Debt Relief (Hansard, 3 May 2000)

§ 3. Mr. Malcolm Savidge (Aberdeen, North)
What progress was made on speeding up debt relief for heavily indebted poor countries at the spring meetings of the World Bank and the International Monetary Fund. [119353]

§ The Secretary of State for International Development (Clare Short)
At the spring meeting of the World Bank and the International Monetary Fund, agreement was reached to establish a joint World Bank-IMF committee to oversee the implementation of the enhanced heavily indebted poor countries initiative. The Chancellor and I have pressed for that, and hope that it will provide a focus for efforts to ensure that commitments made at the Cologne 132 G7 meeting—that three quarters of eligible countries would start to receive debt relief before the end of the year—are met. It looks as though that target is slipping.

§ Mr. Savidge
Do the current World Bank and IMF estimates of the number of countries that will qualify for enhanced debt relief look as though they will reach the G7 target of three quarters, to which the Secretary of State referred?

§ Clare Short
I am grateful to my hon. Friend for that question. I did not attend the meeting, because my voice—which is still croaky—collapsed completely when I was meant to be in Washington. I am sad to say that the communiqué the Development Committee stated that it was hoped that at least 20 eligible countries would start to receive debt relief before the end of the year. That is a reduction in the number in the Cologne commitment. All those who are concerned about debt relief—a concern shared widely throughout our society and across the world—should exert pressure to speed up the process. We are doing that as a Government, but other Governments are causing delays; that is a big worry.

§ Mr. William Cash (Stone)
Would the Secretary of State be good enough to tell us which countries are responsible for the delay? Does she accept that members of the Jubilee 2000 all-party group are extremely concerned about the situation? I pay tribute to her for the honesty with which she has just expressed herself on the subject—she, too, is obviously deeply concerned. How much debt has been paid off? What steps are being taken to liaise with the proposed summit on the matter which the Pope is organising towards the end of this year?

§ Clare Short
I do not think that it would be wise for me to name countries that are causing delays. We need to exert that beautiful pressure that comes from civil society throughout the world on all the countries involved so that we can move forward. I ask the hon. Gentleman and all those involved in campaigning to do that. In the United States of America, there has been difficulty in obtaining the support of Congress for commitment to the multilateral debt fund. I know that the Administration are trying to get that support and that they would be grateful for any help to achieve that.
So far, five countries are on track with enhanced debt relief. Uganda has gone through the process completely. The amount of debt relief on offer is $100 billion of the $145 billion that is owed. That is a considerable sum.
I am aware that the Pope is holding a conference; that can only be good. I hope that it will contribute to keeping people to the commitments made at Cologne.

§ Mr. Andrew Reed (Loughborough)
Although it is important that we have made progress on this issue, there obviously remains much work to be done. I urge the Secretary of State to give us at least a hint as to which countries are holding matters up, so that those of us who are involved with the Jubilee 2000 coalition can encourage others around the world to apply pressure on their own Governments, if they are holding things up. 133 There is a feeling of real frustration that we have come so far, but have not yet delivered a real change for people in the third world.

§ Clare Short
I am grateful to my hon. Friend for his offer of support. It would be invidious to have a list of guilty parties. Not many major countries were involved in the G7 meeting at Cologne. We are about to go to Okinawa. Pressure on all to speed up the process and to keep to their commitments should be exerted across the international system. The new unit in the bank and the fund gives us an opportunity to put the pressure on, which is important. One of the great achievements is the decision that debt relief should go behind poverty reduction strategies. Some countries are calling for absolute perfection in those strategies. We are saying that we should put broad poverty reduction strategies in place, so that initial debt relief can flow and then be strengthened as time goes on. That is the right way forward.

§ Mr. Gary Streeter (South-West Devon)
I know that the Secretary of State will be as disappointed as many of us are at the lack of progress in this special year, the year of Jubilee, when we want to make unique progress on debt relief. I know that she will share the concern of Kofi Annan, who said in March: The deeper, faster and broader relief promised last year has yet to materialise. I know that the right hon. Lady is working hard on this matter and will be disappointed, but, apart from the joint implementation committee, what specific plans does she have to break through the current logjam?

§ Clare Short
I am sorry to disagree, as usual, with the hon. Gentleman. There has not been a lack of progress. The most stupendous achievement has been made, primarily by the Church and faith groups across the world and by other parts of civil society, in pressing the leadership of the richest countries in the world to agree more generous debt relief to mark the year 2000. The enhanced heavily indebted poor countries initiative and the decision to put the focus on poverty reduction strategies are considerable achievements. Five countries are already on track and one has completed the process. So that is all good, and it is considerable progress.
We are seeing some slippage in the number of countries coming through against the target set at Cologne of three-quarters of eligible countries on track by the end of 2000. I think that the situation is retrievable. With enough pressure, countries will get back on track, and that must be our shared objective.

§ Mr. Streeter
I know that the Secretary of State is working hard on the matter, but I am sure that she will agree that the granting of debt relief to only five countries after all these years and after four months of the year 2000 is not a significant achievement. May I put a practical suggestion to her? Between now and the G8 summit in Japan in July, will she make debt relief her highest priority? Will she engage in a round of shuttle diplomacy with her counterparts in G8 countries, the IMF and the World Bank? Will she put every last ounce of effort into 134 the project between now and July so that, for all those living under the crippling burden of unpayable debt, the year 2000 really will be a year of delivery?

§ Clare Short
I am grateful for the hon. Gentleman's concern, but he is wrong to suggest that, only this far into the year, to have five countries on track for the much more generous debt relief that has been agreed as a result of the international campaign is a disaster. It will be a disaster if we do not get three quarters of eligible countries through by the end of the year. Pressure from him and all of us, including me, could achieve that objective. I certainly promise him that I and my right hon. Friend the Chancellor will continue to exert all the pressure that we can. I am not in favour of shuttling around the world, as some politicians do, for its own sake, but I promise that I shall do everything in my power, as will my right hon. Friend the Chancellor. I hope that with the help of the hon. Gentleman and all hon. Members, we shall make sure that we keep to the Cologne commitment.