HC Deb 21 October 2002 vol 391 cc30-1W
John Barrett

To ask the Secretary of State for International Development which countries she estimates, on current projections, will exit the Heavily Indebted Poor Countries initiative with unsustainable debt. [75060]

Clare Short

Largely as a result of the global economic slowdown and falls in commodity prices, the prospect of most HIPC countries exiting the process with sustainable debt are poor, unless they are provided with further relief. The UK has successfully pressed for the provision of additional relief at Completion Point, but the present arrangement still does not provide a generous enough level of debt relief to those countries with unsustainable debts. We are continuing to press for a more systematic approach to topping up to bring all countries back to a sustainable debt level at Completion Point, so that no country will exit the HIPC process with unsustainable debts.

Additional financing will be required to meet the costs of topping up. At their Summit in Kananaskis, last July, G8 leaders agreed to provide their share of up to an additional US$1 billion for the HIPC Trust Fund. This will not only help meet the current shortfall in the financing of the Initiative, but will also ensure that there are sufficient funds available to finance the additional debt relief required at Completion Point. At the Annual Meetings of the World Bank and the IMF last month, the international community reconfirmed their commitment to the implementation of the HIPC Initiative, and its full financing. Some donors, including the UK took the opportunity to pledge their firm support for the HIPC Trust Fund. The UK announced a bilateral contribution of US$95 million plus its share of any EDF contribution to the Trust Fund. This is in addition to the US$306 million that we have already committed. We hope that other donors will be able to announce their contributions this week.