§ Mr. BattleTo ask the Chancellor of the Exchequer what representations he has made to(a) the International Monetary Fund, (b) the World Bank and (c) the G8 regarding further topping up of highly indebted poor countries debt relief in the event of further oil price or other price shocks. [186785]
§ John HealeyThe HIPC Initiative is delivering real benefits to participating countries. It is providing over $70 billion of debt relief, to the 27 countries that have reached decision point. It is helping increase annual social expenditures in countries receiving debt relief. Total social spending has increased by around $4 billion since 1999—equivalent to 2.7 per cent. of GDP. On average, health and education spending account for 65 per cent. of the use of HIPC debt relief.
But there are countries that are forecast to exit the initiative with debt-to- export ratios above the HIPC target of 150 per cent. because of factors beyond their control. The UK continues to push for additional relief to be granted to all these countries at completion point ('topping up' relief). We successfully campaigned for Niger and Ethiopia to receive such additional relief, resulting in over $800 million in additional relief for two of the world's poorest countries.
At the recent G8 Summit at Sea Island, the UK successfully pushed for Heads of Government to reaffirm their commitment to the provision of topping up relief for eligible countries at completion point. The 1195W UK also continues to lobby for a change in the topping up methodology to maximise the quantum of topping up relief.
The UK also believes that more must be done beyond the HIPC Initiative to ensure debt sustainability in the world's poorest countries. We are proposing that the international community review further debt relief for the poorest countries, including making better use of IMF gold using a revaluation or off-market transactions, so that, to match bilateral debt relief, which we provide at up to 100 per cent., we can begin to consider how we provi#e multilateral debt relief of up to 100 per cent. as well.
However, all low-income countries will need additional aid to meet the Millennium Development Goals (MDGs). This is why the UK has called for an examination of possible financing mechanisms to provide up to 100 per cent. multilateral debt relief for HIPCs, and continues to push the International Finance Facility (IFF), which could provide the much- needed substantial increase in aid—in the form of grants, concessional loans, or further debt relief—needed to attain the MDGs without threatening the long-term debt sustainability of the world's poorest countries.