Tuesday, 27 May 2014

Questions (15)

Maureen O'Sullivan


15. Deputy Maureen O'Sullivan asked the Minister for Finance if he will act in support of a range of countries around the world that are experiencing debt distress by raising their cases through Ireland's membership of the World Bank and IMF and through relevant regional banks which lend to those countries; if he will pay particular attention to the Caribbean region where this month the Caribbean Community, CARICOM, called for debt cancellation and wider economic justice measures for the region, which experienced an average debt-to-GDP ratio of 70% in 2012, increasing to more than 90% for the Eastern Caribbean Currency Union; and if he will make a statement on the matter. [23046/14]

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Written answers (Question to Finance)

Ireland is recognised internationally for its contribution to the fight against global poverty and hunger and its leading role in making international aid more effective.  We have played a strong role in the development of an international consensus on the issue of debt cancellation for the least-developed countries.

Through its participation in the International Monetary Fund (IMF) and World Bank, Ireland is supportive of efforts to help countries suffering debt distress. For example, in 2006, Ireland demonstrated its commitment and leadership in the area of debt relief by contributing its full financial share of over €116 million to the two main multilateral initiatives to address debt relief, the Heavily Indebted Poor Countries Initiative and the Multilateral Debt Relief Initiative, while other States opted to pay for this debt cancellation over a much longer period and in smaller instalments. Furthermore, Ireland has pledged its share of the profits from recent IMF gold sales, totalling 12.94 million SDR (Special Drawing Rights), the asset reserve used by the IMF, which equates to some €15 million. This will subsidise lending to low-income countries, which may currently borrow at zero interest from the Poverty Reduction and Growth Trust (PRGT), the IMF's concessional lending vehicle.

As more and more countries graduate from the multilateral debt relief initiatives, the question of how they can maintain their debt at sustainable levels has become more relevant.  It is for this reason that Ireland contributes €100,000 annually to the Debt Management and Financial Analysis System programme operated by the United Nations Conference on Trade and Development (UNCTAD) and which provides software solutions and technical assistance to developing countries to manage their debt sustainably.

As the Caribbean countries are not priority countries for Irish Aid - which supports the world's poorest countries, focusing in particular on sub-Saharan Africa - there is not a specific focus on the Caribbean region.  However, Ireland has been supportive of the Caribbean countries, particularly those dealing with emergencies, and has contributed to a number of funds established for these humanitarian causes. I understand that the Caribbean countries are already engaged directly with the IMF and the World Bank regarding issues specific to their needs. As a member of the World Bank and the IMF, Ireland has played a strong role in the development of a consensus regarding the debt position of the least-developed countries. This has involved initiatives such as the Poverty Reduction and Growth Trust, the Heavily Indebted Poor Countries and the Multilateral Debt Relief Initiative, for which several Caribbean countries are eligible. Ireland will continue to support these countries by ensuring that debt sustainability remains a priority on the international agenda.

Question No. 16 answered with Question No. 12.