Friday, 16 December 2005
Seanad Eireann Debate
Minister of State at the Department of Foreign Affairs (Mr. Treacy): The Development Banks Bill provides for Ireland’s future membership of the Asian Development Bank, the extension of the activities of the European Bank for Reconstruction and Development, known as the EBRD, to include Mongolia, and amendments to existing legislation governing Ireland’s membership of a number of multilateral financial institutions, to better facilitate Ireland in meeting its obligations to these bodies.
The Asian Development Bank is an important agent for development in that region. When it was established, Ireland was not in a position to join and add our financial support. Today, we seek to join the Asian Development Bank. It is an important element of Ireland’s strategy to join a number of regional development banks, which was recommended to the Government in the 2002 report of the Ireland Aid review committee. Membership of this bank will contribute significantly to Ireland’s bilateral development programme in the region, providing further impetus to the role played by Ireland in supporting economic development and social progress in Asia and, in particular, reducing poverty.
The Asia strategy responds to the need identified for a concerted and strategic approach to the development of trade with Asia. Membership of the ADB was identified as a key objective of the Asia strategy. Into the future, China and other Asian countries will, to a progressively greater degree, influence political and economic developments throughout the world. Ireland’s membership of the ADB will provide an opportunity to strengthen Ireland’s voice and contribution to Asian development. It will confer economic benefits in providing greater opportunities for Irish companies and consultants to tender for various projects funded by the ADB and in helping to develop a greater awareness of business and commercial opportunities in Asia. The Government’s primary motivation, however, is its belief that Ireland should, on foot of the progressive improvements in our national prosperity, deepen and widen our contribution towards helping the less fortunate peoples of the world to improve their different positions.
The Asian Development Bank is a multilateral development finance institution dedicated to reducing poverty in Asia and the Pacific. It aims to improve the quality of people’s lives by providing loans and technical assistance for a broad range of economic and social development activities. It was founded in 1966 to promote social and economic progress in the region and to make loans to more developed member countries at market rates of interest. The ADB is owned by the existing 64 member countries, of which 46 are from the region and 18 are non-regional members, including EU states. It is a well-established and highly-respected development agency fostering progress in the Asia region.
Japan and the United States are co-equally the largest shareholders, each with almost 16% of the bank’s total subscribed capital. I will outline briefly the governance and management structures for the bank. Each member country nominates a governor to the board of governors, often the Minister for Finance, to vote on its behalf. The board of governors meets formally once a year at the ADB’s annual meeting. The members elect the president for a term of five years. Four vice-presidents are appointed by the board of directors on the recommendation of the president.
The board of governors also elects the 12 members of the board of directors. Eight are elected by member countries from within the Asia-Pacific region, and four others are elected by member countries from outside of the region. The board of directors performs its duties full time at the ADB headquarters in Manila and holds formal and executive sessions regularly. Members are arranged in constituencies, headed by one of the 12 directors. Ireland will, after membership, join an existing constituency as part of a group of members from outside Asia. Ireland will not have permanent staff assigned to the ADB.
The scale of the bank’s operations are significant. In 2004, the bank’s loans amounted to $5.3 billion. An excellent and timely example of the work of the Asian Development Bank, as we approach the first anniversary of the Asian tsunami, is its response to this disaster. The bank responded rapidly, moving to assist those countries most directly affected by the disaster, providing assistance of more than $750 million. It established a $600 million Asian tsunami fund and identified $175 million in funding to be redirected from ongoing projects and programmes, bringing the bank’s total financial commitment to $775 million in this sad situation.
Indonesia, the Maldives, Sri Lanka and India requested the ADB’s assistance in their rehabilitation and reconstruction efforts. In these countries, the bank’s assistance packages support disaster management, helping to restore critical infrastructure, such as water supply, sanitation, solid waste management, power, agriculture and fisheries and to rehabilitate and reconstruct roads and railways. Disbursement priority areas include housing reconstruction, microfinance for livelihoods and coastal protection. The support of the bank, together with different national efforts and the work of the international community, has made an enormous contribution to the recovery of these countries which were severely affected by the tsunami.
More recently, the Asian Development Bank is playing a significant role in regard to the earthquake disaster in Pakistan. The bank has already completed a preliminary damage and needs assessment report in association with the World Bank. This estimates that Pakistan needs approximately $5.2 billion to effectively implement a relief, recovery and reconstruction strategy. Of this, $3.5 billion is for the physical reconstruction of housing, schools, health facilities, roads and other public infrastructure.
The Asian Development Bank has already established a special Pakistan earthquake fund with an initial contribution of more than $80 million. This fund is similar to that set up by the bank in response to the tsunami just a year ago. It will pool and promptly deliver emergency grant financing for projects that support immediate reconstruction, urgent rehabilitation and other associated development activities. In addition, the bank has announced that it will provide about $1 billion in concessional support for the rehabilitation and reconstruction of earthquake-hit Pakistan, with a focus on transport, power, health and education, and governance and institution building.
The initial cost to Ireland of entry to the ADB will be in the order of $40 million, or €33 million, depending on the rate of exchange prevailing at the time. This is made up of the following commitments which will be assumed by Ireland: a 12,040 shareholding in the ADB, of which 847 will be paid in capital shares at a cost of $10 million, or some €8.4 million, and 11,193 will be callable shares, this is the shareholding structure required of new members from outside the region; an initial contribution of some $28.046 million, or €23.102 million, to the Asian Development Fund which is a key resource and a major instrument of concessional financing, available for development from the ADB; and an initial contribution of some $2 million, or €1.6 million, to two trust funds operated by the ADB which support specific objectives.
It is proposed that Ireland’s contribution to the bank’s share capital and to the Asian development fund will be paid in equal instalments over four years. A once-off payment will be made into the two trust funds, namely, the governance co-operation fund and the gender and development co-operation fund. The governance co-operation fund supports government-led governance reform activities to improve transparency, accountability, predictability and-or participation. The objective of the gender and development co-operation fund is to promote gender equality and women’s empowerment in the Asia-Pacific region, and to implement programmes and projects to narrow gender gaps in order to meet the millennium development goals. Ireland will also have to give the conventional legal immunities to the ADB which other international agencies have in respect of staff and other matters.
The House will wish to note that at the UN summit in September this year, Ireland recommitted to achieving the UN target of 0.7% of GNP for overseas development assistance by 2012. Given current economic projections, this implies a tripling of Ireland’s ODA above current levels. Fulfilling the financial obligations which membership of the ADB entails will help achieve the objectives set by us for the coming year.
Let me now turn to the European Bank for Reconstruction and Development, of which Ireland was a founder member. The EBRD is a multilateral financial institution established in 1991 following the collapse of communism. It was a response to the recognition that the emerging democratic states in central and eastern European and ex-Soviet republics required significant financial support to nurture their economic development.
The EBRD invests in businesses and financial institutions that underpin the development of market economies in 27 countries of operation, from central Europe to central Asia. In 2004, the EBRD invested some €4.1 billion in 129 different projects. Investments are designed to foster and accelerate the transition to open market-oriented economies and to promote private sector development. The span of operations of the EBRD encompasses some of the less-developed countries in Europe and central Asia.
Mongolia lies in the heart of the Asian continent and has existed for decades as a buffer state between the Soviet Union and China. Amid the collapse of communism and the Soviet Union’s disintegration, Mongolia too underwent rapid change. In January 1992, a new constitution was adopted that renounced socialism and made Mongolia a republic with a parliamentary government and a directly elected President. Mongolia has remained neutral in international affairs. Until 1990, Mongolian economic development had been directed by a series of Soviet-style central plans. Since then, Mongolia’s economy has suffered substantially due to the withdrawal of Soviet aid for development.
At the time of establishment of the EBRD, Mongolia was neither part of the Soviet Union nor a founding member of the bank. Since Mongolia’s needs for assistance are consistent with the needs generally faced by the EBRD’s countries of operations, it was deemed appropriate that Mongolia should become a member of the bank. This took place in October 2000. Since early 2001, the EBRD has been providing technical assistance to Mongolia, using donor funds made available through the Mongolia co-operation fund.
However, the Mongolian authorities considered that the involvement of the bank should not be limited to technical assistance but should also include the financing of specific projects. In July 2003, the Prime Minister of Mongolia formally expressed an interest that Mongolia be granted “country of operation” status. However, being non-European and located outside the territory that the bank’s founders had originally intended for its activities, Mongolia could only become eligible for EBRD financing after an amendment of the agreement establishing the bank at the outset. In January 2004, the board of governors unanimously adopted a resolution establishing an amendment to the agreement establishing the bank in order to admit Mongolia as a “country of operations”. The resolution must, however, be ratified by all members of the bank. Passage of this Bill will enable Ireland to ratify that important resolution.
Ireland is currently a member of several multilateral financial institutions. These are the International Monetary Fund, known as the IMF, the World Bank, the European Bank for Reconstruction and Development, the European Investment Bank and, most recently, the Council of Europe Development Bank. A significant element of this Bill is the proposed amendment to the current legislation governing Ireland’s participation in these international financial institutions. This will allow for future changes in the articles of agreement of those institutions to be approved by resolution of the Dáil Éireann rather than through primary legislation, but only where this is consistent with constitutional requirements.
I will outline briefly the constitutional and legal position. Article 29.5.1° of the Constitution requires that every international agreement to which the State becomes a party shall be laid before Dáil Éireann. However, under Article 29.5.2° the State is not bound by an international agreement involving a charge upon public funds unless the terms of the agreement have been approved by Dáil Éireann. Traditionally, our participation in these organisations and related entities such as the International Development Association has been provided for exclusively by primary legislation thus necessitating the passage of new primary legislation to ratify every and any change in the establishing agreements.
These changes could encompass, for example, the requirement for additional financial contributions or the extension of operations to new member states. Legislation cannot be drafted until the change has been agreed by the members of the bank. There is then significant pressure for the agreed change to take effect immediately or for Ireland to meet agreed financial commitments. The required legislation has, in many cases, been delayed due to other legislative priorities and as a result Ireland has, in some instances, had to seek time extensions or has been unable to make timely payments when required.
Accordingly, this Bill will provide that in future, where appropriate, approval of an international agreement to which Article 29.5.2° of the Constitution applies would be done by way of Dáil resolution in accordance with that provision of the Constitution rather than by way of primary legislation and that the definitions in those existing cases already dealt with by way of primary legislation would be amended to allow any future changes to be approved by resolution of Dáil Éireann. The advice of the Attorney General will be sought on each future amendment to an existing agreement to ensure that it does not require substantive changes in primary legislation, or substantive Irish law, for effective domestic implementation.
I will now turn to the specific provisions of the nine sections of this Bill. Section 1 sets out the definitions used in the Bill. Section 2 provides for the approval of the terms of agreement for membership of the Asian Development Bank. The articles of agreement establishing the Asian Development Bank are set out in a Schedule to the Act. Section 3 sets out the financial and other provisions associated with joining the bank. Section 4 provides for an extension of the definition of “Agreement” in section 1 of the European Bank for Reconstruction and Development Act 1991 to take account of the EBRD’s resolution dated 30 January 2004 providing for the extension of the bank’s activities to Mongolia. In the case of sections 2 and 4 the Bill provides for future changes to the terms of agreement to be approved by resolution of Dáil Éireann and for publication in Iris Oifigiúil of notice of any such approval. Sections 5 to 8, inclusive, amend the Bretton Woods Agreements Act 1957, the International Development Association Act 1960, the Multilateral Investment Guarantee Agency Act 1988 and the Council of Europe Development Bank Act 2004 in a similar fashion.
The Bill will allow Ireland play a much more significant role in supporting Asian development through membership of the ADB and the extension of the EBRD activities to Mongolia and facilitate meeting Ireland’s international obligations in a timely fashion fully consistent with our constitutional Oireachtas requirements. This will be critical in enabling us to provide our contribution to debt relief in Africa, in line with the World Bank’s multilateral debt relief initiative, which builds on the proposals that emerged from the G8 Summit in Gleneagles. It also contributes in an important way to the delivery of the Government’s objective of increasing Ireland’s overseas development assistance towards the UN target. I commend the Bill to the House for approval.
I have no particular issues with what is contained in this Bill and Fine Gael will not be opposing it in any way. It is appropriate and consistent with Government policy over a long period that we should join as many development banks as we can. The Minister of State outlined the development banks of which we are a part. The Bill is a logical progression and the next step in that development area.
The entry cost involved of €33 million spread over four years is not a huge sum of money and neither the Opposition nor, I am sure, the Government would have a problem with that. Furthermore, I have no problem with the €1.6 million due to be paid into the two trust funds. The idea of the two trust funds, as announced and expanded on by the Minister of State, are two areas where we should seek to develop new initiatives as in this case in the Asian continent but also throughout the rest of the world. Of the total, the contribution of more than €23 million is to be made to the Asian development fund. The Minister of State outlined the natural disasters and events that have occurred in that continent during the past 12 months. The contribution of €23 million to that fund is to be welcomed.
The Minister of State referred to our contribution to overseas development aid and the Government’s new target. While it is not satisfactory that the target was changed, we must strive to ensure that the target now in place is met. Fine Gael is committed to fulfilling that commitment as soon as possible.
The Minister referred to the establishment of the Asian Development Bank, that it is owned by 63 members and was established in 1966. From an Irish perspective, it is obvious that we were not in a position in 1956 to be a part of or among the founding members of that bank. However, when one considers the economic miracle that has taken place here during the past 40 years, it is fitting that we should now become a member. When one considers the numerous campaigns that have taken place during recent years such as Drop the Debt campaign and the Live Aid campaign which took place last year, it is fitting at this juncture that we would seek to become part of it. The bank is involved in 19 residential missions, which support its objective of reducing poverty by strengthening representation in its regional and non-regional members and providing broader and more direct access to its constituencies.
When I was doing some research on this matter, I learned that the former Soviet republic of Kazakhstan has made significant progress in poverty reduction over recent years. The percentage of people in that country who live below the poverty line has decreased to 15%. It was considerably higher than that a couple of years ago, but the position has changed on foot of the support offered by the Asian Development Bank and other development agencies. We should seek to assist any body that is helping in such a meaningful way to improve the lives of people who are affected by poverty.
The Bill highlights the general issue of development. Not only should Ireland make a commitment to economic liberalisation, it should also make a concerted effort to bring about a revolution in how developing countries are treated. We need to ensure that the benefits of global trade are spread more evenly throughout the world. The Bill before the House will contribute positively in that regard.
As I have said, the recent Drop the Debt and Make Poverty History campaigns, which received a significant level of support in this country, highlighted the depth of feeling in Ireland and other countries about the need to play an active part in ensuring that the lives and conditions of people who are less fortunate than ourselves — on the continent of Asia in this case — are improved as a result of our financial contributions. Ireland is in a unique position in that regard, as I have said previously. Many people would argue that there were never really that many poor people in this country. We have a unique perspective on the development of Ireland between the Famine and the Celtic tiger era. This country experienced the complete spectrum of relative poverty, or actual poverty, over those years. Ireland’s contribution to the Asian Development Bank is an important one for that reason.
I do not intend to propose any amendments to this Bill, the general objectives and purpose of which are quite laudable and admirable. Fine Gael will ensure its speedy passage through the House this morning.
Dr. Mansergh: I welcome the Minister of State, Deputy Treacy, and his officials to the House. I warmly welcome the Development Banks Bill 2005. I do not think Senator John Paul Phelan should doubt that there was mass poverty in this country historically. It was a very serious problem 40 or 50 years ago. We did not worry about relative poverty in those days because it was a question of absolute poverty.
Dr. Mansergh: We have gone beyond that, thankfully. I welcome the comprehensive background detail that the Minister of State has given the House. He reminded the House that when the Asian Development Bank was established “Ireland was not in a position to join and put in our financial support”. Ireland would have liked to have contributed to many of the international efforts which were made 20 or 30 years ago, but the Governments of the time did not consider that the country was in a position to afford to do so.
This legislation needs to be considered in the context of the substantial expansion of the Irish development aid programme. The multilateral element of that programme, which is primarily administered by the Department of Finance, has always been a significant, if less noticed, aspect of it. It is also dealt with by the World Bank and various other regional banks like the Asian Development Bank. It is important that Ireland, like other countries, is pulling its weight fully by contributing to such banks, especially now that it has a per capita income that, by any standards, places it among the wealthiest countries in the world. The Minister of State made it clear that Ireland is participating in this process for a mixture of reasons. It is clear that we are developing our economic links with Asia as part of the Asia strategy. While it is important that we assist poor countries to develop, we can also compete for contracts, etc., and thereby deepen our involvement in what is easily the most rapidly developing part of the world.
It has been made clear to us over the past 12 months in a particularly forcible manner that Asia is one of the regions of the world that is most prone to natural disasters. The tsunami that affected many coastal regions of Asia very badly just after last Christmas was followed this year by the aftermath of the earthquake in Kashmir. It is clear that it makes sense for Ireland to support the Asian Development Bank at this time, so that it can assist and co-operate with those who are dealing with some of the most acute problems in the world. It has been mentioned that €8.4 million will be allocated to the bank over some years. That is by no means an exorbitant contribution, particularly in light of this country’s expanding budget. When one’s budget is increasing, there is a danger that one will start to spend money on things which are very much less than ideal. We can be assured that the expenditure of the money we are providing in this instance will be well vetted and supervised by the institution to which we are contributing under this Bill.
Mongolia is one of the countries that is being assisted by the European Union’s outreach to parts of the former Soviet Union which are adjacent to Russia. Such regions are in something of a limbo in organisational terms. When one thinks of Mongolia, one tends to think of horses galloping across the plains. One occasionally hears in political debate that a certain Minister — no name needs to be provided — is to the right of Genghis Khan. We should bear in mind that the Great Mogul, who came from Mongolia, was one of the great contributors to Indian civilisation, so we are talking about civilisation as well.
The delegation of authority is correct. Debates like this are useful from time to time to bring us up to date with developments in this area, such as the various bodies to which this country contributes. I suggest that resolutions on such matters should not be taken in the House without debate — they should be debated so that Senators can focus on the multilateral contributions being made through the Department of Finance.
I enormously welcome the Government’s real commitment, as shown in the recent budget, to increasing its level of overseas development aid. A great deal of progress has been made over the past 30 years in this regard. As I recall, in 1992 the level had fallen to 0.16% of GNP which was roughly at the level of the United States which usually comes at the bottom of the list. It then rose to somewhere between 0.25% and 0.3% in the late 1990s. For most of the term of this Government it has been running at 0.4%. This year it will be 0.47% and next year it will be 0.5%.
The difference between now and earlier times — I hope my friends and former colleagues in the Department of Finance will not be offended by this — is that the Department and Minister for Finance seem to be fully on board on this occasion, which is vital. It is not enough for the Minister for Foreign Affairs or even the Minister for Foreign Affairs and the Taoiseach to be fully on board. On this occasion the Minister for Finance has come from being Minister for Foreign Affairs so he has first-hand experience of this programme to a greater extent than some of his predecessors may have had. I have a real confidence this time that the commitment will be adhered to and that is very important.
I wish to make one other point on the delegation. I just had a little smile, because of the legislative difficulties we have had to seek a time extension as we were unable to make timely repayments when required. This, of course, has been the besetting sin of the United States vis-à-vis the United Nations and certain other bodies. Certainly it would be good if we became members of the prompt payment category.
I will conclude on a matter discussed at the Joint Committee on Finance and the Public Service. Part of the decentralisation programme involves the development aid division of the Department of Foreign Affairs being located in Limerick. It has been pointed that there has not been a significant number of volunteers. I did express some little surprise that people, I speak as an ex-Department official, are happy to be posted to Lagos, Lesotho and Lusaka but not to that exceptional hardship post of Limerick. I appeal to officials to look at the issue again. This is a relatively compact country and with all due respect Limerick, is not Outer Mongolia. The Government has made clear financial commitments in this area. I do not think there is any danger with the division being located in Limerick that somehow or other the case for funds will go by the board. There is no merit in that argument.
Mr. Hanafin: I warmly welcome the Minister of State to the House. This Bill gives us an opportunity to discuss wider issues in connection with overseas development aid. If there is something we have learned it is that when you give, you receive. Aid works. After the Second World War much of industry in western Europe was devastate, people were displaced, economies and cities lay in ruins and the American plan, the Marshall plan, allowed a regeneration of the economies, society and democracies. I am pleased that we have seen the European Community develop and extend that practice. Eastern Germany, which immediately comes to mind, is being developed by western Germany with the aid of EU funding. Eastern Europe has given us wonderful opportunities by providing many of the migrant workers we badly need here who are working hard. They are a fine example and are so welcome. It is our contribution to the European Bank for Reconstruction and Development, and the different development banks, including the Bretton Woods Agreement, that allows us to play our role. Ireland plays a personal role because the Irish are generous. We have seen this in our response to the tsunami and to the pain and suffering caused by famine. Some of the leading figures in this regard were Irish, such as Bob Geldof, Bono and the thousands of missionaries who gave of their lives for others. That is a fine example of Ireland’s response.
We also have a fine political tradition. In a sense between the personal, the institutional and the political we are seeing the culmination of the vision of John Cardinal Newman who, more than 100 years ago, spoke about how he saw land. He saw land as a bridge between the less well-off and the well-off. He knew in his vision where Ireland would lie. I am proud that we are becoming that vision. We have never been colonists but we know poverty and we have experienced hardship.
In the early 1960s Ireland was a very different place from the Ireland of today. Our demographics were skewed and young people were leaving the country in their hundreds of thousands. It was a country where there were many elderly and many young people. There was not the economy that we know today. It was certainly less developed and, in a sense, it was hardly a self-sufficient economy. However, we grew that economy and opened up to world markets. We have a role to play in showing and helping others to get to where we are. We can thank people such as Lemass, the Civil Service and Ken Whitaker who played such an important role in bringing Ireland to where it is today.
Institutions such as the Institute of Public Administration which educates and develops the public service will have a role in the future. Many of the countries we are aiding and will aid have difficulties in terms of corruption and the way they see things. They could benefit from coming here and learning from our fine Civil Service which has done so much to develop our country.
The Bill provides for aid to Mongolia. All politics is local. Within the past month I met the Mongolian ambassador in London. I was happy to bring him to this House and to have brought him and a delegation to the Joint Committee on Enterprise and Small Business. Mongolia is not that far away. Senator Mansergh mentioned the great tradition in parts of Mongolia. The Mongolian Empire was the largest empire the world had ever seen and extended into China. Mongolia is referred to in that great poem by Samuel Taylor Coleridge, Kubla Khan, “In Xanadu did Kubla Khan a stately pleasure-dome decree”. There, Mongolians had built their palaces and had a fine culture, which went on to develop in India, China and other parts of the world.
Mr. Hanafin: I welcome the fact that this Bill will facilitate Ireland in meeting its international obligations with regard to membership of international financial institutions. It will support the delivery of the Government’s overseas development assistance strategy, including the policy of attaining the UN target for assistance of 0.7% of GNP by 2012.
The Bill provides for Ireland’s membership of the Asian Development Bank, a multilateral development finance institution, dedicated to reducing poverty in Asia and the Pacific; the extension of the activities of the European Bank for Reconstruction and Development to include Mongolia; and amends existing legislation governing Ireland’s membership of a number of multilateral financial institutions, to allow for changes to administrative and financial arrangements by Dáil resolution rather than primary legislation. Membership of the Asian Development Bank is identified as an objective in the Asia strategy and Ireland has long wished to participate in the work of the bank in that region.
Mr. Kitt: I welcome my colleague from Galway, Deputy Treacy, to the House and also welcome the Development Banks Bill. I am delighted that we are now providing for membership of the Asian Development Bank and including Mongolia under the remit of the European Bank for Reconstruction and Development. There are very serious issues here regarding our commitment to meeting the target of 0.7% of GNP by 2012.
I am fortunate to chair the Oireachtas sub-committee of the Joint Committee on Foreign Affairs, which deals with overseas development aid. For many years, that committee has been dealing with the overseas aid issue, particularly concerning Africa. The committee, and indeed all Members of the Houses, were delighted that the Taoiseach announced our development aid targets in New York last September. He gave very specific targets for 2007, 2010 and 2012, which put Ireland in the top rank of donors worldwide. Most developing countries particularly welcome the fact that our aid is not tied aid, as is the case with many Western countries, some of which are more prosperous than Ireland. According to the OECD, Ireland’s official aid programme is at the cutting edge of international development policy, particularly because the aid is not tied. There are challenges ahead but I hope we will always have quality aid. The committee has travelled to Africa to see at first hand some of the development programmes there. Our focus has been on Africa and in particular, on Ethiopia and Tanzania. I hope we will be able to further the UN millennium development goals because development is urgently needed.
The Government has now chosen two new programme countries in Asia, East Timor and Vietnam. This is very welcome and demonstrates how the programme has diversified. Ireland’s experience of being a donor and its own development means that we have much to share with one of the world’s newest countries, Timor-Leste. Membership of the Asian Development Bank will add another strand to Ireland’s co-operation with the developing countries of Asia. The bank aims to promote social and economic progress in the Asian and Pacific regions and its development fund is particularly attractive. It lends at favourable rates to member countries with low per capita GNP, including Vietnam, Bangladesh, Pakistan, Sri Lanka and Nepal. Ireland’s participation in that fund will allow it to contribute to economic and social development in these countries and to enhance its understanding of their policies and needs.
I welcome the fact that a specific contribution is proposed for the bank’s gender and development co-operation fund. Given that women constitute a majority of the poor and still experience low rates of literacy and high rates of maternal mortality in some countries, a special effort to promote the empowerment of women is welcome. Senator Mooney and I attended a conference on Africa in London during November and female empowerment was one of the issues raised there. It was interesting to note that in Rwanda, for example, almost half of the members of Parliament are women. This is an area of development focused on by the Asian Development Bank, in terms of its fund and its policy.
The governance co-operation fund is also a welcome and far-sighted project which aims to improve transparency, accountability and predictability in the administrations of the participating countries. This is very much in line with the emphasis on good governance in the Taoiseach’s address to the Millennium Review Summit in New York in September. While this fund is good news, many issues have been raised regarding alleged corruption in some countries, particularly in Africa. Mr. John O’Shea of GOAL, has highlighted problems in this area, with specific reference to Uganda, Tanzania and Ethiopia. He has raised serious concerns about democracy and human rights in these countries and has referred to a book written by Mr. Martin Meredith, entitled The State of Africa: A History of Fifty Years of Independence. That book vividly describes corruption in African society. This has serious implications for Ireland because it is increasing its development aid budget enormously between now and 2012. Corruption has implications for where the development funding is directed. I am not one to argue that we should do nothing to assist a country because of corruption. However, as a member of the Oireachtas Joint Committee on Foreign Affairs and a Member of this House, it behoves me to put on record that Ireland must look at issues that are not being addressed by certain African leaders, particularly in the countries just mentioned.
Africa has great potential for economic development but has been stunted by the predatory politics of certain elites, those who are in politics for personal gain. Such elites often precipitate violence against their own people for their own ends. The Nigerian academic, Claude Ake, in an essay on democracy and development in Africa argued that the problem was not so much that development has failed but that it was never really on the agenda in the first place. That sums up the style of certain leaders in some countries. While I put these concerns on record, they in no way take from what we have done in the past and plan to do in the future. I welcome the inclusion of countries in Asia in Ireland’s aid programme and believe our objective of meeting the UN target of 0.7% of GNP will be furthered by the passing of this Bill.
Mr. Mooney: I welcome the Minister of State to the House. It is significant, given the time of year, that Ireland is once again showing it is prepared to spread its prosperity to more disadvantaged areas of the world. Our decision to become part of the Asian Development Bank raises political issues regarding the various programmes in which it has been involved.
Ireland has taken a strong position on the anti-democratic nature of Burma, which the military junta refers to as Myanmar. I hope that Ireland’s participation will give it a stronger voice to ensure democracy returns to that unfortunate country. It seems in light of recent developments that the military junta wishes to tighten its grip on power, despite indulging in a sham form of democracy to offset criticism from the international community. At this time of year we should remember that Aung San Suu Kyi, who was given the freedom of this city and has received numerous international awards for her courageous humanitarian work, has in recent weeks been put under extended house arrest, which is a gross violation of human rights. I hope the Minister will tell the House what, if any, influence Ireland can bring to bear as a result of its membership of the Asian Development Bank, because we will be putting Irish taxpayers’ money into this region.
I wish to deal with a hot potato arising from our move to the forefront of Asian affairs. While Ireland fully supports the one China policy I have often said that the island of Taiwan, despite being written off the political map, will not go away. It is the tenth largest economy in the world and its people live in a fully-fledged democracy while mainland China is far from being a democracy and seems to lack the stomach for the type of democracy we enjoy, despite the best efforts of the international community. Its violation of human rights is widely known. The Minister, the Taoiseach and the Government have taken every opportunity to tell the Chinese leadership that its human rights record is unacceptable. I do not raise the matter to change the status of Taiwan but it is ironic that joining the development bank will open up trade opportunities for Irish companies. Taiwan is not recognised by the international community which is a bizarre state of affairs.
If recent reports are to be believed Hong Kong may find itself a fully-fledged separate democracy within the Chinese family in the next ten to 15 years. I hope this will lead to a rapprochement between Taiwan and mainland China. With our membership of the development bank the Government has a role to play.
I also endorse what my colleague Senator Kitt said about gender in governance. The emphasis on gender outlined by the Minister of State is to be welcomed, as is the Government’s proactive approach. This is particulary relevant in Asia where most of the countries we will be assisting are overwhelmingly Muslim where, despite protests to the contrary, the status of women is at best questionable, particularly for those who wish to enter the political arena. At best it is frowned upon and at worst forbidden. I hope the Government continues to be proactive and welcomes the fact that such a policy is included in the overall thrust of our membership and engagement.
Senator Kitt is also correct about governance. We have discussed governance as it applies to Africa, specifically to Uganda where a large amount of money from the ODA fund goes directly to the Ugandan exchequer. The Government stated that its engagement with Ugandan Government was acceptable and I take it at its word but, like Taiwan, John O’Shea will not go away. He regularly supplies Members of both Houses with information about corrupt practices which require scrutiny.
Mr. Lydon: I listened to Senator Mooney on the monitor in my office, as is my wont when important debates are taking place. I was impressed by what he said about Taiwan and wish to support him in the context of this Bill. People in Taiwan can practise banking freely, in a good capitalist sense, and can practise one religion. Taiwan does not sterilise people or force them to have abortions as mainland China does, nor does it lock up priests or operate a one child policy, among other things. When the fight against communism raged after the last war Chiang Kai-shek was lauded and supported by all the Western powers but his country is now abandoned because it stood with the West. Senator Mooney’s comments should be applauded and I join with him in hoping Taiwan is recognised by being allowed to join the World Health Organisation and other organisations to which it is willing to contribute millions of dollars but is continually blocked by its great master across the straits.
Minister of State at the Department of Foreign Affairs (Mr. Treacy): I thank Senators for their wide-ranging and interesting comments on this Bill. Members of Seanad Éireann have shown consistent and genuine concern for the affairs of the less well-off countries of the world and, on behalf of the Government, I fully acknowledge their contribution. I thank them for their contributions, sincerity and collective and individual support for and commitment to the development aid programme and democracy across the world.
Senator Lydon and Senator Mooney mentioned Taiwan. Ireland has consistently pursued a one China policy; the Taoiseach, the Minister for Foreign Affairs, the Minister of State at the Department of Foreign Affairs, Deputy Conor Lenihan and their predecessors have raised the issue of human rights with the highest levels of the Chinese leadership. Obviously there is progress and change in China, and Taiwan is also making its contribution. I have had bilateral discussions on this issue recently and we are keeping a close eye on that situation. Bilateral improvements can be made between Taiwan and China in the future which will make a major contribution not alone to that region but to the greater world. We must be measured and careful about this in order to ensure democracy is supported and evolves in a broad macro-sense in the interests of individual citizens and of the people of the region.
With regard to Aung San Suu Kyi, I addressed an international conference on behalf of Ireland last April in Jakarta. I led the campaign at that conference, which was represented by most of the democratic countries of the world, in a very strong manner, to give full freedom and release to Aung San Suu Kyi. We deplore the situation that prevails. I have a close personal interest in that area because my wife’s late uncle who was a Columban priest in Burma was shot and wounded there and incarcerated for three years. During all that time, neither his family nor his order knew where he was. Accordingly I have since followed the situation in Burma with great interest. Regrettably, the man has since passed to his eternal reward, but as Senator Hanafin said, he and his colleagues made a major contribution on behalf of Ireland as missionaries, educationalists and leaders across the world. They also made a major contribution to democracy.
My colleague, the Minister for Foreign Affairs, Deputy Dermot Ahern, raised this issue on the tenth anniversary of the Aung San Suu Kyi detention on 24 October last. The Minister of State, Deputy Conor Lenihan, has had a number of meetings on the issue with various people from Burma and other areas. We will continue to raise the situation and give it the highest profile possible until equity and full mobility prevail for this outstanding person, a Nobel prizewinner who is making a major contribution in that area and should be given the freedom to make an even greater contribution in the future. If Senators have questions on any other issue I will be delighted to respond.
We have benefited from the total contribution made to the economic and social development of Ireland by international development institutions. It is now time for us to acknowledge that past support and, as we have become wealthier, to show our support for other states and their development as they grapple with their problems. In joining the Asian Development Bank we are acknowledging our commitment to the less well off in the developing world. I thank all Senators for giving this Bill their speedy attention today.
Earlier this week, the Minister for Finance, Deputy Cowen, on behalf of the Government, announced that in discussions held last week at the World Bank in Washington on the funding of the multilateral debt relief initiative, MDRI, which is aimed at cancelling debts mainly in Africa, Ireland promised to give the World Bank some €59 million towards meeting the cost of this initiative. This additional funding, which will increase our overseas development aid spending for 2006, is to help meet the costs of the cancellation of existing debts due to the International Development Association, IDA, under the MDRI process.
These debts to be cancelled relate to some of the world’s poorest countries. The Minister for Finance said that Ireland, a long-time supporter of debt relief and of the World Bank’s IDA loans and grants programme, would make this funding available upfront to help the World Bank proceed with this initiative immediately. Senators are probably aware that as a result of the decisions in Gleneagles, we have 40 years to make that contribution of nearly €60 million, but we are making a once-off total payment of more than €59 million. That shows our commitment as a Government and a nation to the multilateral debt relief initiative. Other states may pay for this debt cancellation over a much longer period in smaller instalments but subject to approval by the Oireachtas, Ireland is prepared to make its full contribution to the debt cancellation costs available during 2006 to help the World Bank make the many early adjustments needed to go ahead with this initiative.
Some time ago we gave a commitment to reach an aid figure of 0.7% of GNP. We made the commitment in an open, public, international, genuine and sincere manner, with regard to our GNP at that time. As our economy since grew — a credit to the Government’s management of the country and to the people of Ireland — the figure was a moving target, and our commitment was for the position as it stood at the time. We are now exceeding the baseline figure set then. We can be proud of that major contribution and commitment.
The early delivery of money by Ireland to provide upfront financing was especially welcomed at the meeting by the president of the World Bank, Mr. Paul Wolfowitz of the USA, as being helpful in driving the debt cancellation process forward. The World Bank is now likely to take formal decisions to go ahead with debt cancellation in early January. In his speech at the annual meetings of the World Bank and the IMF earlier this year, the Minister for Finance promised that Ireland would do all it could to assist with debt cancellation. This new money helps to deliver on that commitment.
I thank all Senators for their interesting contributions and indeed for the cross-party support. I thank Senator John Paul Phelan for his support on behalf of his party. It was encouraging to see that all sides of this House are committed to development issues. I commend Senators for their contributions and I commend the Bill to the House.
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