§ Dr. TongeTo ask the Chancellor of the Exchequer what proposals for strengthening the Heavily Indebted Poor Countries Initiative he will bring forward at the Spring Meetings of(a) the World Bank and (b) the International Monetary Fund. [105094]
§ John HealeyAt the forthcoming Spring Meetings the UK will continue to promote a flexible approach to the additional debt relief or "topping-up" that may be provided at Completion Point to ensure that countries that have had to contend with exogenous shocks benefit from a lasting exit from unsustainable debt. The UK will be seeking agreement that the calculation of topping-up should exclude the additional bilateral voluntary debt relief, to ensure fairer burden sharing among creditors and provide truly additional relief to HIPCs.
The UK will also be putting forward proposals to encourage greater creditor participation in the HIPC Initiative.
However, even the provision of 100 per cent. debt relief to all low-income countries would still fall short of the resources needed to meet the Millennium Development Goals. This is why the Chancellor and the Secretary of State for International Development have proposed an International Finance Facility (IFF) that would seek to double the amount of development aid from just over US$50 billion a year today to $100 billion per year in the years to 2015. The IFF could also be used to help fund further debt relief for existing debts, which for some poor and indebted countries is a valuable instrument to help achieve the Millennium Development Goals.
§ Dr. TongeTo ask the Chancellor of the Exchequer whether he supports proposals for the lifting of the IMF"s structural requirements on heavily indebted poor countries. [105125]
§ John HealeyThe UK believes that structural reforms should focus on poverty reduction and strongly promotes the streamlining of IMF conditionality. The IMF, with the creation of Poverty Reduction and Growth Facility (PRGF) has been further improving its support to low-income countries. Conditionality has been reduced and streamlined, focusing on key areas of IMF responsibility; further progress has been made in supporting poverty and social impact analysis of key reforms and improved public expenditure management. The IMF is also discussing further improvements in, and increasing alignment of, the PRGF and Poverty Reduction Strategy Paper (PRSP).
To reach Completion Point in the Heavily Indebted Poor Countries Initiative countries must develop a full PRSP, and meet key conditions (or Completion Point triggers), these conditions may include structural reforms that support the country"s strategy for reducing poverty. The UK supports this internationally agreed policy which helps ensure that resources provided through debt relief are used to reduce poverty and create the conditions necessary for economic growth.
The Government acknowledges that debt relief is not a panacea for broader economic development problems; even the provision of 100 per cent. debt relief to all low-income countries would still fall short of the resources 150W needed to meet Millennium Development Goals. That is why the Chancellor and the Secretary of State for International Development have proposed an International Finance Facility (IFF) that would seek to double the amount of development aid from just over US$50 billion a year today to $100 billion per year in the years to 2015.
§ Dr. TongeTo ask the Chancellor of the Exchequer what conditions applying to poor countries seeking to benefit from the International Finance Facility will be included in the Facility. [105095]
§ John HealeyThe proposed International Finance Facility would seek to double aid for the world's poorest countries from US$50 billion a year today to $100 billion a year up to 2015. It provides an opportunity to build on current improvements in the way aid is managed.
The IFF would seek to disburse funds through existing effective bilateral and multilateral mechanisms, which set out their own conditions to ensure that aid is used effectively.
§ Dr. TongeTo ask the Chancellor of the Exchequer whether it is his policy to support an explicit link between debt relief for poor countries and the achievement of Millennium Development Goals. [105126]
§ John HealeyThe UK Government is committed to helping achieve the Millennium Development Goals (MDGs) by 2015. The Government supports the conclusion of the United Nations Financing for Development Conference in Monterrey, Mexico that future reviews of debt sustainability should bear in mind the impact of debt relief on progress towards the achievement of the MDGs.
Debt relief will provide vital finance to help achieve the MDGs, but if overall aid resources were unevenly allocated in favour of debt relief, fewer resources would be available to finance poverty reduction in other countries perhaps equally poor but not highly indebted. It is important to maintain equity between the two thirds of low-income countries that are highly indebted and the other third that are not.
The Government acknowledges that debt relief is not a panacea for broader economic development problems; even the provision of 100 per cent. debt relief to all low-income countries would still fall short of the resources needed to meet the MDGs. That is why the Chancellor and the Secretary of State for International Development have proposed an International Finance Facility (IFF) that would seek to double the amount of development aid from just over US$50 billion a year today to $100 billion per year in the years to 2015.