G8 debt relief plan welcomed as step forward

UN Secretary-General Kofi Annan on Monday welcomed what he called “very significant commitments” towards providing relief for the world’s heavily indebted poor countries at the G8 Summit in Cologne at the weekend. He also expressed the hope “that financial resources will be made available shortly to implement the proposed measures,” according to a UN statement. World leaders at the G8 Summit - seven of the world’s richest countries, plus Russia - agreed at the weekend to relaunch the Highly Indebted Poor Countries (HIPC) initiative as a vehicle for faster, deeper and broader debt relief. According to a final communique, the central objective of the initiative was “to provide a greater focus on poverty reduction by releasing resources for investment in health, education and social needs.” The agreement means that up to US$ 70 billion could be cut - US$ 50 billion in trade debts backed by government guarantees and a further US$ 20 billion in Overseas Development Assistance (ODA) lent on concessional terms - from the debt of the world’s countries, Reuters news agency on Monday quoted French President Jacques Chirac as saying. Jubilee 2000, an international debt-relief advocacy group, also welcomed the plan. But a spokesman, John Garrett, told IRIN on Tuesday that many poor countries had gained nothing and that “a bolder programme” was required. Jubilee 2000 estimated that Rwanda, for instance, could see its debt service burden reduced by between a half and two-thirds, and Uganda and Ethiopia between a third and a half, but that other countries targeted for help, such as Congo and Tanzania, would receive no significant debt service relief. “The debt problem has certainly not been solved by the Cologne Summit,” Garrett said.