Letter: Breaking a vicious circle of aid

Sir: Your leading article 'Africa takes second place' (28 April) invokes a long litany of past mistakes to justify pouring cold water on Oxfam's proposals for a new Marshall Plan for Africa. It is true that many of Africa's wounds have been self-inflicted. Inefficient parastatal monopolies, corruption and nepotism must not be tolerated in any new deal or Marshall Plan. Human rights, appropriate procedures for democracy, press freedoms and curtailment of arms spending should all be specified on the agenda.

But neither can the West be complacent about the past. For years now the West has ritually endorsed the modest UN Third World aid target of 0.7 per cent of GNP and, just as ritually, got nowhere near it. We are seeing a similar frightening ritual in the former Soviet bloc. Mission after mission goes there and returns with shattering evidence of industrial, environmental and social degradation. We respond with a few paltry know-how funds. We reduce men such as Mikhail Gorbachev and Boris Yeltsin to begging-bowl status and then tut tut sympathetically as they face coups and social unrest.

It is time to stop pretending that the status quo will produce solutions for Africa and the former Soviet bloc. It hasn't and it won't. The real tragedy is not balancing the relative strategic importances of the two blocs, as you assert. It is to accept compliantly the intellectual strait- jacket of past and present constraints instead of exploring a wider range of radical options more appropriate to the real challenges of the Nineties and beyond.

There is a tendency to talk of aid in arid money terms, whereas, in reality, one of the prime needs of developing countries in the short term is appropriate imported manufactured inputs to help to exploit their rich economic resources.

My proposition is that we should marry our overcapacity in production with the huge identified shortages of manufactured inputs which exist in the Third World and the former Soviet bloc. Provision of aid in kind would provide European firms with what they need to emerge from recession - orders. The attraction of an aid package is that it will offer a wider range of industrial orders than a straight Euro-domestic infrastructure recovery programme.

We are in a vicious circle. People are laid off. Welfare and unemployment benefit expenditure (which squeezes the foreign aid budget) is increased just when the resources those people could have created are lost. Meanwhile, Africa, for example, remains in dire need, yet is unable to buy the goods we could be providing.

To break this vicious circle, some cherished tenets will have to be discarded. For example, foreign aid in kind should be viewed as an investment to kick-start industry into greater production, rather than as a drain on current resources. It should be viewed as capital spending rather than current, and this redefinition would be enshrined in the accompanying financial machinery. This redefinition should, therefore, be reflected in the current examination of fault lines in the ERM and in the convergence criteria that are seen as the essential prerequisite for a single currency. The process will need credible financial gearing, but let us make our European financial system a tool for the times and challenges we face. Were we to do this, then suggestions for various initiatives on Marshall Plan lines could be feasible.

Yours faithfully,

MARGARET DALY

MEP for Somerset and

Dorset West (Con)

Bridgwater, Somerset

30 April