G-7 sues for cancellation of HIPC bilateral debts

Finance ministers of the seven largest economies have called on other bilateral creditors to join them in offering a 100 percent cancellation of all eligible debts owed to them by the Heavily Indebted Poor Countries (HIPC), PANA reported on Sunday. The ministers from Canada, France, Germany, Italy, Japan, the UK and the US issued the call at a meeting of the World Bank and International Monetary Fund (IMF) that began on 26 April in Washington. According to the report, experts noted that while the position of the G-7 strengthened the call for total cancellation of poor countries’ debts, it covered only bilateral debts and not those owed to the IMF and World Bank. The report quoted some African ministers at the conference as saying they would rather have a 100 percent cancellation of debts owed to the IMF and World Bank, preferring other actions by bilateral donors. Malawi and Mozambique, which are defined as HIPCs, could benefit from such moves. But the IMF and World Bank, which initiated the debt relief programme for HIPCs in 1996 and have contributed part of their resources to it, have argued that they would go bankrupt if they offered 100 percent forgiveness of the debts owed to them. On their part, the G-7 ministers were quoted as saying they were ready for further discussions on moving beyond debt relief as they prepare for the next G-7 meeting later in the year. “In this context, we underscore the importance of focusing on steps to increase opportunities for trade, foster more favourable environments for attracting private investment and promote efficient and coordinated investment in the social sector, as we work toward the International Development Goals,” they said in a statement.