HC Deb 02 March 1992 vol 205 cc23-4W
Mrs Clwyd

To ask the Chancellor of the Exchequer (1) what the estimated total value of debt relief will be for countries which recieved the Toronto terms if they were all to receive the same terms as recently agreed by the Paris Club for Nicaragua;

(2) how much debt relief would be given by the United Kingdom Government if all the countries which received relief under the toronto terms were to receive the same terms as recently agreed by the Paris Club for Nicaragua.

Mr. Maples

The actual value of debt relief under the terms of a Paris Club agreement is dependent on a number of factors which are not known in advance of the conclusion of the agreement. However, the agreement concluded with Nicaragua in December of last year provided for the reduction by 50 per cent. of eligible debts.

Mrs Clwyd

To ask the Chancellor of the Exchequer what discussions he has had with the United States Government on the adoption of option A of debt relief agreements reached in the Paris Club of the kind agreed with Nicaragua last December.

Mr. Maples

The United States Government are aware at the highest level of the United Kingdom Government's objectives in this area. These objectives are the full implementation of Trinidad terms by all creditor countries at the Paris Club. Treasury officials are in regular contact with their United States counterparts, and will continue to pursue this matter vigorously.

Mrs Clwyd

To ask the Chancellor of the Exchequer if he will set out the criteria for debtor countries' eligibility to receive the Trinidad terms of debt relief.

Mr. Maples

There are no formal criteria for eligibility for any set of debt restructuring terms at the Paris Club. The Trinidad terms are designed for a similar group of countries to the Toronto terms. These countries were informally designated as those very poor and heavily indebted countries with chronic balance of payments problems that render the country unable to service debts on conventional terms. It is a pre-condition of any agreement at the Paris Club that the debtor country has a strong economic adjustment programme in place supported by the IMF. Eligibility is determined on a case-by-case basis.

The 20 countries which have benefited from the Toronto terms between October 1988 and June 1991, are as follows: Benin, Bolivia, Burkino Faso, Central African Republic, Chad, Equatorial Guinea, Guinea, Guinea Bissau, Guyana, Madagascar, Mali, Mauritania, Mozambique, Niger, Senegal, Tanzania, Togo, Uganda, Zaire and Zambia. Since December 1991 four countries have further benefited from the Trinidad terms. These are Nicaragua, Benin, Tanzania and Bolivia. More are expected to follow.

Mrs Clwyd

To ask the Chancellor of the Exchequer how much the United Kingdom is owed by those countries which have received the Toronto terms of debt relief.

Mr. Maples

Taking into account the effect of debt reduction under the Toronto terms, the total of debt owed to the United Kingdom Government by the countries which have benefited from Toronto terms is £870 million, comprising £755 million of claims and outstanding interest on those claims owed to ECGD and £115 million owed to ODA.