Letter: Bad debts for arms
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Your support makes all the difference.Sir: The revelation in The Independent (27 January) that the Government is likely to have to pay off pounds 800m owed by Indonesia for British arms exports demonstrates why an ethical foreign policy makes good financial sense.
Pressure groups have argued that the export credit guarantee scheme, which underwrites these arms orders, only encourages oppressive regimes, such as Indonesia, to buy weaponry beyond their means and actually to increase their military spending. Oppressive regimes frequently do not pay up. Iraq and Nigeria have consistently been among the top five in the Export Credit Guarantee Department's claims league. Nigeria is now the largest debtor to the scheme.
It should also be pointed out that British-based banks play an important role in putting together financial packages that enable oppressive regimes to pay in instalments for these large weapons deals. However, because of the ECGD they take no financial risk, unlike the British taxpayer.
Our evidence shows that the general public object - both as taxpayers and bank customers - to playing any role in facilitating this trade. For example, 96 percent of the Co-operative Bank's customers believe that their money should not be used to finance or facilitate the sale of weapons to any country which has an oppressive regime.
It is now clear that there are both moral and financial reasons to end this objectionable trade with oppressive regimes.
MERVYN PEDELTY
Chief Executive
The Co-operative Bank
Manchester
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