Michael Ahern (Cork East, Fianna Fail)

I thank Senators for their wide ranging and interesting comments on the Bill. The Members of this House have shown a consistent and genuine concern for the less well-off countries of the world and this is acknowledged.

Senator Brian Hayes asked does the IDA contribution form part of the overseas development assistance budget. The ODA budget is principally funded through the Vote of the Department of Foreign Affairs. The IDA contribution is included as part of the overall ODA budget. It is paid through the Central Fund and does not form part of the annual Estimates.

The IDA lends money on a no-interest basis. Repayments start after ten years and loans must be repaid over a period of 35 to 40 years. The IDA's approach is to support country-led poverty reduction strategies in key policy areas, including helping to raise productivity, providing accountable governance and improving access to education and health care.

Senators emphasised the need to focus development efforts on the poorest countries of the world and the Bill, as presented, seeks to do this. The efforts of the International Development Association are focused on those countries where per capita income is less than $670. The Bill makes provision for the payment of Ireland's contribution of €50 million, payable over the period to 2008, to the IDA's current funding needs.

Finance is important to the successful achievement of overseas development programmes but it is not the only criterion on which effectiveness is judged. Consequently, Ireland's overseas development co-operation policies have as their absolute priority the reduction of poverty, inequality and exclusion in developing countries.

The Government continues to have as an objective the achievement of the overseas development assistance target of 0.7% of GNP by 2007. In 2003, Ireland spent €456 million, or 0.41% of GNP, in overseas development assistance. Total spending on ODA this year is expected to approach €480 million, the highest ever in the history of the programme. This is a substantial contribution but the Government continues to have as an objective the achievement of the 0.7% target by 2007. It is encouraging that all sides of the House are so committed to the attainment of the objectives of poverty reduction and that they continue to support the Government's involvement in the IDA.