§ Dr. TongeTo ask the Secretary of State for International Development (1) what discussions were held at the recent IMF/World Bank meeting in Washington on debt relief; and if she will make a statement; [83298]
(2) if she will make a statement on the HIPC Initiative following the IMF/World Bank spring meetings. [83304]
§ Clare ShortThe Chancellor of the Exchequer and I participated in discussing the Heavily Indebted Poor Countries (HIPC) initiative at the Interim Committee meeting of the IMF and at the Development Committee of the World Bank in Washington at the end of April. At both meetings, Ministers gave strong support to providing more debt relief to countries which are committed to eradicating poverty. In discussions on the fundamental review of the HIPC initiative, the Chancellor and I emphasised the need for change, in order that the initiative provides countries with a permanent exit from their debt problems, as it was intended to do. We also stressed the importance of debt relief being provided in2W such a way that it releases resources for governments to invest in key sectors to enable them to achieve the International Development Goals. Phase 2 of the HIPC review will consider how to strengthen this link between debt relief and poverty elimination.
§ Dr. TongeTo ask the Secretary of State for International Development what provision will be included in the Government's proposed debt relief framework for debt(a) service and (b) stock reduction. [83300]
§ Clare ShortThe Heavily Indebted Poor Countries (HIPC) initiative focuses on reducing the stock of debt, with countries receiving one large cut in their debt which takes effect after many years. We are pressing the international community to agree not only to provide more debt relief to countries who are implementing demonstrably pro-poor policies, but to provide it in a way that enables governments to increase spending on anti-poverty programmes. This points to revising the Initiative so that it takes more account of what governments can afford to pay from their budgets, and delivers greater reductions in debt service paid, especially in the early years.