§ Mr. Laurence RobertsonTo ask the Chancellor of the Exchequer if he will make a statement on progress with cancellation of Third World debt by(a) the UK and (b) other countries. [129744]
§ Mr. BoatengThe UK government have 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.
Of the 38 countries that stand to benefit from enhanced HIPC debt relief, there are now 27–23 from Africa and 4 from Latin America—that already benefit from debt relief, which will amount in total to over $70 billion. This is a significant step towards achieving the $100 billion commitment made at the Cologne summit in 1999, and will reduce their debts to below the average for developing countries. For these 27 countries, the UK is providing 100 per cent. relief on their debts. Furthermore, the Chancellor has announced that any payments from countries yet to reach Decision Point would be held in trust for the day they can be returned to fund poverty reduction. Since 1999, the total UK commitment to multilateral institutions such as the World bank, the African Development Bank and the International Monetary Fund (IMF) to support the HIPC initiative has been $474 million.
At their recent Summit in Evian, G8 governments reaffirmed their commitment to the HIPC initiative. They recognised the need to encourage and assist eligible countries in taking the steps necessary to complete the HIPC process. They urged the IMF and World bank to intensify their efforts to secure full 606W participation of all creditors in the initiative, and reaffirmed their objective of ensuring debt sustainability for countries reaching completion point. Following on from discussions at Evian, the Chancellor will be working with other G7 Finance Ministers to agree the methodology for calculating the amount of "topping-up" debt relief available to countries. The UK has been pushing for a change in the rules of HIPC to exclude additional voluntary bilateral debt relief from the calculation of topping-up at Completion Point and the Chancellor will be working with other G8 Finance Ministers to review mechanisms to encourage good governance and the methodology for calculating the amount of topping-up debt relief available to countries—a measure that could provide an estimated $1 billion extra debt relief to HIPCs. In addition, the Treasury and the Department for International Development is seeking international support to establish the International Finance Facility, which could raise $50 billion annually to fund the Millennium Development Goals. This money could be disbursed in the form of concessional loans and grants, including debt relief.