§ Mr. Ieuan Wyn JonesTo ask the Secretary of State for Foreign and Commonwealth Affairs what proportion of developing country debt was scheduled to be cancelled at the outset of the Trinidad terms; and what proportion of total debt has been cancelled to date.
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§ Mr. NelsonI have been asked to reply.
At the Commonwealth Finance Ministers meeting in Trinidad and Tobago in September 1990, my right hon. Friend the Prime Minister, then Chancellor, proposed a reduction in the stock of eligible debt of two thirds. In December 1991, the Paris Club of creditor countries agreed to allow creditors to provide the equivalent of 50 per cent. cancellation of eligible debts consolidated under each agreement. These terms also include an undertaking by creditors to consider a reduction in the stock of eligible debt after a period of proven financial and economic responsibility of three to four years. For some of the most desperately indebted countries this may not prove sufficient, and we therefore take every opportunity to build consensus with our Paris Club colleagues to improve the terms on offer.
Specifically we are eager to see an increase in the amount of debt reduction available where necessary, and earlier action on the stock of eligible debt for debtors who already have a good track record.
§ Mr. Ieuan Wyn JonesTo ask the Secretary of State for Foreign and Commonwealth Affairs (1) what is the total amount of bilateral debt that has been cancelled to date under the Trinidad terms;
(2) if he will list the countries which have benefited to date from the cancelling of bilateral debt under the Trinidad terms, indicating the level of debt cancellation (a) in total and (b) as a percentage of each country's total level of foreign debt.
§ Mr. NelsonI have been asked to reply.
Fourteen countries have so far benefited from the Trinidad terms. The countries are Benin, Bolivia, Ethiopia, Equatorial Guinea, Guinea Republic, Honduras, Mali, Mauritania, Nicaragua, Sierra Leone, Tanzania, Togo, Uganda, and Zambia. (a) Trinidad terms involve the equivalent of cancellation of up to half the eligible debt consolidated under the agreements. We estimate that the agreements so far reached will result in the equivalent of the cancellation of about US$1½ billion of claims over the lives of the agreements. The agreements also commit creditors to take action on the whole stock of eligible debt after a period of three to four years financial and economic responsibility. The amount of debt cancelled will therefore increase as these agreements mature. Unfortunately, answering (b) would entail disclosing confidential details of debtor countries' obligations to their creditors, and is not in any event a useful comparison to make.