Vol. 555 No. 2
192 Mr. R. Bruton asked the Minister for Finance if it is his policy to support 100% debt cancellation of heavily indebted developing countries; if he communicated that policy to the IMF and the World Bank at their recent meetings; and the initiatives he plans to gain international support within these institutions for the Irish position. [18370/02]
Ireland's debt strategy for developing countries was launched publicly last July. The debt strategy document, prepared jointly by Ireland Aid and the Department of Finance, was forwarded to Ireland's representatives at the IMF and the World Bank in advance of the recent annual meetings of these institutions. Both executive boards are fully aware of Ireland's policy on developing country debt.
May I remind Deputies of the Government position in relation to debt cancellation as stated in the debt strategy document. We have concluded that, in principle, the total cancellation of the debts of the heavily indebted poor countries is a politically acceptable objective and one that we would support. Total cancellation would, however, have to be funded largely through additional donor contributions. In order to mobilise the necessary funds for total debt cancellation, a greater number of donors, particularly the larger economies, would have to increase their ODA more rapidly and take concrete steps to meeting the UN target of 0.7% of GNP on ODA.
The total cancellation of HIPC debts should be accompanied by strong monitoring and accountability mechanisms to ensure that the additional funds available to HIPC governments, through debt cancellation, would be directly channelled into increased social expenditure, particularly HIV/AIDS, and not abused through corruption.
While we support, in principle, the total cancellation of HIPC country debts we believe that, in practice, the additional donor contributions required to achieve this will be difficult to mobilise. The additional ODA commitments made by major donors, the EU and the US, at the international conference on financing for development would not be sufficient to cover total debt cancellation. In any case, these contributions will be used to fund a number of development activities and not just debt relief.
