Jim O'Keeffe
Question:79 Mr. J. O'Keeffe asked the Minister for Finance the reason for his stance on the campaign for the cancellation of the unpayable debts of the world's poorest countries. [9341/01]
Written Answers. - HIPC Initiative.
I am aware of the campaign by Jubilee 200 and the Debt and Development Coalition Ireland in favour of the outright cancellation of the unpayable debts of the world's poorest countries. The Government is highly sympathetic to the plight of the heavily indebted poor countries and continues to work for the most generous and flexible application of the HIPC initiative.
As Ireland is not a bilateral creditor of any of the world's poorest countries, nor a member of the G8, 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, but I am not convinced that a blanket call for total debt relief for all the HIPC countries is feasible at least as far as multilateral debt is concerned.
The HIPC initiative envisages substantial reductions in both multilateral and bilateral debt and I am heartened by the indications that an increasing number of countries are prepared to write-off their bilateral debts. With our co-constituents of Canada and the Caribbean countries we have been pressing for the greatest possible degree of generosity to be shown in order to bring faster and more effective progress on poverty reduction.
More generally, we cannot have a situation where countries that are committed to good governance and tackling poverty are, even after full HIPC relief, still spending a significant proportion of their budget on debt servicing, or more than on their social programmes. In this context I stressed in my speech to the 2000 annual meetings in Prague that the parameters of the HIPC initiative should be kept under review, with a view to appropriate remedial action where necessary.
I also indicated to our representatives that a further enhancement of the terms of the HIPC initiative may be required in order that human development indicators are taken into account when calculating debt service sustainability, so that expenditure on social services is assured before any debt service is deemed to be payable.
While debt has been a significant constraint for many poor countries it is only one element in the development matrix. We should not lose sight of the broader perspective and of the need to underpin development over as wide a front as possible, particularly at a time when total overseas development aid is being constrained. Ireland has been to the fore in recent times in recommitting to the UN target of 0.7% of GNP.
I assure the House that I will continue to work for the maximum possible degree of generosity to be shown toward all HIPC countries and for the HIPC initiative to be implemented so that it achieves it original objective of giving the countries concerned an exit from the burden of unsustainable debt.