§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Alan Howarth.]2.33 pm
§ Mr. Neil Thorne (Ilford, South)
We have had a long association and friendship with both India and Nepal, which has been in two directions. We have provided aid to India which, over the past eight years, has totalled no less than £910 million. That works out at an average of £113.75 million per year. The figures vary from year to year because the agreed projects that are taken up are not even in number throughout the years and in some years the take-up is greater than in others. That is why we must look at this in averages.
During that period we have had a major hand in helping the Rihand coal-fired power station with £117 million, the Bharat Aluminium Company thermal power plant with £131 million; £24 million has been provided for low-cost housing; £15 million for social forestry projects in Karnataka; £31 million for long-wall mining technology; and £24 million has been provided for the Indo-British fertiliser education project. All are important aspects of aid which can be expected to continue in the future. I hope that my hon. Friend the Minister for Overseas Development will say more about that later.
During a similar period, Nepal has received just over £70 million. That works out at an average of £8.75 million per year. It has contributed to the Dharan-Dhanjuta road in east Nepal and has provided help with the tea industry, with rural development in the Kosi hills, with grain storage, with an earth satellite station and—most important—reafforestation in the middle hills. With Nepal's increasing population, there is a problem about obtaining fuel and large amounts of forest have been denuded. That is bad for the soil, which is then washed away down the mountains by the rivers, making it difficult to work the remaining farms properly and effectively. Therefore, reafforestation is important.
In the past, the attitude behind our aid has been to help to renew those natural resources that can be renewed, to provide effective communications, to provide health care —including, of course, an improved water supply—arid especially, to help with education and training. In return, we have been able to export a considerable amount of goods to India. In 1983 we exported no less than £805 million worth of goods to India. That has risen steadily until in 1988 the estimated figure was £1,112 million.
The Nepalese have a special relationship with this country. I need hardly remind the House that it goes back a long way. For 173 years Nepal has been providing us with soldiers for the British Army and for the Indian army when it was under British control. The Nepalese will provide an effective service to the British Crown for many years to come because we are experiencing the problems of the demographic trough, which means that the number of service personnel in the British Army in the next 20 years is likely to be much lower than in the past, especially in infantry regiments. That means that we shall be relying even more on the Nepalese Gurkhas to help us with our defence commitments.
I was sorry that we were unable to help more in providing for the future of the station of Dharan. My hon. Friend knows my feelings about this. I wish that we had managed to retain it permanently because once one 1267 recruits to a particular area and provides a valuable service in terms of a hospital and medical treatment, one finds that service people tend to retire to such areas.
The value of the properties and the number built in that area depend upon the presence of a facility at Dharan. About 18 months ago the Government decided to close that, and it is now in the process of being wound down. That is unfortunate because it made a major and significant contribution to the economy in that part of Nepal.
The King of Nepal, His Majesty King Birendra, is a conscientious monarch and spends at least two months of every year visiting his people in the hills. I have personal experience of that. It is a wonderful thing to do and says a great deal for the king's dedication and his keenness and enthusiasm. He finds out a good deal about his people and his experience of their trials and tribulations and finds out where they most need help. That means that he is in a good position to see exactly where there are problems and where some assistance is required.
It came as a great disappointment to many hon. Members to learn about a breakdown in the trade and transit arrangements between these two friends of ours. Nepal is a land-locked country. It has China through Tibet on the northern border, which has two very difficult passes, and on the southern, eastern and western borders it has India. Until recently, as a result of a treaty which came into effect in 1978, there were no fewer than 15 crossing points for trade and transit, but that treaty came to an end about 12 months ago. Two extensions of six months were granted but then, at short notice, the agreement was terminated. Considerable difficulty is now being experienced in getting goods across the border because only two crossing points remain open. They are probably the most important of the crossing points and are at Raxaul and Jogbani. The end of the agreement has caused severe restriction and great difficulty for this land-locked country.
No fewer than 90 hon. Members have signed an early-day motion drawing attention to their concern about this situation. Quite clearly we must all be concerned because we are providing aid to two countries which are not trading freely or having free transit between one another. Much of the aid, especially to the smaller country, is dissipated in extra expense because of the closing of the border in so many areas. Civil servants in Delhi have said that the majority of essential materials are passing across the frontier despite the restrictions introduced in March, but that has not been found to be so by some people. I had a letter only yesterday from a constitutent whose son is working on behalf of the CARE charity in Nepal. His efforts are being severely restricted because he is unable to get petrol to move about the country to provide the important help that is required. He has told his mother that paraffin for cooking and sugar and soap are not easily available, that petrol is severely rationed and that medicines and hospital supplies are in short supply. This is a most serious matter when one is trying to help some of the poorest people in the world and also to ensure that the money spent by the British taxpayer in providing afforestation projects is not undermined by the wood being cut down to provide heat for cooking, necessary though that purpose is. Much of the money that the British 1268 taxpayer is paying for reafforestation, particularly in the middle hills of Nepal, is likely to be wasted if the situation that I have described continues for much longer.
I understand that Mr. Rajiv Gandhi is keen that the matter should be solved as quickly as possible. Of course, sometimes civil servants have a way of holding things up. My hon. Friend the Minister for Overseas Development will know that not so long ago I had to deal with the question of some gold taken off a plane in Calcutta when it was being transported back legally from Hong Kong to Nepal by Gurkha servicemen to purchase land. Such a technical holdup may go on for months or even years while lawyers do their best to unravel the problems.
That kind of situation cannot be allowed to make life so difficult for people in parts of the world such as India and Nepal. There are good reasons why the two countries should have a very harmonious relationship in transit and trade. India is the largest democracy in the world, and Nepal relies on its goods transiting through India. In fact, 90 per cent. of Nepal's trade is with India. Thus, the two countries have a very close-knit involvement. At the same time they are entirely independent and sovereign states, and, as such, should be able to expect their goods to be allowed to be transmitted through adjoining countries without unnecessary let or hindrance.
Many agreements previously entered into, some of which extend until 1991, have had to be suspended because of this embargo. Diesel fuel, paraffin for cooking, baby food, medical supplies and salt are some of the products affected. Clearly, we must show concern about the situation. Coal is also important. Recently, 2,000 tonnes of coal has been released by India, but that is only a small proportion of the 1988 quota of 80,000 tonnes still due. The Nepalese cement industry, which relies on coal from India, is now in a desperate situation. Although Nepal entered into a contract with the Salt Corporation of India for the supply of salt until 1991, inadequate supplies of salt are being allowed into Nepal. Customs duty of about 145 per cent. is being imposed on Nepalese exports to India, leading to a virtual stoppage. That, too, is a serious matter.
Any reasonable person would be concerned about the matters that I have raised. While Mr. Rajiv Gandhi knows about the situation, I do not think he really appreciates its extent, because I am sure that if he did he would take urgent action to put it right. In the interests of the three countries concerned—India, Nepal and the United Kingdom—I hope the problem can be solved urgently. It affects the British taxpayer for the reasons that I have explained to my hon. Friend the Minister. I trust that it will be possible to unravel this matter very soon so that the trade and transit arrangements can be allowed to continue.
I should have thought that in the short term it would be sensible to allow the previous arrangements to continue for a further 12 months and in the meantime to come to a permanent arrangement for the two separate issues—trade and transit. I urge my hon. Friend the Minister to do everything possible to ensure that the matter is resolved to everyone's honour and satisfaction.
§ Mr. John Wheeler (Westminster, North)
My hon. Friend the Member for Ilford, South (Mr. Thorne) has kindly agreed that I should speak for a moment or two in support of his excellent speech. He brings to the House a special knowledge of the kingdom of Nepal and its 1269 relationship with India because he is the chairman of the all-party Nepalese group and a distinguished member of the Select Committee on Defence, and he has a special knowledge of the Gurkhas.
This is a serious matter. There is widespread support for my hon. Friend's points inside the House and in the country. The United Kingdom has had a special relationship with the kingdom of Nepal since 1815. Many of the Nepalese nationals have served in Her Majesty's forces and continue to do so. Several hundreds, if not thousands, of residents in Nepal receive pensions from the United Kingdom Government for their service. Many of them are suffering hardship as a result of the expiry of the treaties and the failure to find a solution of the problem between India and Nepal.
We all know that the United Kingdom has an excellent relationship with India. We are the firmest of friends with that great country and recognise its contribution to the work of the Commonwealth and the democratic principle. It is especially sad that the present situation should have arisen between two countries with which the United Kingdom has a special regard and affection.
It will not do for the Foreign Office to sit on the fence as the Minister of State, Lord Glenarthur, implies in correspondence to me. He observed that he hopes that the issue will be settled and that the Foreign Office willcontinue to follow events with keen attention.It will not do simply to be an observer of events. We have an interest and a concern. We must ask the Government to use their best influence with our friends in New Delhi and on behalf of the kingdom of Nepal to ensure that there is a solution in that part of the world for which we have a special regard and an historical link.
§ The Minister for Overseas Development (Mr. Christopher Patten)
I am grateful to my hon. Friend the Member for Ilford, South (Mr. Thorne) for giving us this opportunity to discuss the problems and challenges of development in south Asia. My hon. Friend is an acknowledged authority on Nepal and no one has done more to strengthen the good relations between the kingdom of Nepal and this country. I am also grateful to my hon. Friend the Member for Westminster, North (Mr. Wheeler) for contributing to the debate. Any contribution which my hon. Friend makes in the House is stamped with his considerable common sense.
I am aware of the strong views of hon. Members on this subject, as is my noble Friend, Lord Glenarthur, the Minster of State to whose correspondence my hon. Friend the Member for Westminster, North referred. The strong views expressed in this debate and in other ways will be noted beyond the House.
I want to begin by referring to the aid and development issues raised by my hon. Friend the Member for Ilford, South. On the face of it, there may appear a sharp contrast between Nepal, on the one hand, a small mountainous kingdom and still very largely an agrarian society, and, on the other, India, the second most populous country in the world with a large and growing industrial sector. In fact, their similarities are more significant than their differences. They both face the same basic challenge which is to raise the standard of living of their peoples, the majority of whom live in absolute poverty or close to it. Our aid programmes to both countries—the subject of the debate —are aimed at assisting them with that challenge.
1270 Nepal has only opened itself up to international trade and aid, and to all the influences that go with them, in the past 25 years. It is all the more encouraging that it has chosen to follow the path of economic rectitude and has adopted a structural adjustment programme under the aegis of the World Bank and the International Monetary Fund. It has followed that programme with considerable commitment and success. I commend the admirable progress made by the Nepal Government in the past few months.
During my visit to Nepal in March 1988—which was a particularly enjoyable as well as useful visit—I was pleased to be able to offer British support for is programme in the form of a pledge of programme aid worth £5 million. I also pledged £10 million of aid to Nepal's major hydro-electric development at Arun. That and other hydro-electric proposals lie at the heart of Nepal's development prospects. They offer the possibility of a massive jump in gross national product in the next decade or two—some reports say, as much as 25 per cent. The only market for power on that scale is India, which has its own implications for the future.
To put massive development of that kind into place, Nepal must first develop its basic infrastructure. The backbone of its transport and communications is the road system. That is an area in which we made a major investment through the aid programme—difficult though that can be—and we plan to continue doing so in future, in close collaboration with the Swiss aid programme. The Swiss have slightly more experience of road building in mountains than ourselves. Our aim is not only to develop, repair and maintain Nepal's road system but to strengthen the country's own capacity to undertake those tasks.
That kind of institutional strengthening also lies behind our support for the Nepal Administrative Staff College, which trains Government officials in Nepal, and our close links with Budhanilkantha school, from which Nepal's future generations of leaders in government and industry will come. I paid a particularly interesting visit to that school and was very impressed both by the quality of education provided and by the spirit of community that one felt there.
Earlier I mentioned the major challenge faced by India and Nepal of alleviating poverty. It is entirely appropriate that His Majesty the King of Nepal pledged his Government to meet the basic needs of his people by the year 2000. That is an ambitious target. As one would expect of a very poor country, all the social indicators look grim. Levels of literacy are very low by south Asian standards, infant and maternal mortality is very high, and the population growth rate is alarming—especially given the rapid degeneration of the physical environment.
Nowhere are those problems more acute than in the hills. In our long-standing project on the Kosi hills we have assisted the local inhabitants in tackling those problems in an integrated fashion, with a special emphasis on forestry, agriculture and water supply. I should like more time to speak about forestry, which, as my hon. Friend the Member for Ilford, South said, is an extremely important subject. Alas, I must move on.
We agreed with the Government of Nepal that we should assist also in developing a system of primary health care that will reach out to the people in the eastern hills and provide them with the basic health services that they so urgently need. I cannot pass over the question of health without mentioning the British military hospital a 1271 Dharan, which was considered in the recent interesting report of the Defence Committee on the future of the brigade of Gurkhas. I do not wish to anticipate the Government's response to that report, but, as my hon. Friend will know from our evidence to that Committee, we propose to provide a package of £3 million of aid to assist in the conversion of that hospital to civilian use and to maintain the standards of care at that hospital for the benefit of the people in the eastern hills.
It will be clear from my comments that we have an expanding aid programme in Nepal. We expect that our aid disbursements for this financial year will be about 50 per cent. higher than they were two years agoߞ£14 million compared with £9 million. This programme reflects the long friendship between our countries, which has been exemplified by the brave and committed service of the brigade of Gurkhas, in peace and in war.
My hon. Friend the Member for Ilford, South referred to our aid programme in India. It reflects our historic connections with India and the considerable poverty and needs faced by India. More people live in absolute poverty in India than in the whole of Latin America. Over the years, we have found that we are capable of running in partnership with the Indian authorities especially valuable and effective projects. We are trying to help in the power, railways, agriculture and social sectors. I have been particularly impressed by projects which I have seen which attempt to alleviate poverty directly and improve education standards—for example, the work that we are doing in Visak and Hyderabad on slum improvement and on the primary education project in Andhra Pradesh. That is a good programme, and I hope that we continue to apply aid effectively in India.
I turn to the kernal of the argument put by my hon. Friends. They referred to the current state of bilateral relations between India and Nepal and to the dispute which has arisen between them which concerns 1272 arrangements for trade, transit and similar matters. The Government greatly value the rich and diverse web of links which bind Britain to Nepal and to India and which are firmly rooted in tradition and history. I know the importance attached by hon. Members and people in the country to sustaining and developing those links. My hon. Friends have referred to that point in relation to Nepal and India. That is certainly the Government's aim.
It is naturally of considerable concern and regret to us that a dispute should have arisen between two countries with which we enjoy close and friendly relations. I well understand and appreciate the feeling in the House over recent developments. I share hon. Members hope that the dispute will not be damaging to the people of Nepal or India or have any lasting impact on their economic development.
We have followed events with keen attention from the outset and will continue to do so. The World bank is evaluating the effects of the dispute and is co-ordinating with donors. There is no sign as yet that special measures are necessary. We shall consider any well-founded requests as sympathetically as we always do, but we look forward to the resolution of the dispute before that stage is reached. We very much hope that India and Nepal, as sovereign and independent countries, will soon resolve their differences in a way satisfactory to both and so bring the dispute to an end. I wish them every success in doing so. In this connection, it is encouraging that both sides are reportedly willing to hold bilateral discussions to bring about a resolution of the problem. My hon. Friends have set out their argument eloquently and potently and made clear their considerable anxiety about the dispute. I shall ensure that their views, including those of my hon. Friend the Member for Westminster, North on my noble Friend's correspondence, are drawn to the attention of Ministers in the Foreign and Commonwealth Office who, I am sure, will read the report of the debate with interest and concern.
Question put and agreed to.
Adjourned accordingly at three minutes past Three o'clock.