Stephen Donnelly (Wicklow, Independent)
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Question 62: To ask the Tánaiste and Minister for Foreign Affairs and Trade the status of the joint review of Ireland's international debt policy by his Department and the Department of Finance; and if he will provide a statement of current policy on international debt, including the issues of debt cancellation, conditionality and governance reform of the World Bank and IMF. [9940/12]

Joe Costello (Dublin Central, Labour)
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Ireland is recognised internationally for its contribution to the fight against global poverty and hunger and leading role in making international aid more effective. The State has played a strong role in the development of a consensus on the issue of debt cancellation for the least developed countries. All of our aid is provided in the form of grants, not loans. We have contributed our full financial share of more than €116 million to the two main multilateral initiatives to address debt relief. We have also worked with partners in our programme countries to ensure the additional money in debt relief is spent on programmes that benefit the poor.

The Government's debt policy strategy was prepared jointly by the Department of Foreign Affairs and Trade and the Department of Finance and launched in 2002. It supports the total cancellation of the debts of the world's poorest countries. The policy has not changed. In our ongoing review of policy we are surveying the changes in the global situation and the impact to date of debt relief efforts. This work will feed into the current review of the White Paper which I hope to conclude by the autumn.

Debt relief for developing countries and loans from the international financial institutions are often conditional on the implementation of certain macro-economic and development policies. We take the view that all development interventions, including those of the international financial institutions, should be framed explicitly in the context of country ownership, poverty reduction and the achievement of the millennium development goals.

I welcome the ongoing process of reform within the World Bank and the IMF to ensure they can adequately meet the development challenges of a changing world. Ireland has supported the governance reforms of the past two years and the shifts in quotas and voting power in favour of developing and transition countries which have served to increase the legitimacy and democratic representation of the international financial institutions.

Maureen O'Sullivan (Dublin Central, Independent)
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I thank the Ceann Comhairle's office for allowing me to take this question in place of Deputy Stephen Donnelly.

I attended the conference held in Dublin Castle last Friday. Ireland's reputation is second to none, but we could do more. The international financial institutions continue to lend money to countries which they know cannot repay it, knowing such borrowings will push these countries further into poverty. They are knowingly lending to oppressive regimes. The President of the Democratic Republic of Congo built up a debt of US$12.9 billion. Also, the conditions attached to such loans are affecting industry. There has been privatisation and decimation of local industry in a number of the countries in the global south. There continues to be a lack of democratic representation from southern countries at the IMF,as well as a lack of democracy in the leadership selection process at the World Bank. Can Ireland do something to address these two matters?

Joe Costello (Dublin Central, Labour)
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Ireland favours debt cancellation which has been our position since 2002. As stated, the situation is being reviewed jointly by the Departments of Finance and Foreign Affairs and Trade. The Deputy may be aware that a review of the 2006 White Paper is also under way, which review will feed into the consultation process. We would welcome an input from Members of this House into the review of the White Paper which will inform our policy for a number of years.

On the wider question of what has been happening throughout the world, there has been considerable development in dealing with the issues of debt relief and debt cancellation. A heavily indebted poor countries initiative, HIPCI, was launched in 1996 which was followed by the multilateral debt relief initiative, MDRI, in 2005. Some 38 countries have benefited from these initiatives. As part of the MDRI €33.8 billion has been provided, while €76 billion has been provided as part of the HIPCI, amounting to a total more than €110 billion in debt relief. Three countries recently became eligible for debt relief and four others will shortly become eligible. The process, therefore, is ongoing.

Maureen O'Sullivan (Dublin Central, Independent)
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In the meantime more could be done to ease the conditions attached in order that local industries on which people depend will not be decimated. I am sure the Minister of State will agree that human rights must be at the core of all of this work.

Joe Costello (Dublin Central, Labour)
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We do not believe there are any conditions attached. Irish Aid has never been tied. We have always argued this point internationally.

Maureen O'Sullivan (Dublin Central, Independent)
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I was not speaking about Irish Aid-----

Joe Costello (Dublin Central, Labour)
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I am sorry.

Maureen O'Sullivan (Dublin Central, Independent)
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-----rather I was speaking about the conditions of the World Bank and the IMF, in respect of which Ireland could have a role to play.

Joe Costello (Dublin Central, Labour)
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Yes, we do have a role to play in that regard. Reform of the quota system and the manner in which voting takes place at the IMF is under way. The likelihood is that this will result in the Irish voting position, dating back to the old quota system, being considerably improved. A new voting system is being introduced and it is likely that it will provide Ireland with a much stronger role. Likewise, the emerging countries will have a much stronger role under future systems. We will be pursing this matter.