Brown confirms debt relief agreement
A meeting of the key International Monetary Fund (IMF) policymaking committee in New York agreed a deal on Saturday to cancel the multilateral debt of some of the world’s poorest countries.
Chancellor of the exchequer Gordon Brown, who chairs the committee, announced the details of a plan to wipe out a debt of around $40 billion (£22 billion) owed to the IMF, World Bank and other development banks by 18 countries.
The proposals for such debt-forgiveness were agreed by the Group of Eight of the world’s most industrialised and wealthy nations at Gleneagles in July, but they required the endorsement of the financial organisations before being implemented.
At the end of Saturday’s meeting, Mr Brown announced to reporters: “Agreement is now reached on all the elements.”
“The (IMF) managing director has informed the committee that he will call together the executive board to complete the approval of the arrangements to deliver debt relief by the end of 2005.”
Policymakers from the World Bank are due to meet on Sunday, and are expected to follow the decision of the IMF panel, which could result in the cancellation of up to $55 billion of debt.
It had been feared that other non-G8 nations would not be convinced of the desirability of the proposals, which are mainly beneficial to African nations.
Concerns had been raised that the World Bank would not receive compensation for the cancelled repayments, and would therefore be unable to commit to further lending to impoverished countries.
Speaking before flying out to Washington for talks with the International Monetary Fund (IMF) and the World Bank, international development secretary Hilary Benn told BBC Radio 4’s Today programme: “It is a very, very important deal. But there are other countries represented on the Word Bank board in particular and they need to support it too.”
The countries now set to benefit from the removal of their debt include Bolivia, Ethiopia, Ghana and Zambia.
