§ Mr. DenhamTo ask the Secretary of State for Foreign and Commonwealth Affairs what will be the estimated reduction in debt service payments in 1992 on official bilateral debt, from those countries which have received Trinidad terms compared with actual payments made on official bilateral debt by those countries in 1991.
§ Mr. Lennox-BoydThe Prime Minister's 1990 Trinidad terms initiative has so far benefited five of the poorest, most heavily indebted countries. The terms reduce the amount of debt service due over the length of the debtor's current International Monetary Fund programme—usually three years—by around 50 per cent.
Figures for debt owed by or cancelled for any country are confidential. After a framework agreement is reached at the Paris Club, each creditor negotiates a separate bilateral agreement with the debtor. We would need the consent of the authorities in both debtor and creditor countries before we could provide any figures.
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§ Mr. DafisTo ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement outlining the response to the comments made by the World Commission of Environment and Development representatives in London on 24 April on the subject of third world debts; and what action is currently undertaken by his Department to encourage the write-down of third world debts by commercial banks.
§ Mr. Lennox-BoydThe Government believe that for those poorest countries whose efforts to achieve economic growth have been hampered by the heaviest debt burdens, debt relief has an important role to play. Five countries have so far benefited from the Prime Minister's Trinidad terms initiative, which the Paris Club began implementing in December. We continue to press for an extension of the terms offered, along the lines of the Prime Minister's original proposals, and for all creditors to participate in debt reduction.
It is true to say that financial flows to developing countries fell during the 1980s. But the Organisation for Economic Co-operation and Development 1990 survey "Financing and External Debt of Developing Countries", confirmed the recovery in financial flows initiated in 1988–89. Recent experience in Latin America shows that determined adjustment and policy reform efforts in Mexico and Chile, for example—can quickly attract considerable amounts of external private funds and export credits. Provisional OECD figures show that, when all financial flows are considered, developing countries received $46.4 billion more in 1990 than they paid out.
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. The Government fully support decisions to allow the IMF and World bank to provide some of their resources directly in support of commercial bank debt reduction, through the Brady plan and the International Development Association's debt reduction facility. The United Kingdom is financing its share of IMF and World bank resources involved.