Ruairí Quinn
Question:55 Mr. Quinn asked the Minister for Foreign Affairs the action the Government proposes to take in the pursuit of the cancellation of Third World debt as sought by the Jubilee 2000 Campaign. [25517/99]
Written Answers. - Third World Debt.
One of the most serious challenges facing the international community is that of the debt burden on developing countries, especially the poorest. Debt repayments required of many heavily indebted poor countries or HIPC's are greatly in excess of development assistance flows. The efforts of many of the most impoverished countries to achieve sustainable development are frustrated by their level of indebtedness. This is unacceptable and calls for a positive and comprehensive response by the international community.
The issue of the debt burden in the developing world is one in which I have long taken a keen interest. The Government is very conscious of the extent of public support for the Jubilee 2000 Campaign which is calling for debt cancellation. The Minister for Foreign Affairs, in his address to the 54th General Assembly of the United Nations, recognised the strength of international concern about the debt of poor countries including the urgent demands for debt forgiveness. He informed the General Assembly of the Irish Government's decision last year to direct resources to both bilateral and multilateral debt relief, and also to make it integral to Ireland's overall development co-operation strategy.
While recognised as well-intentioned, the HIPC debt initiative launched by the Bretton Woods institutions in 1996 failed to make a significant impact in the majority of the heavily indebted poor countries. There have, however, been positive developments on the debt front over the course of recent months.
The annual general meeting of the World Bank and IMF in Washington in September agreed an enhanced HIPC initiative which is a significant advance on its predecessor. By relaxing the criteria for eligibility, the new initiative is expected to double the amount of debt relief available under the initiative and to increase the number of recipient countries from 29 to 36. The enhanced initiative strengthens the relationship between debt relief and poverty alleviation. In this respect, it reflects one of the central points raised in our own national submission to the HIPC review. As part of the new initiative, each recipient country will produce a "poverty reduction strategy paper", designed to ensure that the resources freed by debt relief will be of direct benefit to those in the greatest need.
If it is to make a real difference, the enhanced HIPC must receive the funding it requires as soon as possible. In that connection, Ireland is advocating that the most generous possible EU support be made available to the enhanced HIPC initiative. The General Affairs Council is close to agreement on a package which would provide an EU contribution of 1 billion to debt relief and a further 250 million for structural adjustment.
Many heavily indebted poor countries have undertaken major structural reforms to their economies in order to qualify for debt relief. Under the enhanced initiative, debt repayments by these countries should fall to a level which is sustainable and which do not deflect scarce resources from important social sectors such as health and education. The impact in recipient countries will be extremely positive.
The total cancellation of debt in developing countries raises a number of difficult and complex questions. Debt alleviation cannot be considered in isolation. Issues such as internal conflict, corruption, poor governance and human rights abuses can sometimes play a part. It is natural that creditor governments, who will be expected to pay very substantial moneys in support of debt relief, will want assurances that resources are directed to the alleviation of poverty.
Although not a bilateral creditor of the developing countries, Ireland strongly welcomes measures, be they through debt relief or debt cancellation, which serve to ease the burden. At a national level, we have mobilised IR£31 million to help relive the debt burden of heavily indebted poor countries. We have contributed IR£9.5 mill ion to debt relief in Tanzania and Mozambique, both of which are priority countries for Irish aid. Funds amounting to IR£22 million have been channelled through the World Bank and the IMF to finance the HIPC initiative.
Apart from its strong support for reform of the HIPC initiative, the Government continues to argue for a generous and flexible approach to heavily indebted poor countries by creditor nations, the Bretton Woods institutions and other relevant bodies. Ireland will continue to press for a vigorous and intensified programme to tackle this major obstacle to development.