Chancellor welcomes ‘historic’ debt agreement
Gordon Brown has welcomed a historic agreement to cancel billions of dollars of debt owed by the world’s poorest nations.
The Chancellor secured the deal during a meeting of finance ministers from the G8 group of leading industrialised nations, which took place in London today.
Despite apparent opposition from France and Germany, the group agreed to write of $55 billion (£30 billion) of debt owed by 38 countries after the United States gave its backing to the plan.
Under the agreement, debts worth $40 billion, owed by 18 of the world’s poorest nations, will immediately be written off.
A further nine countries will qualify for assistance within 12 to 18 months, when a further $11 billion of debt will be cancelled.
Cancelling the debts owed by developing countries to the International Monetary Fund, World Bank and the African Development Fund will cost the British taxpayer £500m over ten years.
Mr Brown, said the agreement had “set the stage” for the G8 summit which will be held at Gleneagles in Scotland next month.
“This is not a time for timidity but a time for boldness and not a time for settling for second best but for aiming high,” he said.
Adding that international finance ministers had also discussed new efforts to tackle Aids and promote fairer trade in the developing world, the Chancellor added: “We are presenting the most comprehensive statement that finance ministers have ever made on the issues of debt, development, health and poverty.”
Mr Brown said there had also been agreement to develop his plans for an International Finance Facility (IFF) to boost the amount of aid given to Africa.
He believes it could help the developing world lift itself out of poverty and help African nations invest in healthcare and education by allowing them to borrow money against future aid contributions.
The White House has not yet agreed to the plan, but the Chancellor earlier indicated that while it was preferable for the US to give its support to the IFF, he would press ahead regardless.
“We have said before that it is possible for this facility to go ahead with a number of countries but not all countries, though of course it would be preferable if the richest countries were able to come together,” he told Today .
