Dáil Éireann debate -
Tuesday, 3 Dec 2002

Vol. 558 No. 4

Written Answers. - Debt Policy.

Pádraic McCormack

Question:

200 Mr. McCormack asked the Minister for Finance his views on the new Irish debt policy; the reason he did not communicate Ireland's new debt policy to the IMF and World Bank; the action he will take to ensure these bodies are aware of Ireland's debt policy; and if he will instruct Ireland's representatives to the IMF and World Bank to promote Irish policy vigorously. [24435/02]

Minister for Finance (Mr. McCreevy)

I fully support the debt cancellation policy as set out in the Government strategy document. The Government has 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. 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.

Total cancellation of HIPC debts should be accompanied by strong monitoring and accountability mechanisms to ensure the additional funds available to HIPC Governments, through debt cancellation, would be directly channelled into increased social expenditure, particularly HIV-AIDS.

Since the launch of our debt strategy, officials from Ireland Aid have had consultations in Washington with the Bretton Woods institutions. In addition, officials from my own Department forwarded the debt strategy document to Ireland's representatives at the IMF and the World Bank in advance of the annual meetings of these institutions. The Deputy may also recall the Taoiseach's address to the world summit on sustainable development where he articulated Ireland's policy on cancellation of developing country debt.

It is clear that we have actively promoted our policy internationally at both political and official level. Deputies can be assured that the international community has been made aware of Ireland's policy on developing country debt.

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 monitor closely developments in the HIPC initiative process and to participate actively in all relevant international meetings. Our debt strategy will guide us as we seek to ensure that the HIPC countries efforts to achieve the millennium development goals are not inhibited by a continuing high level of debt and that a sustainable exit from the debt treadmill is secured.