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Debate on the Address

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Tuesday, 13th November 1990.

[13 NOVEMBER 1990]

DEBATE ON THE ADDRESS (Fourth day) -(Continued)

[Continuation of Official Report from col. 304, Tuesday, 13th November 1990.]

10.6 p.m.

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Viscount Montgomery of Alamein: My Lords, we have had a debate which has ranged widely over many parts of the globe-Europe, Hong Kong, the Gulf, Northern Ireland and many different places. But at this late hour I propose to return to the very beginning of this debate and speak to your Lordships about Latin America, as I have done on many occasions in the past.

Latin America was not mentioned in the gracious Speech; indeed it never is. It was therefore with some surprise, but with a great deal of pleasure, that I listened to my noble friend Lord Caithness and his encouraging comments on this subject. I have had many arguments with him in the past about Latin America, but I am delighted by his recent conversion. Long may it continue.

I believe that there are good reasons why this conversion is justified. In a troubled world, about which we have heard a great deal this afternoon, Latin America can be seen as a continent of stability, growth and opportunity. We have heard from a number of speakers today about the collapse of communism in Eastern Europe and the emergence of democracy. All this has taken place very suddenly. By contrast, in Latin America the demise of autocratic governments, mostly military, over the last decade has been gradual -different, of course, in each country but with the same result. Now all the republics of Latin America, except Cuba, are democracies and it is quite possible that that may change in the next few years.

Latin America has historically-certainly, since the end of World War Two-been very closely linked economically and politically to the United States, but is now seeking ties with Europe. In fact, the new democratic leaders are travelling extensively to Europe to promote their cause, which is a very welcome move. I hope that we shall see more of them all the time.

If I may turn for a moment to trade and economic matters, the past 15 years have been difficult for Latin America. Indeed a similar difficulty was mentioned by the noble Lord, Lord Pitt, in connection with the Caribbean and Africa, as indeed is the case for most developing countries. The oil crisis of 1973 hit Latin American countries hard. The terms of trade turned against them. They adapted, but it was not easy.

Added to that has been the burden of debt. I would remind your Lordships that debts were contracted by largely autocratic military governments, but with the full support, and indeed encouragement, of the West at a time of excess liquidity. The debt burden, therefore, is something which is a shared responsibility

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between those who provided it and those who received it. It seems to me that dialogue and understanding are needed in order to resolve the problem. Debt in Latin America has also been a factor in fuelling inflation; something which has been referred to by others and which appears to be endemic in Latin America, but which is now being tackled vigorously by the new democratic governments.

Let me give your Lordships a few figures about Latin America and why it may seem important. First, the population of Latin America is now approaching 450 million. The gross domestic product is more than £430 billion. The market size in terms of import capacity is larger than south-east Asia, the Indian sub-continent and sub-Saharan Africa combined. Indeed, in economic terms Brazil is more important than what was previously described as Eastern Europe. In those circumstances it is gratifying that the UK is the second largest investor in many countries. Unfortunately, our share of the market in visible trade remains abysmally low, though that is changing gradually and during the past two years trade has begun to pick up.

Ten years ago China was all the rage. British exporters and industrialists were encouraged to go there. I am one of the few who did not then make the visit. China turned out to be disappointing. Now the rage is Eastern Europe but the change in state control and in the systems there will be slow and difficult. That is due to the nature of their history. By contrast, Latin America is naturally entrepreneurial. Therefore, the change in economic philosophy which has accom- panied the return to democracy has brought with it the opening of markets, the introduction of market forces, the privatisation of cumbersome and inefficient state industries and the dismantling of central planning. All those factors will be readily accepted because of that entrepreneurial nature. Therefore, we in the UK and Europe have much in common with Latin America and I hope that we can profit by that.

I congratulate the Government on the appointment of Tristan Garel-Jones as Minister of State with responsibility for Latin America. He is a fluent Spanish speaker and, as far as I am aware, the first such Minister with that talent to be appointed for a long time. He understands the countries and his visits, which I hope will be frequent, will be well received by all concerned. I hope that he will continually repeat them. Sadly, few Cabinet Ministers, and no Prime Minister, have ever visited Latin America. That is surprising when one thinks that we have had the same Prime Minister for 11 years. She has travelled the globe extensively but has not gone to Latin America. Perhaps it is not too late.

In Latin America we can see a continent that has changed direction, is developing fast and is seeking closer ties with Europe. Up to now it has been ignored by Her Majesty's Government, but I hope that the new awakening indicated by my noble friend Lord Caithness will prosper and increase in the years to

come.