§ Mr. GardinerTo ask the Chancellor of the Exchequer (1) pursuant to his Answer of 15 May 2003,Official Report, column 377W, on heavily indebted poor countries, whether he will make a detailed proposal for a donor-funded technical assistance facility to provide advice to HIPC countries facing litigation at the forthcoming G8 summit in Evian; [116111]
(2) if he will introduce tax incentives for creditors taking part in the HIPC initiative; [116005]
(3) pursuant to his Answer of 15 May 2003, Official Report, column 377W, on heavily indebted poor countries, what steps have been taken by (a) the IMF and (b) the World Bank since the G7 Kananaskis summit to encourage creditors to take part in the HIPC Initiative; [116109]
(4) pursuant to his answer of 15 May 2003, Official Report, column 377W, what plans he has to amend legislation governing litigation against heavily indebted poor countries; [116112]
(5) pursuant to his answer of 15 May 2003, Official Report, column 377W, on heavily indebted poor countries, what plans he has to convene a conference to discuss with creditors the value of participating in debt relief for heavily indebted poor countries; [116059]
(6) pursuant to his answer of 15 May 2003, Official Report, column 377W, on heavily indebted poor countries, what the implementation status is of each of the commitments from the G7 Kananaskis summit;[116108]
(7) pursuant to his answer of 15 May 2003, Official Report, column 377W, on heavily indebted poor countries, whether the World Bank has drawn up a timetable to investigate options for assisting with HIPC-to-HIPC debt. [116110]
§ John HealeyThe UK government has been at the forefront of the international debate on debt relief issues, and continues to press for the rapid and full implementation of the Heavily Indebted Poor Countries (HIPC) initiative. In particular, the UK is seeking agreement that additional bilateral voluntary debt relief430W should be excluded from the calculation of topping-up at Completion Point in the HIPC initiative, and this rule change could provide a further US $1 billion in debt relief to HIPCs. The UK is also seeking to explore further options to address the issues of creditor litigation within the enhanced HIPC initiative. While the initiative does not alter the legal rights and obligations between HIPCs and their external creditors the UK believes that an adequate HIPC legal defence is still essential in reaching fair and equitable settlements with some creditors. More detail on the steps taken by the IMF and World Bank to encourage creditor participation and the status of commitments on HIPC from the G7 Kananaskis Summit, can be found in the September 2002 HIPC Status of Implementation Report and the March 2003 HIPC Initiative—Statistical Update. Both are available from the World Bank Website www.worldbank.orq/hipc.
On March 12, 2003, the Executive Board of the IMF paper discussed creditor participation issues in the HIPC initiative. The Public Information Notice issued by the IMF on April 3, 2003, for this meeting reported the discussion between Directors on the issue of HIPC-to-HIPC debt:
On HIPC-to-HIPC debt relief, Directors took note of the fact that these claims are concentrated in a few HIPC creditors, and that some creditors have already made commitments to deliver their share of debt relief under the Initiative. Directors agreed that, where resolution of such outstanding claims is hindered by technical issues, the staff should be ready to provide technical assistance when requested by both parties, to help HIPC creditors and debtors themselves resolve these outstanding technical disputes.Many Directors welcomed the proposal of the World Bank staff to establish and administer a trust fund to channel donor assistance to finance HIPC-to-HIPC debt relief. They agreed that such a trust fund should be used in cases where HIPC creditors are unable to deliver their share of HIPC relief owing to financial constraints, in accordance with the principles and conditions set out by individual donors. Others, however, questioned the need for such a fund given the small size of HIPC-to-HIPC debt and the existence of moral hazard issues.The full text of this Public Information Notice is available from the IMF website www. imf.org/external/news.htm. With respect to tax incentives for creditors taking part in the HIPC initiative, corporate loan creditors can already claim relief under the loan relationships regime for losses on the release of debt owed by HIPC countries. The Inland Revenue is not aware of any non-corporate loan creditors.
While the UK continues to work hard to promote the HIPC initiative 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 Millennium Development Goals. That is why the Chancellor has 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.