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Aid must be accompanied by democratisation of world financial institutions - Morgan

2 November, 2006

Sinn Féin Enterprise spokesperson Arthur Morgan TD, speaking during statements on the White Paper on Irish Aid, broadly welcomed the publication of the paper, and in particular the restoration of the target of 0.7% of GNP for overseas development aid. He went on however, to express his disappointment that the date for achieving this target has been put back for five years and to argue that without meaningful reform of the World Bank and the IMF, and an end to structural adjustment programmes, the problems in the developing world would continue.

The Louth TD said: "The White Paper on Irish Aid -- or Overseas Development Aid has been widely welcomed as the first White Paper on this issue.

"It restores the objective of reaching 0.7% of GNP for overseas development aid. Obviously this is welcome but it should not be forgotten that a commitment was originally made to reach this objective by 2007. This has now been pushed back to 2012.

"While welcoming the restoration of the commitment to 0.7% of GNP Sinn Féin firmly believes that this should be a floor not a ceiling in terms of our contribution. It is right that a state as wealthy as ours - the second wealthiest in the world - would be allocating, at a minimum, such a proportion of GNP to overseas development aid.

"We should be setting a target, based on European best practice, one percent of GNP and commit to a programme of incremental increases to achieve this objective. It is worth noting that Luxembourg, Norway and Sweden have already committed to contributing 1% of their GNP to the world's poor.

"The commitments to untied aid within the White Paper are welcomed. The fact that poverty reduction is the overarching objective- the focus on poorest and most vulnerable or Least Developed Countries (LDCs) and the continued focus on Africa are also positive.

"While the White Paper acknowledges that "The poorest people in the world's poorest countries are those least able to adapt to the impacts of globalisation, increased trade liberalisation and climate change and those who gain least from global progress", the Irish Government has failed to live up to its own responsibilities in the fight against climate change and has supported the imposition of damaging trade liberalisation policies on developing countries.

"Climate change is on course to become the single biggest threat to long term sustainable development-- the impact is already being felt in countries least able to deal with it. Climate change is exasperating the problem of chronic food insecurity in Africa in particular. There is a huge irony in making commitments to help developing countries cope with climate change if we, as a wealthy developed state, are unwilling to play our part in combating it.

"It is disappointing that this paper does not commit the state to working for the reform and overhaul of the world financial institutions, whose policies are causing so much harm to developing countries. These institutions are neither accountable, transparent nor democratic. Commitments to ODA without such reform will not bring lasting change to developing countries.

"Sinn Féin demands the overhaul, reform and democratisation of the IMF and World Bank. At present every action they take is designed to benefit developed countries at the expense of developing states. They are structured in a way which subjugates the interests of the developing countries to that of the powerful and the USA in particular in whose favour the voting rights are stacked.

"The selection procedure for IMF and World Bank leaders is totally undemocratic with the Presidency of the World Bank being always reserved for a North American. Voting rights within the IMF are based on the entry fee or share bought by the country when they join. It is unacceptable that the US has a blocking minority.

"Citizens of developing countries are disempowered as economic policy is decided by the IMF and the World Bank. This is done by way of the structural adjustment programmes which are imposed upon indebted countries and which have dramatically aggravated the problems facing those states.

"Structural adjustment programmes force governments in developing countries to open up their state's economies -- to export more and spend less. Developing countries' governments are forced to drastically reduce public spending and open up of markets. All of this has had drastic consequences for local populations as living conditions in these countries have substantially deteriorated since their introduction.

"It is clear that overseas Development aid and debt cancellation needs to be accompanied by the ending of structural adjustment programmes and the thorough reform of the international financial institutions."


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