§ Sir Nicholas Bonsor
We are ready to take part with other Paris Club creditors in a further rescheduling of Peru's official bilateral debts once agreement has been reached with the International Monetary Fund on a new economic reform programme. This is expected in the next month or so.
It has recently been suggested that the British Government should use aid funds to cancel some of Peru's debts in return for the Peruvian Government using the local currency equivalent to fund development projects. We believe, however, that is more effective to fund these activities directly: our aid programme to Peru amounts to some £2.5 million a year. The Overseas Development Administration wrote off Peru's aid debts of some £5 million in 1994.