Written Answers. - Debt Cancellation.

Dan Boyle

Question:

85 Mr. Boyle asked the Minister for Finance the Government's position on debt cancellation. [22086/02]

Dan Boyle

Question:

86 Mr. Boyle asked the Minister for Finance the reason he did not address the issue of debt cancellation in his speech to the International Monetary Fund and the World Bank AGM in Washington on 29 September. [22087/02]

Dan Boyle

Question:

87 Mr. Boyle asked the Minister for Finance the action he intends to take to ensure that the attention of the IMF and the World Bank has been drawn to the Government's policy on debt cancellation. [22088/02]

Dan Boyle

Question:

88 Mr. Boyle asked the Minister for Finance if he intends to instruct Ireland's representatives to the IMF and the World Bank to promote the Irish policy on debt cancellation. [22089/02]

I propose to take Questions Nos. 85 to 88, inclusive, together.

The Government's position on Ireland's debt strategy for developing countries was prepared jointly by Ireland Aid and my Department and was issued in July. We 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 have to be funded largely through additional donor contributions. To mobilise the necessary funds for total debt cancellation a greater number of donors, particularly the larger economies, would have to increase their overseas development aid 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.
While in principle we support the total cancellation of HIPC country debts we believe the additional donor contributions required to achieve this will be difficult to mobilise. The additional ODA commitments made by major donors, the EU and US, at the International Conference on Financing for Development would not be sufficient to cover total debt cancellation. These contributions will be used to fund a number of development activities and not just debt relief.
The debt strategy document 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 aware of Ireland's policy on developing country debt.
Since the launch of the debt strategy we have had consultations in Washington with the World Bank and the IMF. The Taoiseach reiterated our commitment, in principle, to debt cancellation in his address to the world summit on sustainable development in Johannesburg in September. In October we participated in a World Bank meeting convened to discuss the current financing gap that has arisen in the HIPC trust fund.
My Department, in close co-ordination with Ireland Aid, will continue to promote our views on debt relief in all relevant international fora. We will also continue to closely monitor developments in the HIPC initiative process and to participate actively in all relevant international meetings.