HC Deb 12 March 2003 vol 401 cc280-2W
Mr. Stephen O'Brien

To ask the Chancellor of the Exchequer (1) what discussions officials from his Department have had with representatives of other developed countries regarding the provision of additional relief for Heavily Indebted Poor Countries at the completion point of their relief initiatives; [102008]

(2) what discussions officials from his Department have had with representatives of (a) other developed countries, (b) the World bank, (c) the IMF and (d) the Ethiopian Government regarding (i) restructuring and (ii) suspending Ethiopia's debt repayments; [102007]

(3) what plans he has to (a) organise, (b) host and (c) campaign for a major debate on debt relief involving representatives of countries from the developed and developing countries, the IMF and the World bank. [102006]

John Healey

The UK takes a strong lead in the international debate on debt relief. The issue is discussed at most major international meetings, including the Annual meetings of the International Monetary Fund (IMF) and the World bank, which are attended by representatives from all member countries, including developing countries. The UK will use the forthcoming spring meetings of the IMF and World bank to push for increased efforts on debt relief.

The staffs of the IMF and World bank have prepared a paper on the options for Heavily Indebted Poor Countries to obtain technical assistance to facilitate the resolution of disputes, including those with commercial creditors. The UK will press for a full discussion of this issue at the spring meetings.

The UK also believes that where countries have to contend with external shocks, such as sharp falls in the price of key export commodities, we must form a broad consensus on the need for topping-up at completion point to ensure a lasting exit from unsustainable debt. We will work with our international partners to develop more realistic and generous rules for its provision, including agreement that the calculation of topping-up should exclude voluntary bilateral provision of additional 100 per cent. relief, to ensure that this functions as truly additional relief.

The UK has also been leading the debate on how to raise additional finance for development, including debt relief. The Chancellor and the Secretary of State for International Development have proposed an International Finance Facility (IFF) that will double the amount of development assistance in the years to 2015 from US$50 billion to $100 billion. This money will be disbursed mainly in the form of grants, including debt relief. This proposal is being worked up through the G7 and other forums in the run up to the G8 heads of state summit in June.

Officials meet regularly with their counterparts in other developed countries, and in a variety of international organizations, to discuss a wide range of issues.

Mr. Stephen O'Brien

To ask the Chancellor of the Exchequer if he will list the heavily indebted poor countries which have had full debt relief from the UK. [102009]

John Healey

The UK always goes further than is required under the enhanced Heavily Indebted Poor Countries initiative (HIPC) and provides 100 per cent. debt relief. Under the HIPC initiative a country receives interim debt relief on payments due when it reaches Decision Point and subsequently the debt is irrevocably cancelled at Completion Point. To reach Decision Point and demonstrate their commitment to poverty reduction, a country must prepare an Interim Poverty Reduction Strategy Paper (PRSP), to get to Completion Point they need to develop a full PRSP, and usually make progress in implementing it for one year.

Of the 42 countries classified as HIPCs four are currently expected to have a sustainable burden of debt after traditional debt relief. Of the remaining 38 countries, 26 have now reached Decision Point with US$62 billion in debt relief committed compared with the $100 billion total. Six of these countries have reached Completion Point and have had the totality of their debts owed to the UK irrevocably cancelled. For the 20 countries still at Decision Point the UK provides 100 per cent. relief on debt service payments, and stands ready to irrevocably cancel their stock of debt at Completion Point. Out of 12 countries yet to reach Decision Point, eight are currently affected by conflict and this makes their progress in the HIPC initiative difficult. For these countries yet to reach Decision Point the UK holds in trust any debt service payments made until they can be returned to fund poverty reduction. The UK is the only creditor to operate this policy and has called on others to follow its lead.

The HIPCs that have reached completion point are: Bolivia, Burkina Faso, Mauritania, Mozambique, Tanzania and Uganda

The HIPCs that have reached decision point are: Benin, Cameroon, Chad, Ethiopia, The Republic of the Gambia, Ghana, Guinea, Guinea-Bissau, Guyana, Honduras, Madagascar, Malawi, Mali, Nicaragua., Niger, Rwanda, São Tomé et Príncipe, Senegal, Sierra Leone, and Zambia.

The HIPCs yet to reach completion point are: Burma*, Burundi*, Central African Republic*, Comoros, Democratic Republic of Congo*, Republic of the Congo*, Côte D'Ivoire, Lao PDR, Liberia*., Somalia*, Sudan* and Togo.

* Conflict-affected countries.