Deputy Joan Burton was in possession but she is not here. We will proceed with our next contributor, who is Deputy Richard Boyd Barrett. I call for order in the Visitors Gallery.
Asian Infrastructure Investment Bank Bill 2017: Second Stage (Resumed)
Question again proposed: "That the Bill be now read a Second Time."
They are celebrating.
It is good to have something to celebrate, I suppose. Deputy Boyd Barrett can normally be heard anyway, irrespective of the din in the background. Perhaps he will proceed with his contribution.
Thank you, Ceann Comhairle. Actually, I am going to wait. It is pretty noisy.
Yes. We will relax.
Can we stall the clock for a minute?
Keep the clock going.
Now, Deputy Boyd Barrett. Tá an t-úrlár agat.
I did not hear all of the contributions in the earlier part of the debate. Fine Gael and Fianna Fáil are certainly supporting this, but I am not sure what other people are saying yet. The Competition (Amendment) Bill aids workers' interests and gives workers who need it the right to organise as trade unionists to improve their pay and conditions. It is great that we can come together and agree to pass a Bill that will do that. After the nice consensus we had on the previous Bill, I am afraid that I do not believe that the Asian Infrastructure Investment Bank Bill 2017 is going to be good for workers, for the environment, for poorer countries or for the Chinese people. I do not think it is a very good way for us to invest €125 million. It is amazing, in a way, that there is such enthusiasm from the Government for this. Maybe it is not that amazing and is just in line with the Government's general philosophy and ideology.
I would have thought it might have given it a little pause for thought when one looks at the sorry history of the IMF and the World Bank and what those institutions have done to developing world countries and debtor countries, which is effectively steal the natural resources, infrastructure and public services of poorer countries around the world; wreck the environment in many poorer countries; and undermine the position of working people and the less well-off in those countries. Why on earth we would want to participate in the creation of a new Asian version of the World Bank-IMF is beyond me. I suppose it is fairly typical of the pragmatic, as the Government would see it, approach to the way the world economy is organised that we just feel that this is the way it is so we must be part of it and we do not want to be left out of the party. That is more or less what the Minister of State said.
On the other hand, the Minister of State said that not to join the Asian Infrastructure Investment Bank would raise questions about Ireland's position on China's increasing integration in the global economy and international financial architecture. He said that such a decision could impair Ireland's growing bilateral relationship with China with potential adverse effects for Irish businesses. Would it be such a bad thing if we were critical of the Chinese regime? I often find it humorous when the Government talks about its commitment to human rights on the international stage but we then deal with dictatorships like the Chinese regime, because that is what it is. It is a brutal dictatorship in a country with no democracy that ruthlessly crushes all opposition in the most bloody way; routinely executes people for often relatively minor crimes, as the Chinese dictatorship would see them; has no respect for the human or civil rights of its own population; brutally represses people in Tibet; and brutally treats much of its rural population, which is where we get very close to the issue of the Asian Investment Bank. It has already been indicated that some of the investments of the Asian Investment Bank are in areas like hydro power and it has not ruled out coal.
Even though it pays some lip service to the Paris climate change targets and environmentalism, the bank has carefully ensured the door remains open for financing coal-powered projects, which are doing immense damage to the global environment in China and causing huge pollution that impacts on the health of the Chinese population, or hydro power projects in China, which have had a very devastating effect on rivers and have driven people out of whole swathes of the countryside they previously inhabited because of the impact of dams to develop hydro power projects. These projects have a very serious and negative impact on millions of Chinese people about whom the Chinese state does not give a damn. The Chinese Communist party does not give a damn about these people but just drives ahead with what it dictates are in the interests of China Inc. We are very keen to get involved in that and get a slice of the cake regardless of the callous and brutal disregard of the Chinese regime for the rights of its own people or minorities within China or the often devastating environmental impact of some of the big infrastructure projects in which the Chinese regime has engaged.
As a growing industrial and economic power, China wants to start to rival the other big blocs in the world in beginning to use its surplus of capital to start a form of economic colonialism much like the US and the western powers have used the IMF and the World Bank to embark on a new phase of economic colonialism. This is where they lend money to poorer countries like Bangladesh in order to do as the IMF and the World Bank have done, namely, to get those countries in hock, gain control of strategic influence over key infrastructure projects and natural resources, profiteer from them at the expense of those populations and draw those countries into the debt boomerang, as Susan George described it. The bank lends money to these countries in an apparently benign move to assist them but in reality, the bank gets them into debt and then exercises very significant control over how those projects are carried out, the conditions of employment of the workers, the need for privatisation as part of developing those infrastructure projects and crippling interest repayments which lock those countries into a debt cycle which cripples them. Susan George is one of the foremost international critics of what she calls the debt boomerang where someone throws something and it comes back and hits them in the face.
That is what debt has done to the Third World. Investment that appears to be benign ends up being a mechanism to transfer massive amounts of wealth from the poorer countries to richer countries. In one of Susan George's seminal books, The Debt Boomerang, which was written in the early 1990s, she points out how this worked. It largely involved debt owed to the IMF and the World Bank. Between 1982 and 1990, the debtor countries, which are overwhelmingly very poor countries, paid back $1,300 billion to the creditor countries mostly through the IMF and the World Bank. This is an enormous amount of money for these countries. Did that reduce the debt burden of those countries or did it increase? Have a guess. Their debt actually increased in that period. After paying out $1,300 billion, they still owed more to the western countries that were the financiers and members of these global institutions like the World Bank than they owed when they took out the loans in the first place. These literally become mechanisms to suck out billions and as we move through the 21st century with inflation, we are talking trillions. When one looks at the fire-power of this Asian Investment Bank, they are talking about $4 trillion in investment per year and one can see that this becomes the mechanism to then suck out multiples of that over long periods of time from these poor countries, gain control of their infrastructure and resources, gain very significant influence over their governments and essentially blackmail the population of those countries.
Of course, we have now seen echoes of this with the EU-IMF structural adjustment programme called austerity, which was imposed on us when we found ourselves sucked into this cycle, and we are still affected by it. Members should think about what happened with our strategic investment fund here. We have to privatise as part of those investments. We have €4 billion but we have to allow the market into those investments and somebody else has to make money out of it. We are tied into that because of the strings that are attached in fiscal treaties and so on with European arrangements to which, crazily enough, we have signed up. The severe negative impact is evident and affects, even as we speak, our capacity to invest in social housing, health care and all that. We are restricted and denied the right to invest even our own money in the social housing we desperately need, creating the incredible irony that Ireland could build more social housing in the 1930s, 1940s and 1950s when it was poorer - virtually a Third World country but where we had control over our own investment and expenditure - than we can deliver in the early 21st century.
We are beginning to get a taste of this, but the poorer countries of the world have been suffering from this since at least the 1980s and the 1990s. It has had a devastating effect on those countries. Now we are planning to do an Asian version of this, with China in the lead, India playing an important role and Germany, obviously, involved as one of the other big participants. We are a minor player in it but as the Minister indicated, we want to be seen to be part of the club with these big boys. It is interesting that the United States and Japan do not want to get involved in this because they see this as a potential rival to the World Bank and as part of the intensifying competition between the big economic blocs of the United States and the western blocs on the one hand and China on the other. Do not get me wrong. I do not feel sorry for Donald Trump and the US in its fears about the growth of Chinese economic power or a rival power to the United States but the point is that we should recognise all these big, super-economic blocs, which essentially are trying to engage in forms of economic imperialism and colonialism in their regions, as being a major problem for the world. They ultimately accelerate the flow of wealth from the have-nots to the haves, from the poor countries to the rich countries, from the working people to the big bankers, the big financiers and the big corporate interests that dominate in influence and with their positions in institutions like the Asian Infrastructure Investment Bank, AIIB, the World Bank, the IMF and so on.
This is a power grab by a rising power, China, to get in on the act that has been monopolised by the IMF and the World Bank, and to rival it. In the competition that is intensifying between the US bloc and the rising Chinese bloc, the losers will be ordinary people in those countries, in China itself, in surrounding countries and the surrounding region and indeed the whole world with regard to the environment. They have a callous, cavalier disregard for the environment and the consequences, as well as the rapidly accelerating gap between the haves and the have-nots on a world scale. This institution will further accelerate and intensify that mode of organising global economic activity. That is what it is about, namely, about China getting in on the act and us facilitating that. I do not think we should. I think there are better ways that we could spend €125 million to do things that we need to do here. I am not saying we should not use moneys that we have to help other countries that need support and investment but not via institutions like this, which are all about squeezing as much back out as they possibly can. These institutions are not about benign aid or assistance and solidarity but are about lending money to get back extortionate interest and to gain control over governments, investment policies and countries' actual physical infrastructure and services at the expense of the people and the environment in those countries.
I will conclude on that but these points must be made because this is a significant development. The sad history of the World Bank and IMF on the global stage over the past 20 or 30 years should really make us reconsider why we would want to get involved in another project of this sort, which is destined to do the same sort of damage that the IMF and World Bank have done.
I am grateful for the opportunity to briefly comment on the Asian Infrastructure Investment Bank Bill 2017. This Bill is to obtain Oireachtas approval for Ireland to join the AIIB before the end of 2018 and it is a strong indication of the dramatic changes which have taken place in the global economy over the past three decades. The rate of development of the BRICS economies in particular, despite recent slowdowns in growth, show the dramatic rise in the share of world production by the BRICS countries and especially by China. That economic development is mirrored in the Minister’s decision to join the bank, which has 57 founding signatories from June 2015 and up to 25 African, European and South American countries, including Ireland, Belgium and Canada, look set to join this year. Including the 52 countries that have ratified the bank's articles of agreement, up to 77 countries may have joined by the end of the year.
The AIIB was first proposed by President Xi Jinping of China in a Bali conference in October 2013 and President Xi seemed to envisage the bank as a new international development bank, raising major capital to fund roads, rail, power and communication grids across Asia. Although initially welcomed by Secretary of State, John Kerry, the Obama Administration remained very suspicious of the proposal and tried to dissuade its closest allies like Britain, Germany, Australia and South Korea from joining the organisation. The Cameron Conservative Government, perhaps anticipating the difficulties the current Government or the Government in place after the general election will face in Brexit, decided to become a founding member of the AIIB and its $100 billion fund.
At the time, human rights groups and promoters of multi-party democracy in Hong Kong and China felt that the UK was too willing to placate the Chinese Communist Government and these concerns remain regarding our Government’s proposal. Deputy Richard Boyd Barrett reminds me that, many times in this House, I have raised the situation of Tibet and the Uyghur nations. Huge territories of the People's Republic of China are, of course, distinct nations, and there has been grotesque repression in them over the last 40 to 50 years.
Many observers have questioned the need for a new Asian development bank, given the past role of the US-led World Bank, the International Monetary Fund and the Japanese-led Asian Development Bank. The Obama Administration and other economists openly worried that China will use the AIIB to set its own Asian and global economic agendas and will ignore environmental protections and standards. Human rights, especially of workers on large infrastructural projects, anti-corruption standards - in tendering and awarding of contracts in particular - and company governance standards are concerns. We have seen the massive expansion of the Chinese Government's export economy and infrastructural development in so many countries of Africa, which has raised many questions about basic rights, especially for workers and native populations.
American Governments have long called on China to assume a leadership role in the global economy and to prioritise infrastructural development in Asia. China has also complained that the Bretton Woods architecture, the development of which was led by the US after the Second World War, refuses to recognise the massively growing role of China in the world economy. The Asian Development Bank is dominated by Japan and headquartered in Tokyo, and its voting share at that bank is more than twice that of China.
The US Congress also blocked for more than five years an IMF proposal backed by President Obama to make China the third most powerful country at the IMF, after the US and Japan. China, with 19% of the world economy, later saw its voting rights rise to only 6.2% of the total, from under 4%, while the US share only fell from 16.7% to 16.5%. Of course, President Obama also did not invite China to join the ill-fated American-led Trans-Pacific Partnership.
Whatever about the deep suspicions in the US about China's ultimate economic and political goals, it has been estimated that there is a $40 trillion basic infrastructural deficit down to 2030 in the less developed Asian economies. That is a significant amount of investment, representing probably twice the size of the American annual economy. It has also been estimated that an $8 trillion investment is necessary down to 2020 alone. Since its inception last year, the AIIB, which is headquartered in Beijing and led by Mr. Jin Liqun, a former World Bank and ADB bank economist, has funded what seems on the surface to be an impressive list of infrastructural projects, often in co-operation with older multilateral institutions. These include a $165 million loan for a power distribution system in Bangladesh, a $216 million loan for social housing in Indonesia, a $300 million loan for a hydropower plant in Pakistan, a $301 million loan for a port facility in Oman, loans to Tajikistan and Pakistan for improved and new motorways, and a $600 million loan for the trans-Anatolian pipeline, TANAP, to link Azerbaijan and Europe. As Deputy Boyd Barrett cogently pointed out, these all are loans. The AIIB claims, after its first year of existence, that due diligence on these loans included all environmental and social impacts, and then also entered into these partnerships with the Asian Development Bank and the World Bank in countries such as Pakistan and in Azerbaijan, but concerns will remain.
The foregoing and forthcoming projects funded by the AIIB will certainly also advance China's political and economic interests across Asia, in particular, the development of President Xi's so-called One Belt, One Road, OBOR, initiative across Asia to Europe on the historic Silk Road. In Ireland's case for joining the AIIB, the Minister, Deputy Noonan, pointed to our trade with China in 2015 which was then worth more than €11 billion. Clearly, and especially in the context of Brexit, we need to diversify our export markets, and the vast Chinese and other Asian markets will be important for Ireland. The Minister for Finance also seemed to base much of his case for entering the AIIB as Ireland's contribution to helping to increase China's integration into the global economy and ensuring an appropriate role for the massive Chinese economy in the developing financial architecture. It is notable, however, that only one of the four main development banks, the European Bank for Reconstruction and Development which was founded in 1991, has as part of its mandate the provision of loans and assistance to countries "committed to and applying the principles of multi-party democracy". Effectively, the other three major banks, the IMF, the World Bank and this new bank, have a similar economic approach which does not overtly concern itself with the levels of democracy in countries receiving credit from them. Ireland has been a member of the World Bank since 1975 and the Asian Development Bank since 2006, and these, as have I mentioned, have similar investment principles to the new AIIB.
I note that Ireland's allocation in the bank is 1,313 shares or votes, that our subscription to the fund will be €125 million split 80:20 between callable and paid-in capital, and that the 20% or €25 million is payable over five years. This potential funding liability looks small compared, for example, with the almost €10 billion callable capital contribution to the European Stability Mechanism. The AllB fund has an authorised capital stock of $100 billion or €95 billion.
Many constituents may be concerned however that Ireland's capital contribution from the Central Fund, according to Minister, Deputy Noonan, when he launched this Bill, will be counted as part of the UN target of 0.7% of GNP for overseas development assistance. Apparently, the OECD has recommended that AIIB be included on its list of ODA eligible organisations. Many constituents might feel this funding will not be used directly to assist the least developed countries, especially in Africa. We are familiar with bigger countries, such as the UK and the US, dressing up all kinds of investments which benefit themselves as ODA.
China dominates the AIIB shareholdings with almost 29.8% of shares and is followed by India with 8.4%, Russia with 6.5% and Germany with 4.5%. It seems we will have less than 0.1% of shares when the full 77 members come on board. The Minister of State might give us an indication of what our portion will be. We will be represented on the board of governors and the Minister for Finance will be governor for Ireland. The board of governors elects the 12 members of the board of directors and Ireland will be represented by the director for the euro area.
Over recent years, there have been a number of disturbing reports on Chinese, European and American investment in many developing countries where workers, including children, have been badly treated and exploited. Clearly, the EU, American and Chinese leadership and all their companies have questions to answer about the treatment of workers, the exploitation of natural resources and the appropriate nature of infrastructural investment. The House might recall a particularly shocking report on the cobalt miners of Katanga province in the Democratic Republic of the Congo. Cobalt is a critical element of mobile phones, which we were talking about at an earlier meeting, and all our other IT equipment. It is, therefore, a vital product, but these child workers have been treated very badly. These issues remain to be addressed in Europe, America and China. The major international investment banks, including the new AIIB, will have a profound responsibility in this regard. As I said, I am reminded of the situation of Tibet and other Uyghur nations, which I have often asked the Minister for Foreign Affairs and Trade, Deputy Flanagan, and his predecessors to raise constantly with China to try to ease the repression of the nations and religions of such states within the People's Republic. It is to be hoped our entrance into this bank will not in any way make us more reluctant to make comments about those situations.
I have also outlined some of the other concerns around Ireland joining the AIIB, but given the growth of Irish-Chinese trade, the need to integrate further the huge Chinese economy into the world and the doubted benefits to so many Asian countries' infrastructure, which I hope will not be critically burdened with loans, I would give some heavily qualified support for the Bill and for entering into the bank.
Irish accession to this new Asian development bank reminds us also of the grave infrastructural deficits in our own country. The price paid by Irish citizens for the outrageous blanket bank guarantee almost nine years ago continues to hamper our daily lives. The starving of investment for social housing, health and education and transport facilities since late 2008 has seriously damaged our society and produced untold pain. The outgoing Taoiseach and Minister for Finance, by the looks of it, in their last few days in office, bear considerable responsibility for that situation. As Mr. Fintan O'Toole wrote in The Irish Times of yesterday, their craven acquiescence in disastrous EU diktats was shocking and unforgivable. The real context of the current Fine Gael leadership campaign is the fear of Fine Gael Deputies that their party, based on Kenny and Noonan's legacy, will be decimated at the next general election, as Fianna Fáil was in 2011. In any case, it is appalling that the Minister, Deputy Noonan, has chosen to override this Dáil and rubbish the so-called new politics to sell over 25% of AIB to pay down national debt. I am one of those who would hold on to all the 99.999% of AIB we own and channel all its future profits and dividends into infrastructural development such as social housing, health and education facilities and transport projects, such as the north-western motorway, Luas for Cork and Galway, metro north and full Dublin commuter DART. It makes no sense for Ireland to proceed with the sale of AIB simply to fulfil barren European Commission targets. It is the hallmark of a failed tenure in the Department of Finance. At the very least, moneys realised from partly privatising AIB should be used for critical infrastructure, perhaps starting with a massive programme of direct build local authority housing. Any macro cost-benefit analysis for the Irish economy and society would confirm that the final act of the Minister, Deputy Noonan, is another grave error in a career which has been full of mistakes in public policy which have been damaging for the people.
Deputy Michael Healy-Rae is sharing his time with Deputy Mattie McGrath.
Ireland's application for membership of the AIIB was accepted on 23 March 2017. As our membership of the bank will involve ratification of an international agreement, it is necessary for the primary legislation to be approved by the Oireachtas before we complete the process of joining. The Bill is short and is based on previous legislation which allowed for our membership of other international financial institutions such as the World Bank. The Bill will provide for our membership of the AIIB, approve the latter's articles of agreement and allow payments to be made.
As our economy recovers slowly following the crash that marked the end of the Celtic tiger era, we must ask if investing in this bank is the best thing for our country to do. Every time we join an institution of this sort, do we actually lose some of our sovereignty? The Bill is before us at a time when some Deputies are questioning the Minister for Finance's decision to sell off a portion of our share of AIB. Given that AIB is turning a corner and is now making money and that the State bailed out that bank as well as other banking institutions, is now a good time to be paying €125 million for membership of the AIIB? A sum of €25 million is payable in five instalments over five years. It is a very serious time for us and this is a very serious decision to be making. At the same time, we must be very conscious of the massive trade that we have with China. The amount of money involved in trade both ways is enormous but we must be sensible about what we do for our taxpayers.
This multilateral financial institution came into operation in January 2016. It aims to foster economic development and regional integration in Asia, primarily through investment in infrastructure. The bank has 57 founding members and is based in Beijing, with China playing a leading role in its establishment. We have seen the way that China is aggressively playing its part in terms of global dominance. I heard recently that the Chinese bought the Waldorf Astoria Hotel in New York and closed it down. They are entering into a programme of investment to turn it into residential units. They have big ideas for taking over but I am at a crossroads as to whether it is in our best interests to be a part of that. We are being told that the rationale for Ireland's membership of the AIIB includes geopolitical and economic considerations and, in particular, trade relations with China and the wider Asian economy. Over the past 15 years, Ireland has increased its engagement with Asia and particularly with China. Of course, that is to be welcomed because we are exporting goods to China and making money from that trade. China is the world's second largest economy in a broad number of areas. Bilateral trade has grown significantly and Ireland's total trade with China in 2015 was worth €11 billion, a massive sum.
Membership of the AIIB will also complement Ireland's international development policy which aims to support sustainable development and inclusive economic growth. On the other hand, not joining the AIIB could possibly deprive Ireland of a chance to play a role in an important new addition to the global financial architecture of the world. It would also raise questions about Ireland's position on China's increasing integration into the global economy. We are at a crossroads but the decision has been made. The application for membership was accepted in March. We must weigh up the situation that is before us and decide whether it is a good deal for the taxpayers of Ireland. In recent days I have spoken to a lot of individuals about this issue, including those who work in the banking sector and business people. Some have said that we would be insane not to join while others have said the exact opposite. Ultimately, membership will cost us €125 million. That is a very large investment. We must try to weigh up the pros and the cons as best we can.
To refer back to the earlier debate on fostering an environment that encourages foreign direct investment into Ireland, in light of the level of trade that we already have with China, it would be very foolish to do anything that would jeopardise this. We must ensure that we have as many jobs as possible in our economy, especially in the coming years. We must try to encourage those young people who left during the bust to come back. We must continue to attract new investors to Ireland who will create well-paid jobs that will encourage our emigrants to come home. They will not come back here to work for the minimum wage, however. They will not leave the lifestyles that they have in Europe, Australia, New Zealand and America to come back here to work in jobs for which they will only be paid the minimum wage. That is not going to happen. They will need to be encouraged. There will have to be a business environment here such that they will be able to obtain loans to build houses, rear their families and have good, sustainable jobs. Jeopardising in any way the trade that we have with China, or upsetting the apple cart, would be unwise. It is incumbent on all elected representatives to do their best to ensure that people have the opportunity to work at home. Whether it is our children or grandchildren, we do not want to see them being forced to leave. We want to see them staying here if at all possible. On that note, I will hand over to my colleague, Deputy Mattie McGrath.
I thought for a moment that Deputy Mattie McGrath was going home.
If the Ceann Comhairle is referring to Fianna Fáil as home, I often fleetingly go in and out of it but I always maintain that it was a case of them leaving me rather than me leaving them. When they are ready to come back to my standards for the Fianna Fáil Party, of which my father was a founding member, I will be ready, willing and able to take up the cudgels. Having said that, I am very good friends with the Fianna Fáil finance spokesperson and with many other members of the party, including the Ceann Comhairle.
I am independent.
I know the Ceann Comhairle is independent now but in his previous incarnation, we were good friends. I hope that we will stay friends and, in that vein, I will not keep the Ceann Comhairle here too long tonight.
We are discussing the Asian Infrastructure Investment Bank Bill 2017. One could nearly make a mistake, given what Fine Gael did yesterday, through the Minister for Finance, Deputy Noonan, despite the request of the Dáil, in selling off shares. We could drop one of the letters and it would be AIB that we are talking about. We should talk some more about that because this House voted not to sell off shares in AIB. We further voted that the proceeds of any sale should not to be given back to the gods in Europe but be used for badly-needed infrastructure in this country. Instead, we are pursuing some sort of pipe dream.
Founded in January 2016, the AIIB is a multinational financial institution founded to bring countries together to finance energy, transport and other infrastructure projects in Asia. The bank started operations with 57 member countries and $100 billion in capital.
We are talking about the things we want to do with the money we are supposed to be getting for AIB, which is the people's bank because we own it now.
We have been told that the primary purpose of the Bill before the House is to facilitate Ireland's membership of the Asian Infrastructure Investment Bank. Quite frankly, at the moment I am more interested in the proposed national housing co-operative Bill, which is being developed by a good number of people here. If we are looking to other countries, perhaps we should borrow money from them to relieve the crippling debt that is being faced by people with mortgages on their family homes who are being brought before the courts under threat of repossession. They are being made ill and distressed. Such evictions are contributing significantly to the housing crisis. I would be more interested in signing up to a fund that would be used to help such people or to pay down the horrible debt that was forced on us by our so-called allies in Europe.
Thankfully, Article 29.5.2° of the Constitution requires Oireachtas approval through legislation if an international agreement is to be ratified by Ireland. I am delighted that the Constitution places some kind of restriction on this activity. Ireland's application for membership of the Asian Infrastructure Investment Bank was approved in March of this year and must be ratified by 31 December 2018. We have some time. Why did we apply for membership? Our membership of the bank will give Irish exporters greater potential economic opportunities to expand their markets into the Chinese region. In addition, it will create necessary strong ties with the region. I would certainly agree with anything that supports such objectives.
I recall that the Minister, Deputy Coveney, who is soon to be either the Taoiseach or the Tánaiste, went to China some years ago to negotiate a deal in respect of Irish milk and beef exports. I remember fondly that during the Government formation talks that took place just over a year ago, Deputy Danny Healy-Rae said that the Government's announcement of everything it intended to do in China was great. There was some discussion on all the beef and milk we were going to give to China. Deputy Healy-Rae suggested that everyone involved - the Minister, the Department, everyone else who was involved, and the IFA - had forgotten that the Chinaman would not drink the milk. It was pie in the sky. It was a pipe dream. The Minister of State, Deputy Eoghan Murphy, should not be shaking his head because he was probably at the talks. That is what happened. We did not send the milk. The milk did not go.
It would be hard to find a subject matter-----
No. I was always told to make haste slowly.
Deputy McGrath is getting there.
I am getting there.
I admire the Deputy's inventiveness. I just do not know-----
No. I welcome the current trade of approximately €8 billion between Ireland and China.
Good.
That is great, but milk is not a big part of it. I think the milk could be gone sour by the time it gets out there.
It will be butter.
Who said one time that we would choke England with butter and drown it with milk? I think it was a Fine Gael Minister for Agriculture years ago. He was one of the Blueshirts. I think it was Risteárd from Tipperary, but I cannot think of his full name now. The Ceann Comhairle might be able to give his second name. It was before my time, but it will come back to me. Everyone knows who I am talking about anyway. We did neither of the things he said we would do.
What are the issues? Ireland will be liable for a total membership subscription of €125 million, 20% of which will have to be paid in capital. There are no free dinners or lunches. It is a fairly healthy investment. As we all know, five instalments of €25 million will have to be paid. The first instalment will be due when the ratification procedure has been completed. When this Bill is passed this year or next year, we will have to cough up €25 million. I could think of many more things we could do with that money rather than spending it in this way. Bypasses and other infrastructural developments are needed. People on waiting lists and people with disabilities need to be given services. Do we have the money in the economy to do this now? That is my question.
At face value, it seems sensible to expand the market for Irish exporters. It is obvious that we need to do that, but we also need to be wary about the small print. Like Deputy Broughan, I am concerned that we might be reneging on other commitments to engage in some kind of financial magic. I would not have anything to do with using some of the money we provide as overseas development aid as collateral. Since the time of the missionaries, when many nuns and priests went abroad, this country has had a proud record in overseas development. I refer, for example, to the work of our non-governmental organisations. Now we have a developed situation and we are sending funding. We cannot be tinkering and playing games like hide-and-seek with this money. It should be protected. It has been cut enough in recent years. Obviously, there has to be accountability for it. We cannot tamper with it.
Ireland has been offered 1,313 shares or votes in the Asian Infrastructure Investment Bank. This would theoretically place Ireland 43rd of 58 members. However, it is possible that other countries will join the bank. It is like doing the lotto. If it is a small local GAA club lotto, one has a good chance. If it is the big lotto, one has a very slim chance. This is quicksand. Ireland will have a vote through the EU. One person from the EU will have a vote on the board of the bank. Ireland is included as part of the EU, which has not always been a good friend to us when things have been voted through. It has not always protected our interests. There are substantial questions to be asked in that regard.
A number of concerns regarding the motivation for the establishment of the bank have been raised by the US, in particular. Japan and the US are the only G7 members that are not members of the bank. Given that the US has the largest economy in the world, surely we should examine its concerns about membership of the bank before we join it. This is another example of globalisation. We need to be very careful not to bite off something we cannot chew. We definitely cannot swallow it. It could choke us before we are able to swallow it. Given that our economy has been recovering slowly since the crash of the Celtic tiger, is investing in this bank this best thing for us to do now? I do not know whether it is. Serious questions must be asked. Do we lose a bit of our sovereignty every time we join an institution like this? Such questions are serious. When I got my first loan with Bowmaker as a young man, I knew I was taking a risk but I had some control because I was dealing with a bank that was based in Ireland. Its headquarters might not have been here, but it had a base here. We have a bad history of being mistreated, bullied, intimidated and literally raped - I hate using the word - by banks.
According to the Minister, Deputy Noonan, "Ireland’s application for AIIB membership is based on a desire to further strengthen our growing trade and economic links to Asia and China in particular". That is all fine and dandy. The Minister has also said "the AIIB will seek to address the significant demand for infrastructure in Asia, with the aim of fostering economic development and regional integration". I suggest the Minister would be better off minding our own little patch here rather than running away with himself. I know he is retiring and I wish him well. As I have said, 25% of AIB is being sold without the permission of this House - indeed, against its wishes - and the proceeds will be used to make repayments to our masters in Europe. We should have renegotiated that deal anyway. We never owed all of that money. They were reckless to shovel it in here when our banks went bust. We paid back the bondholders and the banks. All the bondholders had insurance, so they are laughing doubly all the way to the bank. I have described this previously as being like rubbing butter to a fat sow's behind. The Ceann Comhairle knows what that is about. He has often heard that expression in-----
The Deputy explained that phrase to the Minister of State the last time he used it.
Did I?
I still do not get it.
I thought the Deputy might desist from referring to the fat sow again.
Do you know what I mean?
I do.
Good man.
I think the Minister of State does too.
Just as well.
I did not quite get the explanation I was given the last time.
I will explain it to the Minister of State afterwards.
He is tweeting there as part of the leadership election campaign. He is seeing how many votes have changed or switched for his master. I can see him on the phone. He is not listening to me anyway. They do not listen. That is the problem. They paid the price for not listening to the people during their five-year term before the formation of this Government.
I have referred to the Minister's suggestion that "the AIIB will seek to address the significant demand for infrastructure in Asia". I am concerned about the infrastructure in this country, which I represent. I cannot say I am in favour of this. There are too many ifs and buts. It is like buying a pet lamb, as I have often done. One might fatten the lamb up to get it ready for the market or to do a show, only for it to keel over with its four legs up in the air. It is gone. That is the way it happens. This is the same. It is a case of "live, horse, and you'll get grass". It looks good on paper.
Deputy Michael McGrath has said that Fianna Fail is supporting this Bill. Maybe it is. I am not in Fianna Fáil, thankfully. I have the freedom to do what I want to do. I am not supporting this because it is too risky. There are too many ifs, buts and ands associated with it. It is very unclear. Why was it not put out there for debate or publicised? Where has it been since we applied to join the bank? How come there has been no debate or discourse on it? Certainly the Rural Independent Group knew nothing about it anyway. Where was it headlined? Where were the economists to tease it out and examine it? Where are the financial gurus? They were not very adept at looking after the economy here when we crashed. We have seen all the carry-on since with the banks - the trials that collapsed and everything else.
We have a lot of dirty washing to do. We need to put it out and leave the wind blow through it. We should clean it off before we jump into something like this. We do not want to end up with another heap of dirty washing that we cannot handle until we get Ajax or Daz or whatever we need. We will not have chemicals that will clean it. We need to mind our own business, stick to our country, grow our economy and look after our people who have always wanted to house themselves, pay for their houses and have small businesses. I supported the legislation we discussed earlier, including the Companies (Amendment) Bill 2017, but I do not support this Bill. It is a step too far in a troubled economy that is not as good as the Minister of State and his colleagues think it is. Just because Dublin has gone mad now, the cranes are dazzling them and they are getting carried away.
The Minister of State and his colleagues will be waving flags on Friday night after the vote but they should make haste slowly. I urge caution. I am not in favour of this Bill. I thank the Ceann Comhairle for his forbearance.
Will the Minister of State undertake to respond to the debate, notwithstanding the many rural analogies that were put to him?
I thank Deputies for their wide-ranging and interesting comments on the Bill. I ask Deputy Mattie McGrath if in future he could direct his comments at the Minister and not at the officials. I also remind him that we are on an island and we must work and trade with others. That is very important and it is a crucial point behind this Bill that is being progressed.
The intention to join the Asian Infrastructure Investment Bank, AIIB, has been made public.
On a point of order------
No, the Minister is replying.
The officials' boss is the Minister. The whole lot of it was a mess so they were all responsible. I was addressing both the Minister and the officials.
I think the record will show that the Deputy made his remarks directed at the officials here in the Chamber-----
I did not.
-----and I just ask that in future they be directed at me. The record will show that.
It was not personal.
That is how it came across.
Deputy McGrath has clarified that he was casting no aspersions on any officials.
Good.
Can we continue?
I would just let Deputy McGrath know that there was much engagement between the Government and the AIIB prior to making the application for membership and the president of the AIIB was here in January at the European Financial Forum in Dublin Castle, which we hosted as part of our IFS 2020 strategy. I also went over to meet the president in Beijing earlier this year.
I welcome Deputy Michael McGrath’s contribution during an earlier part of the debate on the Bill when he noted the importance of promoting strong trade and economic links with Asia, which is the fastest-growing region in the world. He also recognised the driving role that the AIIB can play in stimulating further economic growth in Asia through much-needed investment in infrastructure.
I welcome Deputy Tóibín’s strong support for our membership of the bank. He referenced the fact that Ireland did not join the bank as a founding member in 2015. Ireland had favoured a co-ordinated approach to membership with other EU member states, however, this proved not to be possible. While the Deputy is correct that there are slight differences in the terms for founding members, these are not substantial. Ireland is joining on the same terms as all other countries in its round of applicants and will enjoy equivalent voting rights. In addition, Ireland can be assured of the good governance of the bank, having observed its operations over its first year. Regarding Deputy Tóibín’s comments on our capital contribution, I can assure him that there is no question of Ireland joining on the cheap. The contribution of €25 million is in my view proportionate and was calculated on the basis of Ireland’s relative gross domestic product, GDP, and the capital available in the bank. All other prospective members will have their capital calculated in this way.
I welcome Deputy Burton's contribution and her questions regarding the vision of the AIIB and how Ireland will approach its relationship to the bank. The bank primarily differs from other development banks through its focus on investing in infrastructure in Asia, which is sorely lacking. While the Asian Development Bank and World Bank have an overriding focus on poverty reduction, the AIIB's mandate is to invest in infrastructure, which will in turn facilitate trade and investment, fostering economic growth for all. In this way the AIIB will not overlap with or contradict the work of existing development banks.
To respond to some of Deputy Boyd Barrett's points, I will cite the example of a typical AIIB project, namely, the power project recently announced in India, which will have benefits far beyond the infrastructure itself. Such a project will improve the supply of electricity access to rural areas, thus, allowing women and children in these areas to study after night has fallen and improve their education. More broadly, electricity access will make a significant contribution to economic development in some of the poorest rural regions. I also highlight that in addition, this project includes a gender action plan, which will aim to promote women’s participation and maximise the project's benefits to women.
Through its membership of the AIIB, Ireland will aim to ensure that such projects are of the highest standards, with rigorous social and environmental protections and clear economic benefit for those who need it most. We will also aim to ensure that the bank takes a multilateral approach to its projects. Efficient and effective multilateral co-operation is particularly important as the international community moves towards delivering on the ambition of the 2030 Agenda for Sustainable Development.
There are encouraging signs to date on the multilateral approach of the bank. The presidents of the AIIB and World Bank co-signed a memorandum of understanding at the recent IMF-World Bank spring meetings in Washington. The memorandum builds on the first co-financing framework agreement for investment projects signed last year by the two institutions and provides an overall framework for co-operation between the World Bank and the AIIB. It paves the way for the two institutions to further enhance co-ordination at the regional and country levels and builds on the projects which they have already co-financed in Pakistan, Indonesia and India. This partnership will assist in ensuring that the robust standards of the World Bank will be transferred to the AIIB. For economic growth to be sustainable it must be inclusive, including in regard to gender. Ireland strongly supports the World Bank’s 2015 gender strategy and will aim to ensure that efforts to tackle gender inequality are mainstreamed at the AIIB.
Deputies Burton and Tóibín are right to look closely at standards with regard to human rights and the environment. In observing the AIIB since it came into operation we have noted the clear steps it has made to introduce strong safeguards in these areas. The AIIB has an Environmental and Social Framework, which was published in February 2016 and is publicly available on the AIIB website. The framework includes provisions on labour rights, gender equality and environmental standards. In addition, the 57 founding members, in particular EU members, have used their influence to ensure that the standards of other development banks are mirrored at the AIIB. As I noted earlier, the majority of the AIIB’s projects to date have been co-financed with other development banks providing reassurance in this regard. If Ireland were to become a member of the AIIB, we would use our influence, in co-ordination with other members, to ensure that these high standards are maintained.
Deputies Michael McGrath and Mattie McGrath also made specific reference to progress in meeting the UN target of 0.7% of gross national product, GNP, for overseas development assistance, ODA. The programme for Government sets out our ambition to make progress on this target as resources allow. Based on current forecasts we anticipate the percentage of ODA per GNP for 2016 as being at least 0.3%. Obviously, recent revisions in GNP have reduced this percentage, despite increases in overall funding for ODA in recent years. Ireland will continue to work towards this target, as economic circumstances allow, and we anticipate that our contributions to the AIIB will be of benefit in this regard.
Deputy Broughan asked a question regarding the voting share. The final voting share remains to be decided but we expect it to be more than 0.1%. I absolutely reject his characterisation of the Minister, Deputy Noonan's record of public service.
I thank the Deputies for their contributions and support for this Bill. I am heartened to see that there is commitment to strengthening Ireland’s ties to the growing Asian region and to maintaining our strong history of support for international development.
Question put.
In accordance with Standing Order 70(2), the division is postponed until the weekly division time on Thursday, 1 June 2016.
The Dáil adjourned at 9.25 p.m. until 12 noon on Thursday, 1 June 2017.