§ Mr. PikeTo ask the Chancellor of the Exchequer what plans he has to pursue reform of the heavily indebted poor countries—HIPC—initiative; with particular reference to the use of the debt to export ratio as a measure of debt sustainability; and if he will make a statement. [111567]
§ John HealeyWithin the enhanced HIPC initiative it is essential to have clear and transparent rules for the provision of debt relief, and the debt to export ratio is a useful indicator of debt sustainability. However, looking forward, after the provision of debt relief, such a broad measure may not always be appropriate in assessing country plans to finance their Poverty Reduction Strategies, and the associated level of borrowing. In particular the UK is concerned that enforcing the debt to export ratio could constrain the ability of some developing countries to access their allocation of concessional finance. The UK is working closely with the IMF and the World Bank to develop a more integrated approach to debt sustainability for financing poverty reduction. The Government acknowledges that debt relief is not a panacea for broader economic development challenges 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 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 $50 billion a year today to $100 billion per year in the years to 2015.
§ Mr. PikeTo ask the Chancellor of the Exchequer if the UK Government will support measures to tackle the shortfall in the HIPC Trust Fund at the forthcoming G8 summit; and if he will make a statement. [111574]
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§ John HealeyAt the 2002 summit in Kananaskis the UK helped secure agreement from the G7 to fund the shortfall in the enhanced HIPC initiative, recognising that it could be up to US $1 billion. Ahead of the Annual Meetings of the IMF and World Bank in September 2002, the UK pledged its share of the $1 billion shortfall, $120million, to encourage other donors to make firm pledges. Donors have now made pledges totalling some $850m, and the 2003 Spring Meetings urged donors to translate these into concrete contributions in the coming months.
At the forthcoming G8 summit the UK will push for a change in the rules of the enhanced HIPC initiative to exclude additional voluntary bilateral debt relief from the calculation of any additional debt relief or topping up at Completion Point. This measure could provide an estimated $1 billion extra debt relief to HIPCs.
The Government acknowledges that debt relief is not a panacea for broader economic development challenges 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 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 $50 billion a year today to $100 billion per year in the years to 2015.