Britain Proposes Debt Relief to Nations

By ED JOHNSON
.c The Associated Press

BRIGHTON, England (AP) – Britain will provide more debt relief for the
world’s poorest countries and challenge other rich countries to do the
same, Prime Minister Tony Blair’s government said Sunday.

Treasury chief Gordon Brown said many developing countries were
crippled by servicing their debt and could not invest in their
infrastructure.

“We will pay our share of the multilateral debt repayments of
reforming low-income countries,” Brown said in a statement, released
by the Department of International Development.

“We will make payments in their stead to the World Bank and African
Development Bank for the portion that relates to Britain’s share of
this debt. We do this alone today but I urge other countries to follow
so that over indebted countries are relieved of the burden of
servicing all unpayable multilateral debt.”

Brown was scheduled to reveal further details in a speech later Sunday
to a “Vote for Trade Justice” event at a church in Brighton, the
coastal town where the governing Labour Party is holding its annual
conference.

Britain holds about 10 percent of the total debt owed to the World
Bank and other development banks, or about 7 percent of all the debt
of the world’s poorest nations.

Britain’s Development Secretary Hilary Benn said poor countries needed
“significant additional resources” to “lift people out of poverty,
get children into primary schools and improve basic health.”

“Debt relief is an efficient way of transferring these resources to
countries that can use them most effectively,” he said in the
statement. “We call on other governments, especially our G-8
partners, to join us so that no country is held back by the burden of
unsustainable debt.”

To be eligible for the debt relief, countries must be able to show the
savings will be used to meet the goals of the 2000 Millennium
Summit. Those goals include halving the number of people living in
dire poverty from 2000 levels; ensuring that all children have an
elementary school education; ensuring that all families have clean
water; and halting the AIDS epidemic – all by 2015.

The list of countries will include those that have been through the
Heavily Indebted Poor Countries Initiative: Benin, Bolivia, Burkina
Faso, Ethiopia, Ghana, Guyana, Mali, Mauritania, Mozambique,
Nicaragua, Niger, Senegal, Tanzania, Uganda, as well as a number of
other countries such as Vietnam and Armenia, where the World Bank has
assessed the countries are capable of absorbing direct budget support,
the statement said.

Britain also called for debt payments owed to the International
Monetary Fund to be funded through the more efficient use of IMF gold
reserves.

09/26/04 13:52 EDT