G8 AGREES TO DEBT RELIEF FOR POOR NATIONS

[Anonymous]

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
year.

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
tax.

[Author]

June 11, 2005 at 11:35 AM