US softens line on debt relief
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Gordon Brown yesterday hailed a breakthrough in securing more generous debt relief for the world’s poorest nations after the Bush administration signalled a softening of America’s position. With the White House keen to secure backing for writing off Iraq’s $90bn debt mountain, Mr Brown believes there is a “window of opportunity” for struggling countries in Africa and Latin America to receive more help. The chancellor said there was a possibility for 12 countries affected by past conflicts to be included in the highly indebted poor country initiative and for nations that had already received debt relief under the HIPC scheme to receive more generous terms. “I’m hopeful that our proposal will gain support”, Mr Brown said. The HIPC initiative was designed to offer poor countries a fresh start, but Mr Brown said many had - through no fault of their own - been adversely affected by changes in commodity prices, exchange rates and discount rates. Up until now, the US has insisted on looking at countries on a case-by-case basis, but has accepted that the price of debt relief for Iraq may be a better deal for the 42 HIPC countries. Debt relief is seen as one of the elements of a package needed if poor countries are to meet the development goals set by the United Nations for 2015. James Wolfensohn, the president of the World Bank, said yesterday much remained to be done and time was running out if the goals were to be met. “On current trends, most of the goals will not be met by most countries.” Aid agencies said they remained sceptical about whether the US had substantially shifted on debt relief, but Mr Brown said he expected progress at meetings over the summer culminating in the annual meetings of the World Bank and IMF in the autumn. |