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Gary Streeter
"It's both an empty gesture and bad policy."
 real 28k

Alan Sharman
"It's pretty insignificant."
 real 28k

Michael Eavis
"We would like to see the government end all subsidies on defence exports."
 real 28k

Tuesday, 11 January, 2000, 20:35 GMT
Ban on underwriting arms sales

Hawk jet The new rules do not apply to Indonesia

More than 60 of the world's poorest nations will no longer be able to buy arms from the UK with credit guarantees from the British tax payer, the government has announced.

In a speech on Tuesday, the Chancellor of the Exchequer Gordon Brown said that the UK had not reduced the burden of debt on poor countries only for the same countries to run it up again by buying weapons.

The new rules also cover loans for any project considered "unproductive" - in part, an attempt to prevent Third World dictators sqaundering their countries' wealth on the trappings of luxury.

Mr Brown said that banning export credit guarantees for "unproductive expenditure" was an important step towards eradicating Third World poverty and urged other industrialised nations to follow suit.

The new policy means that the government will remove export credit guarantees to a total of 63 nations.

But both anti-arms trade campaigners and defence manufacturers said the move would have little impact as the countries affected were relatively small-scale purchasers of military equipment.

Importers such as Indonesia - which has been a controversial purchaser of British-made defence equipment - are not covered by the new restrictions.

The govenment had already been operating a ban on arms export guarantees to the 41 nations covered by the internationally-agreed Heavily Indebted Poor Countries Initiative (HIPC).

Forty nations are already covered by the ban on export credit guarantees. The scheme is being extended to a further 22 countries, including Cambodia, Mongolia and Eritrea.

Gary Streeter: Policy is "empty gesture"
Gary Streeter, shadow spokesman on international development, condemned the initiative as a bad policy which would only lead buyers to look elsewhere.

"It's an empty gesture, " he said. "Very few of these countries buy weapons from us anyway.

"Of course it grabs a headline but I think its bad policy and a slippery slope.

"Although, we all want to see emerging nations focus on education and health care, they also have the right to defend themselves."

'Window dressing'

Alan Sharman, director general of the Defence Manufacturers Association, said the scheme would have little impact on the UK's arms industry.

Cambodia is expected to be among the 22 countries involved
"The government is not saying don't sell equipment to these countries, it is saying it will not provide export credit guarantee department cover," he told BBC News Online.

"The cover for the countries involved is minuscule so I think this is just another example of Labour spin.

"This may be welcomed by non-defence companies who feel it will give more opportunity for cover for their activities.

"But the attitude some of these governments may take is that if we won't sell them defence equipment then they won't buy our roads or our hospitals."

Paul Beaver, spokesman for Jane's Defence Weekly, also suggested the announcement was cosmetic.

"Much of this is window dressing but at least the government is setting out its stall to arms exporters," he said.

Persuading other countries

The chancellor will be hoping to persuade other leading industrialised nations to follow the UK's lead when they meet in Japan at the end of this month.

Michael Eavis, director of Safer World, which campaigns on arms issues, called for the policy to be extended.

"Politically it is a very important initiative and it will ensure poor countries do not use their resources to fund unproductive military expenditure," he said.

"But, economically, it is less significant. The 62 countries count for a couple of per cent of defence exports from the United Kingdom."

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See also:
18 Dec 99 |  UK Politics
Arms exports in the spotlight
03 Nov 99 |  UK Politics
UK arms exports under scrutiny
18 Dec 99 |  UK
Campaigners hail UK debt deal
08 Jun 99 |  debt
Q & A: Dropping the debt
21 Dec 99 |  Business
Debt: why it's written off

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