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 user 2005-06-11 at 11:35:00 am Views: 44
  • #9877

    G8 Agrees to Historic Debt Relief for Poorer Nations

    LONDON (June 05) – Britain’s Treasury chief Gordon Brown
    said Saturday that G8 finance ministers had agreed a historic deal to cancel $40
    billion worth of debt owed by the world’s poorest nations.

    He said 18 countries, many in sub-Saharan Africa, will
    benefit immediately from the deal to scrap 100 percent of the debt they owe to
    the World Bank, the International Monetary Fund and the African Development
    Bank. Up to 20 other countries could be eligible if they meet strict targets for
    good governance and tackling corruption, leading to a total debt relief package
    of more than $55 billion.

    “The G8 finance ministers have agreed 100 percent debt
    cancellation for Heavily Indebted Poor Countries,” Brown told a news conference
    in London.

    Aid agencies welcomed the deal, and said it would save the
    18 countries a total of $1.5 billion a year in debt repayments, that could now
    be plowed into health care, education and infrastructure development.

    Finance ministers from the United States, Britain, Japan,
    Canada, Russia, Germany, Italy and France agreed the package at a two-day summit
    in London.

    Nations in sub-Saharan Africa alone owe some $68 billion to
    international bodies. Rich nations long agreed the debt must be relieved but the
    international community had failed to agree a formula to tackle the problem.

    The package was put forward by Britain and the United
    States, following talks in Washington last week between U.S. President George W.
    Bush and British Prime Minister Tony Blair.

    Britain shifted to the U.S. position that the debts should
    be scrapped outright, rather than rich countries taking on the repayments for
    the poor countries. Bush also made a significant concession and agreed that rich
    nations would provide extra money to the multilateral bodies to compensate for
    the assets written off, and ensure future aid packages would not affected.

    The agreement will initially cover 18 nations eligible for
    debt relief under the HIPC initiative, including Benin, Bolivia, Burkina Faso,
    Ethiopia, Ghana, Guyana and Mali. A further nine countries are close to
    completing the targets for good governance set out under the initiative and
    would then qualify. Some 38 countries in total are taking part in the HIPC
    program, launched by the World Bank and IMF in 1996.

    “This is a great deal for people in many of the very
    poorest countries, it reflects well on (Britain’s Treasury chief) Gordon Brown
    and (U.S. Treasury Secretary) John Snow and is a tribute to the growing global
    campaigns to beat poverty,” said Jamie Drummond, executive director of DATA,
    the organization founded by U2 singer Bono. “This bold step builds serious
    momentum for an historic breakthrough on doubling effective aid and trade
    justice at the G8 summit next month.”

    The Jubilee Debt Campaign called for further action and
    said at least 62 countries needed 100 percent debt cancellation in order to meet
    the United Nations’ Millennium Development Goals of reducing poverty, hunger and
    disease affecting billions of people by 2015.

    Britain has made tackling poverty in Africa and the
    developing world a priority for its G8 presidency.

    Blair’s approach is three-pronged: increasing aid;
    eliminating debt; and removing export subsidies and other trade barriers that
    make it difficult for developing nations to compete.

    Aid agencies say the G8 leaders must now focus on meeting
    Britain’s target of boosting international development aid by US$50 billion a

    Some question whether agreement on that will be reached at
    the July 6-8 G8 summit in Gleneagles, Scotland.

    The United States and Japan both reject a British proposal
    to raise an extra US50 billion a year by selling bonds on the world capital
    markets – the International Finance Initiative.

    Like the United States, Japan prefers its own bilateral aid
    programs, and France is pushing its own initiative – an international aviation