§ Ms DrownTo ask the Chancellor of the Exchequer on what basis his Department has calculated that the recently agreed $100 billion debt relief package represents cancellation of two thirds of developing country debt. [104370]
§ Miss Melanie JohnsonThe total debt stock of the Heavily Indebted Poor Countries likely to qualify for relief under the enhanced HIPC initiative as having an unsustainable debt burden after traditional debt relief mechanisms is $143 billion. The enhanced HIPC initiative will reduce the debts owed by these countries by $100 billion, or two thirds.
233WWe want the enhanced HIPC initiative to start a new virtuous cycle of debt relief, poverty alleviation and economic development. The transformation of the IMF's structural adjustment facility into the Poverty Reduction and Growth Facility means that, for the first time, the IMF and World Bank have agreed to stand back and let countries develop their own poverty reduction strategies in partnership with the population and civil society.
Having helped to secure multilateral funding for the initiative, the Government have decided that the time is right to take the extra step of eliminating all the bilateral debts owned to us by the poorest countries. Our pledge of 100 per cent. debt relief for countries qualifying under the HIPC initiative will cover all debts (both pre cut-off date debt and post cut-off date debt) owed to ECGD by these countries.