Brendan Ryan (Labour)

While I do not want to be contentious, I am slow to say I welcome the Bill. This is not because of what the IDA does or because it attempts to improve conditions for private business. Recently, I was intrigued to see a quote attributed to Milton Friedman who said that when the poor countries of eastern Europe approached him after their liberation from communism, they asked him what was the first thing they should do. He said they should privatise, privatise, privatise but more recently has concluded that he was wrong. According to Milton Friedman, he should have told them to establish a proper legal framework and the rule of law before they privatised anything. If anything has been driven home to me in various political campaigns outside these Houses, as a member of various Oireachtas committees and a few Oireachtas delegations and in attending conferences, it is that political structure is nearly as important as aid in facilitating development.

I hope the Chinese experiment does not collapse in tears so to speak because of absence of an accountable political structure. Nobody would wish for anything other than that the current extraordinary transformation of China, with all of its negatives, would be a success. The spectacle of 1.25 billion or 1.3 billion people moving from abysmal poverty to an experience resembling a decent life would be an extraordinary achievement, as is the spectacle of India with a population of close to 1 billion people moving in the same direction.

I am somewhat impatient with politicians of whatever hue who view the development of countries like China and India, and particularly the opening up of their vast labour markets, as a threat. The prosperity of 2.5 billion people is no threat to anybody, although it may pose an environmental threat. If one wants to be self-interested, one need only reflect on the scale of the markets that would open up by the transition of a population of 2.5 billion into people who have the capacity to consume, irrespective of what jobs move from one part of the planet to another.

There was a myth at one stage that Japan was threatening the prosperity of the United States in the 1960s and 1970s and there was a bit of a wobble. The result was that one country stayed prosperous and another became prosperous. There is an element of that currently happening in the European Union. There are suggestions that our success is at the expense of others. I am sure there are specific examples where that is true.

The wonderful thing about good development is that it is a win-win game. There are changes in economies because of competitive forces, but there is no collapse of one country because of what people in another country do. There is no reason for that. Countries overwhelmingly fail economically because of a failure or an absence of governance within the country, not because of what other people do to them.

I am a little reluctant to support the Bill because while I fully subscribe to the need for good governance and believe the IDA and the World Bank have belatedly endorsed this, they were forever willing to dictate policies to governments. There is also the shameful record of structural adjustment policies, which the World Bank and the IMF would now have us believe they never meant to impose. These were extraordinary policies where they demanded cuts in public expenditure but neglected to notice that it was health, education and other services that were being cut while the arms budget in many cases exploded — that is perhaps a bad pun, but that is what happened. The pet projects of tyrants expanded while there were cuts in public expenditure. Apparently these institutions seemed to believe that one could destroy primary education and basic services aimed at reducing the incidence of infant mortality and still develop a country. The fact is it has taken a long time and the work of numerous NGOs to address the effects of these policies.

Governments like a succession of Irish Governments have always been progressive in their policies in this regard. I could argue about the volume of aid, but Irish policy on development aid has been universally progressive. I could also argue about the details. However, there has been a view all along that while we can argue about the quantity of Irish aid, and I would make colourful comments about Governments that are reluctant to continue to increase their allocation of aid, the quality of our aid is a symbol of good practice to the rest of the world.

When I spoke during the debate on Private Members' business on the European Presidency, I said that we should never forget that we can do things very well here when we trust in our own judgment. ODA is one of the areas in which we have done that. We have constructed our own programmes. We do not tie our aid even though per capita we may be the biggest exporting country in the world. We do not tell developing countries that they must buy Dell computers or particular pharmaceutical products because they are manufactured here. As a matter of policy, successive Governments decided not to do that. Some of the countries which I most admire in northern Europe have done that, sometimes quite inappropriately.

The issue about the IDA is that of aid and trade. I have no problems with the principle of liberalising trade or with globalisation. I cannot imagine how anybody living in Ireland could have a problem about globalisation. This country is a classic beneficiary of globalisation. However, I have two problems about the way it operates in practice. When globalisation takes the form of an institute based in Washington telling a small country in Asia, South America or Africa the nature of the sort of practices it must implement, one is into very dodgy territory. What needs to be introduced in those countries is good governance to let them move in that direction with the priorities they choose, but inexorably in that direction.

The second issue is to encourage the collapse of trade barriers between developing countries. A major part of the obstacles to trade for developing countries is not the north-south barriers but the south-south barriers, the barriers to trade between developing countries. It is worth pointing out that the planet set itself the millennium development goals. It is a worthy policy to use baseline measurements to assess progress.

The level of progress in terms of development is not wonderful. China is so large it distorts the averages in development figures. If China is removed from the averages and one considers the progress being made on the rest of the planet, the picture is not a happy one. China tends to push up all the averages of per capita GDP because it has been a success. If one takes China out of the equation, one will get a more realistic picture of the level of development, especially if one considers the figures for a region such as Sub-Saharan Africa. As an African parliamentarian told me at a meeting I attended six months ago, 350 million people in sub-Saharan Africa live on one dollar a day while a European cow is subsidised to the tune of $2 dollars a day, and a Japanese cow is subsidised to the tune of $7 a day.

Some 2.5 billion people on the planet live on $2 a day or less and approximately $1.1 billion people live on $1 a day. If one considers the millennium goals and the trajectories, in many cases we are off trajectory to meet the millennium targets. I want to record a few figures. In 1999 the child mortality rate under five years of age was 125 per 1,000 live births and now it is 120 per 1,000 live births — not a spectacular decrease. The proportion of the population living below the $1 a day poverty line of the less developed countries was and still is 33%. We need to be generous with aid, but we are entitled to have rigorous evaluation of how good is that aid. One figure that shocked me, and I am not often shocked, is that one of the indicators of development — I do not know who picked this indicator — is the number of fixed lines and mobile telephones per 1,000 inhabitants. Somebody in America picked this indicator without a doubt because it would not be on my list. In 1999 the figure was 21, and in 2002 it was 40, which represents a massive increase of 20% per annum. That raises the question that when there is no improvement in regard to the proportion of people who have to live on $1 a day and there is such spectacular growth in something like the number of fixed line phones and mobile phones, we are entitled to and must repeatedly re-evaluate the quality of aid and the quality of the development package. I hope the IDA and the World Bank have begun to learn that lesson because history does not suggest they were very enlightened in the past.