Written Answers. - Third World Debt.
John McGuinness
Question:
176
Mr. McGuinness
asked the
Minister for Finance
if he will call for the cancellation of world debt during the course of the G8 summit in Okinawa, Japan; his response to the request by Irish organisations and individuals who support this policy; and the Government's policy in the matter.
[15237/00]
As Ireland is not a member of the G8, nor a bilateral creditor of any of the world's poorest countries, it is as a member of the multilateral lending organisations, in particular the World Bank and the International Monetary Fund, that we can best exercise our influence to seek to contribute to easing the debt burden of the heavily indebted poor countries, HIPCs.
The HIPC initiative, driven by the World Bank and the IMF, is the official response to the need for debt relief, particularly at the multilateral level, but also involving substantial, if not complete relief, in respect of official bilateral debt. As originally conceived, the initiative aimed at both (i) freeing the most heavily indebted poorest countries from the burden of the unpayable element of their debt, and (ii) offering them a definitive exit from the debt treadmill which is seriously undermining their development.
Following the recent review of the initiative, it has been substantially enhanced – the amount of debt relief on offer has been doubled, a wider range of countries is to get faster and deeper relief – and my concern now is that these improvements are fully financed.
Ireland was to the fore in calling for such improvements, in particular via the submissions made by the Department of Finance and the Department of Foreign Affairs to the review of HIPC which led to the improvements.
I am aware of the wide public concern for a serious attack on the problem of unpayable debt which is reflected in the extent of popular support for Jubilee 2000.
As far as unilateral debt is concerned, this is best tackled through the HIPC initiative, and while I do feel there is scope for more generosity here, I am not convinced that a blanket call for debt cancellation is attainable.
As far as bilateral debt is concerned, the HIPC initiative also envisages substantial reductions in bilateral debt and I am heartened by the indications that an increasing number of countries are prepared to do so. We have been advocating and supporting this development in our international dealings.
In my opinion the enhanced HIPC initiative is the only realistic mechanism through which multilateral debt relief for Heavily Indebted Poor Countries can be achieved. Successful and timely implementation of the enhanced framework would create an opportunity for further enhancement, which I would fully support and consider vital for future growth and development in HIPC countries. In this regard, I am particularly concerned that the number of countries processed to date falls short of projections under the enhanced HIPC framework and I am also somewhat disappointed at the amount of pledges to the HIPC Trust Fund that have been converted to paid-in contributions. Given these concerns, the Deputy can be assured that I will use my best endeavours to press for the full and speedy implementation of the HIPC initiative, both in terms of the number of countries processed and also its financing.
Deputies will recall that Ireland is contributing fully to the enhanced initiative. We are also participating in the alleviation of bilateral debt relief in relation to some of our priority aid countries even though our own bilateral assistance has been in the form of grants. Ireland contributed £12.1 million in 1999 to the debt relief package and is committed to payment of a further £2.9 million by 2008.
