§ Mr. Simon Hughes
To ask the Prime Minister if he has any plans to reduce the debt burden on developing countries and extend the Trinidad terms to other G7 nations; and if he will make a statement.
§ Mr. Newton
I have been asked to reply.
The Government are fully committed to the agreed international debt strategy, and have given a strong lead in tackling the debt burden of the poorest and most heavily indebted countries. In addition to relieving developing countries of over $1 billion of aid loans, this Government have been responsible for both the Toronto and Trinidad initiatives. These were the first initiatives to result in the partial cancellation of the more substantial and burdensome debts owed by the poorest countries to export credit agencies.
The Paris club began implementing Trinidad terms in December, and seven countries have already benefited. The agreed terms give a 50 per cent. reduction in debts falling due in the course of the debtor country's IMF programme of economic reform, and commit creditors to consider reducing the whole stock of debt in three to four years' time if the debtor keeps to its IMF and Paris club agreements. The Government hope that Trinidad terms can be further developed in the direction of our original proposals, which were for a benchmark figure of two thirds reduction applied immediately to the whole stock of debt. It would also be an important step forward if all creditors, without exception, were to implement debt reduction under Trinidad terms.