§ Mr. Kirkwood
asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the implications of the increased burden of interest repayments borne by recipient countries for Her Majesty's Government's future aid programme.
§ Mr. Raison
Bilateral aid to countries with an income per head of less than $790 in 1983 is provided on grant terms. Aid loans to other countries are at rates of interest well below commercial rates of interest. Twenty one of the poorest countries have already had their past aid debt forgiven under our retrospective terms adjustment policy.
The burden of debt servicing is one factor taken into account in setting the level of our bilateral aid and its forms to particular countries. Many developing countries with debt problems need to adapt their economic policies in order to restore growth and improve their balance of payments position. An important aspect of our aid policy, particularly in Africa, is to support those countries pursuing adjustment and investment programmes agreed with the IMF and the World Bank.