The ActionAid report released last month stated that 40 per cent. of global aid goes on over-priced assistance from international consultants. I know that my right hon. Friend the Secretary of State has challenged that, but the figure is certainly substantial. So when we hear members of the free-trade right scorn Africa's aid junkies, we must ask exactly who those aid junkies are, and who profits so handsomely from the global aid system.
Considerable advances in aid and debt relief have been made in the run-up to the G8 meeting, but they pale into insignificance when compared with the fundamental goal—to transform the profoundly unjust and discriminatory international trading system that impoverished the developing countries in the first place. We have always demanded free trade from those countries, so that their markets could be opened up to our multinational corporations, but we do not always reciprocate. We do not practise unfettered free trade, as we limit access to our markets by means of quotas, high tariffs, so-called voluntary agreements and a host of other restrictions whenever our domestic industries come under pressure.
If we are honest, we must admit that the west does not really believe in free trade. What we really believe in is safeguarding our economic dominance at all costs. Nearly all the aid, loan and debt-relief packages put together by the World Bank and the IMF are predicated on liberalisation conditionalities. Before they can receive aid, developing countries are required to agree to dismantle tariff barriers, open up to foreign investment, privatise state-owned companies, reduce public services and hold down wages.
Now we are at it again. Paragraph 2 of the pre-G8 Finance Ministers' statement says that to qualify for debt relief developing countries must
"boost private sector development"
and eliminate
"impediments to private investment, both domestic and foreign."
To take just one example among many, that means that Uganda will have to sell off its water supplies, its agricultural services and its commercial bank, all with minimum regulation.
I do not especially like that policy, but if it worked, a good case could be made for it. But it does not work. According to the World Bank's figures, in its recent report, across the 20 years from 1960 to 1980, before it and the IMF started introducing strict conditions on countries that accepted their loans, median annual growth in developing countries was 2.5 per cent. a year. In the 18 years from 1980 to 1998, it was zero or 0.0 per cent. precisely. Trade is the best route out of poverty, as we can all agree, but not if it is fixed to keep developing countries in subjection as mere suppliers of commodities at rock-bottom prices with severely limited access to western markets. Yes, we should cancel the debt, but we should cancel it unconditionally. We also conveniently forget that all countries that have achieved economic take-off have done so behind high protective walls, and I hope that we will consider that for Africa, too.
