§ Mrs. SpelmanTo ask the Secretary of State for International Development which countries her Department estimates will have unsustainable debt burdens after their completing the HIPC Initiative. [91451]
§ Clare ShortThe main aim of the heavily indebted poor countries (HIPC) initiative is to ensure that countries exit the HIPC process with sustainable levels of debt. The current framework of the initiative has the flexibility to provide, when appropriate, additional debt relief at completion point, so called "topping up", to countries whose debt sustainability outlook has changed due to exogenous factors since reaching their decision point. The UK is pressing the World bank and the IMF to widen their approach to topping up, so that any HIPC country facing unsustainable debts, that has demonstrated its commitment to poverty reduction and economic reform, should qualify for this additional relief. Debt relief alone, however, cannot guarantee future sustainability. This requires sound macroeconomic policies, strong growth and export bases, including access to markets of developed countries, access to adequate financing on highly concessional loan and grant terms, and prudent policies on new borrowing. The UK is co-financing a debt strategy project aimed at helping HIPC Governments to strengthen their debt management capacity.
§ Mrs. SpelmanTo ask the Secretary of State for International Development which countries taking part in the heavily indebted poor countries initiative have reached completion point within the time scale established at their decision point. [91452]
§ Clare ShortSix countries have reached their completion point under the heavily indebted poor countries (HIPC) initiative. Of these, five countries—Bolivia, Mauritania, Mozambique, Tanzania and Uganda—reached their floating completion point either within the timescale assumed at decision point or between one and five months after the assumed date. Burkina Faso reached its completion point in April 2002—one year late. The reason for this was the delay in completing its PRSP, and the decision by the World bank and IMF to defer consideration of the completion26W point until spring 2002, in order to reassess the country's external debt position and to update the debt sustainability analysis. As a result of this delay, Burkina Faso became the first country to receive additional relief, so called, "topping up" at completion point, to enable it to exit the HIPC process with sustainable levels of debt.
§ Mrs. SpelmanTo ask the Secretary of State for International Development what recent proposals her Department has made to(a) the World bank and (b) the IMF to reform the HIPC initiative. [91453]
§ Clare ShortThe UK continues to play a leading role in the implementation of the heavily indebted poor countries (HIPC) initiative, to ensure that as many countries as possible benefit from the enhanced framework. Following UK pressure, it was agreed that the World bank and the IMF would provide additional relief to countries that risk exiting the HIPC process with debts above the 150 per cent. debt/exports ratio. This was reconfirmed at the spring meetings in 2002, when Burkina Faso became the first country to benefit from "topping up". Although we welcome this change, it does not go far enough. The UK has proposed that, in calculating topping up, additional bilateral relief should be excluded from the calculations. We also want to see a more flexible interpretation of the rules, so that any HIPC country facing unsustainable debts, that has demonstrated its commitment to poverty reduction and economic reform, should qualify for this additional relief. The UK has also asked the bank and fund to come forward with proposals to promote the full participation of all creditors in the initiative, including technical assistance to HIPC countries facing legal challenges from non-participating creditors.