§ Mr. BurnsTo ask the Chancellor of the Exchequer what progress Her Majesty's Government has made in tackling the problem of developing countries' external debt during 1992.
§ Mr. Nelson[pursuant to his answer, 16 February 1993, c. 122–23]: An incorrect figure was shown in the third paragraph of the answer. For completeness the amended answer is restated in full as follows:
419WHer Majesty's Government have made substantial progress in dealing with developing country debt issues during 1992.
The Government are directly responsible for official bilateral debts. Proposals for rescheduling or restructuring such debts are dealt with multilaterally through the Paris Club of creditor countries.
The Paris Club reached agreements with 18 countries during 1992, involving the rescheduling or restructuring of over US$21.5 billion of bilateral official debt. Three agreements were with middle income countries (Argentina, Brazil, and Bulgaria), and a further four were with lower middle income countries (Cameroon, Ecuador, Jordan, and Morocco) who benefited from more generous rescheduling arrangements involving longer grace and repayment periods (known as "Houston" terms).
I am delighted to announce, however, that the majority of agreements, eleven in all, were concluded on Trinidad terms. The countries concerned were Bolivia, Ethiopia, Equatorial Guinea, Guinea Republic, Honduras, Mali, Sierra Leone, Tanzania, Togo, Uganda, and Zambia. This follows from the Paris Club's decision in December 1991 to begin implementing the initiative of my right hon. Friend the Prime Minister for providing concessional relief to the very poorest indebted countries.
In addition to the countries listed above, Nicaragua and Benin benefited from Trinidad terms in 1991, and Mauritania in 1993, making 14 beneficiaries in all so far.
Trinidad terms provide for the equivalent of cancellation of up to half of the eligible debt consolidated by the agreements. Each agreement contains an undertaking by creditors to consider the case for a reduction in the whole stock of the debtor countries' eligible debt to the Paris Club after a period of proven economic and financial responsibility. During 1992 Trinidad terms agreements covered over US$3 billion of debt entailing the forgiveness of over US$1 billion over the life of the agreements. Including Nicaragua, Benin, and Mauritania, over US$4 billion of debt has been restructured under Trinidad terms, and about US$1½ billion forgiven over the life of the agreements.