Vol. 517 No. 6
142 Dr. Upton asked the Minister for Foreign Affairs the plans, if any, he has to review the operation of the Heavily Indebted Poorest Countries Initiative; the speed with which this programme is helping the world's poorest countries; and if he will make a statement on the matter. [10944/00]
At their annual meeting in September 1999 the World Bank-IMF agreed on extensive revisions to the original – 1996 – HIPC Initiative on debt relief. These reforms ease the conditions under which debt relief is granted. They strengthen the relationship between debt relief and poverty alleviation. In this respect, the enhanced HIPC reflects one of the central points raised in Ireland's own national submission to the HIPC review, i.e. the resources freed by debt relief should be of direct benefit to those in the greatest need.
Under the enhanced HIPC Initiative, debt repayments by countries which have undertaken economic reforms should fall to a level which is sustainable and which do not deflect scarce resources from important social sectors such as health and education. It is hoped that by the end of 2000 almost 30 of the 40 HIPC countries should have qualified for debt relief under the enhanced HIPC.
Ireland, which was critical of the original HIPC Initiative, sees the enhanced HIPC as a significant advance on its predecessor and an important step forward in tackling debt. In February 2000 the first HIPC's to receive debt relief under the enhanced initiative were approved by the World Bank and IMF. Bolivia, Uganda and Mauritania were each judged to have met the criteria for relief and will receive a total of $3.7 billion in debt service relief over the next ten to 15 years.
In the last week, debt relief for Tanzania and Mozambique, two of Ireland's priority countries, has also been approved under the enhanced HIPC. The IMF and IDA will start providing interim debt relief in April. The enhanced HIPC Initiative will help Tanzania and Mozambique to advance their poverty reduction programs and stimulate economic growth. In the case of Mozambique, the front loading of debt relief will release funds to assist in reconstruction after the recent severe floods.
In parallel with these developments, a number of major bilateral creditors, UK, Italy, France and Germany, have said they will write off most or all of their bilateral credits to countries meeting the criteria for relief under the HIPC.
Although the HIPC Initiative is beginning to take effect, progress is slower than might have been hoped. Only five countries out of a total of forty eligible candidates have qualified thus far. Part of the problem stems from insufficient funding for the new initiative. For its part, the EU has agreed to contribute 1 billion euros to debt relief and the HIPC Initiative. Ireland's share of this will about 6 million euros. This is in addition to the £31 million which we have already mobilised to help relieve the debt burden of heavily indebted poor countries.
Ireland will continue to monitor progress under the HIPC and use its influence to press for a just and comprehensive long-term solution to the debt problem in the developing world.
