§ Lynne JonesTo ask the Secretary of State for International Development what assessment she has made of the role of debt reduction in achieving 2015 goals on poverty reduction. [29704]
§ Clare ShortIn the 41 heavily indebted poor countries, the heavy burden of servicing debt reduces the resources available for tackling poverty and offsets the benefits of development assistance. There is in these countries a strong link between debt relief and poverty reduction. Following debt relief, the social expenditures of HIPC countries are projected to rise by an average of some $1.7 billion per year. On average, a quarter of this increased social expenditure will go towards health schemes directed at HIV/AIDS and diseases like malaria and tuberculosis, with 40 per cent. being directed towards education. HIPC countries will spend on average much more on such priority social investments than on debt service. This will directly benefit the poor in those countries.
However, while debt relief for the HIPC countries is a necessary condition for poverty reduction, it is not enough. Huge numbers of poor people live in countries which are not heavily indebted, particularly in south Asia. It is vital that their needs are not neglected as a result of 7W our efforts to help the HIPC countries. In addition to debt relief, many other factors are important for reducing poverty. These include the Governments' own policies, the levels of development assistance they receive and their ability to attract foreign direct investment, to capture the benefits of trade and to create an environment where the domestic private sector can flourish. The UK is working to address all of these at the international level and through our partnerships with developing countries.