§ Mr. DafisTo ask the Chancellor of the Exchequer what progress has been made towards the complete write-off of official debts of lower income countries to the United Kingdom.
§ Mr. NelsonTo date, five countries have benefited from the Prime Minister's Trinidad terms debt reduction initiative—Benin, Bolivia, Equatorial Guinea, Nicaragua, and Tanzania. A number of other heavily indebted, low-income countries are expected to receive Trinidad terms in the coming months. Under current Trinidad terms agreements, 50 per cent. of eligible debt is written 233W off, and creditors commit to consider reducing the whole stock of debt in three to four years' time if the debtor country keeps to its agreements with the International Monetary Fund and the Paris club. The Government also participated in a Paris club agreement in 1991 to write off 50 per cent. of the whole stock of Egypt's official bilateral debt.
The Government believe that Trinidad terms should be further developed, along the lines of the Prime Minister's original proposals for the poorest and most heavily indebted countries—all creditors should participate in debt reduction, debt reduction should be increased from 50 per cent. to a benchmark of two thirds, and debt stock reductions should be brought forward. While the Government do not believe that it is necessary, or in the long-term interests of the debtors themselves, to write off their debts completely, the Overseas Development Administration has cancelled most of the debt of the poorest countries arising from aid loans.
§ Mr. DafisTo ask the Chancellor of the Exchequer if he will make it his policy to look at the feasibility of debt-for-nature swaps as a part of the debt retirement process
§ Mr. NelsonThe Government welcome debt-for-nature swaps as an innovative approach to market-based debt reduction in cases where additional resources are made available for environmental projects. As far as the Government's own programmes are concerned, we have to date judged it more effective to deal with debt relief and assistance for environmental projects overseas separately, through the Paris club and through our aid programme.