IRELAND will contribute £13 million in overseas aid to the International Development Association under the terms of a new Bill which passed all stages in the Dail yesterday.

The International Development Association (Amendment) Bill enables the State to donate the money to the association, which is an affiliate of the World Bank.

It assists the poorest countries which cannot afford to borrow money from the World Bank on its normal terms.

The Minister of State for Finance, Mr Hugh Coveney, told the Dail that association beneficiaries are the people of the world's 79 poorest countries which have a population of 3.3 billion.

Ireland's contribution over three years would be equivalent to 0.13 per cent of total donor contributions.

Ireland was one of five countries from 36 donor states which increased their contribution from the previous allocation.

This year Ireland will allocate £4.3 million to the association's interim fund, Mr Coveney said.

The remaining £8.7 million would be contributed to operations in 1998 and 1999.

The Minister told the Dail that the association's purpose was not to provide short term humanitarian aid but to create the conditions in which the countries themselves would permanently raise the living standards of their peoples.

About 40 per cent of the association's financial support goes to sub Saharan Africa.

Mr Coveney acknowledged that the association was not "blemish free".

He added that "specific measures are necessary to ensure that the least developed countries get a fair opportunity to participate".

It would have to refine its policies to address real needs in the countries concerned and the provision of services would have to be effective.

Mr Michael Kill (FF, Galway East) said that while everybody supported the Bill there was concern that "if you are giving loans, they could still be imposing much hardship on the poorest countries".

He said the £13 million was very welcome and he hoped the funding would be focused on poverty reduction. He said economic reform restrictions were being placed on countries which could create more poverty.

He was concerned that the US was not contributing to the first year of the three year IDA programme.

"I would hope that we can use our influence to get the rich countries to meet their UN targets" for development contribution, Mr Kitt concluded.

Having passed all stages, the Bill goes to the Seanad.