Debt Reduction

HC Deb 28 March 1991 vol 188 cc493-5W

Mrs. Clwyd

To ask the Secretary of State for Foreign and Commonwealth Affairs what action Her Majesty's Government are taking to encourage Paris Club members to give positive consideration to the Trinidad terms.

Mrs. Chalker

There is a growing consensus among Government creditors on the need to adopt a more generous treatment for the poorest countries than the maximum one-third debt reduction afforded by the Toronto terms. The need for a stock of debt approach is also increasingly being realised. Her Majesty's Government will continue to urge other creditors to agree quickly to a new treatment containing the most important elements of the United Kingdom proposals, launched by my right hon. Friend the Prime Minister, as Chancellor, in Trinidad last September.

Mrs. Clwyd

To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list the Stabex replenishment obligations owed by all African, Caribbean and Pacific countries indicating which obligations are covered by the proposed debt reduction scheme put forward by Commissioner Marin.

Mrs. Chalker

The latest figures available from the Commission show the value of all actual and potential reconstitution obligations by the developing countries under Stabex as 899 mecu. (One mecu is worth approximately £0.7 million.)

There are three categories, as follows:

Transfers for which reconstitution requirements have not already been notified	Mecu
Jamaica	4.3
Madagascar	0.4
Senegal	49.5
	54.2
Transfers for which reconstitution requirements have not yet been decided by the ACP-EEC council of Ministers
Congo	7.4
Fiji	2.1
Gabon	5.7
Ghana	25.6
Liberia	7.6
Madagascar	1.7
Senegal	66.1
	116.2
Transfers for which it is not yet possible to determine what proportion would be repayable (which will depend on the trend in prices for the commodities covered, the quantities exported and the competitiveness of the ACP countries
Cameroon	180.8
Cote d'Ivoire	311.0
Fiji	0.7
Gabon	3.1
Ghana	47.6
Kenya	61.5
Madagascar	5.5
Mauritius	2.9
Papua New Guinea	80.8
Senegal	34.7
	728.6
Total	899.0

All of the above transfers are covered by the provision of the proposed debt reduction scheme put forward by Commissioner Marin.

Mrs. Clwyd

To ask the Secretary of State for Foreign and Commonwealth Affairs whether he will make it his policy to encourage greater flexibility in repayments and a reduction of International Monetary Fund and World bank debt.

Mrs. Chalker

All creditors regard the preferred creditor status of the international financial institutions as an integral part of the debt strategy. Flexibility in repayment of arrears to the International Monetary Fund would weaken its liquidity and threaten its financial standing. Any similar move on World bank debt would jeopardise the very favourable terms on which it can currently obtain finance from the market, and therefore increase interest charges to all its borrowers.

Mrs. Clwyd

To ask the Secretary of State for Foreign and Commonwealth Affairs what action Her Majesty's Government are taking to encourage a response from banks on commercial debt comparable to Paris Club action on official debt, as outlined by the Prime Minister, then Chancellor of the Exchequer, in his Trinidad terms speech on 19 September 1990.

Mrs. Chalker

Arrangements for dealing with commercial bank debt must be a matter for the parties to the loans to negotiate between them, but we continue to urge comparability of treatment between official and commercial debt. We welcome the increasing use of debt reduction in commercial debt deals negotiated under the "Brady initiative".