Dáil Éireann debate -
Wednesday, 18 Jun 2003

Vol. 568 No. 6

Written Answers. - Overseas Development Aid.

Dan Boyle

Question:

198 Mr. Boyle asked the Minister for Finance the action which was taken during 2002 to remedy matters (details supplied); if examples can be given of countries in which such alternative policies have been discussed with the IMF; and the outcome of such discussions. [17192/03]

Minister for Finance (Mr. McCreevy):

Both the IMF and the World Bank produce copious information in written form on their activities, much of this being released on their relevant websites, which give information on their contacts with member states.

In July 2002, Ireland Aid and the Department of Finance published a joint debt strategy. This updates and develops the Government's position on the debt crisis that was issued in September 1998.

The strategy raises a number of concerns about the operation of the HIPC initiative such as the adequacy of the existing level of debt relief and the projections and assumptions used in the calculation of sustainable debt levels. The bank and the IMF have admitted that a significant number of the countries emerging from the HIPC process will continue to have unsustainable debt levels. Ireland also believes that the impact of HIV-AIDS on the economies of HIPC countries should be taken into account in assessing debt relief. The poverty reduction and growth facility is also being reviewed by the IMF.

Since the launch of the debt strategy document, we have had consultations in Washington with the World Bank and the IMF and have discussed with them our views on the progress of the HIPC initiative, on the issue of debt cancellation and other issues. We have also briefied Canada, the leader of our constituency at the Bretton Woods institutions, on our ideas. The Taoiseach reiterated our commitment in principle to debt cancellation in his address to the World Summit on sustainable development in Johannesburg in October 2002. The Taoiseach also gave a lecture at the World Bank recently which outlined our concerns. Ireland participated in a World Bank meeting convened to discuss the current financing gap that has arisen in the HIPC trust fund.

We will 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.

At the launch of the Government's "Policy on Developing Country Debt", Minister of State at the Department of Foreign Affairs, Deputy Tom Kitt, announced a commitment of £1.5 million over three years, to support the activities of Debt Relief International, a non-profit making organisation which helps countries to manage their borrowing and their existing debts. This should increase the latter's capacity to represent their own interests in the PRGF and PRSP processes.