Dáil Éireann díospóireacht -
Wednesday, 10 May 2000

Vol. 518 No. 6

Written Answers. - Third World Debt.

Richard Bruton

Ceist:

265 Mr. R. Bruton asked the Minister for Finance the position he will take in relation to world debt affecting so many Third World countries at the forthcoming IMF World Bank meetings; and if his attention has been drawn to the wide body of support in Ireland for a far more generous approach than has been forthcoming heretofore. [13376/00]

Minister for Finance (Mr. McCreevy)

Ireland is not a bilateral creditor of any of the world's poorest countries nor a member of the G8. It is, therefore, as a member of the multilateral lending organisations, in particular the World Bank and the International Monetary Fund, that we can best exercise our influence to seek to contribute to easing the debt burden of these countries.

The HIPC initiative, driven by the World Bank and the IMF, is the official response to the need for debt relief, particularly at the multilateral level, but also involving substantial, if not complete, relief in respect of official bilateral debt. As originally conceived, the initiative is aimed at both (i) freeing the most heavily indebted poorest countries from the burden of the unpayable element of their debt and (ii) offering them a definitive exit from the debt treadmill which is seriously undermining their development.

Following the recent review of the initiative, it has been substantially enhanced – the amount of debt relief on offer has been doubled and a wider range of countries is to get faster and deeper relief – and my concern now is that these improvements are fully financed. I would remind the Deputy that Ireland was to the fore in calling for such improvements, in particular via the submissions made by my Department and the Department of Foreign Affairs to the review of HIPC which led to the improvements.

I am aware of the wide public concern for a serious attack on the problem of unpayable debt which is reflected in the extent of popular support for Jubilee 2000. However, I am not convinced that a blanket call for debt cancellation is attainable, at least as far as multilateral debts are concerned. I would remind Deputies that the HIPC initiative also envisages substantial reductions in bilateral debt and I am heartened by the indications that an increasing number of countries are prepared to do so. We have been advocating and supporting this development in our international dealings.

In my opinion the enhanced HIPC initiative is the only realistic mechanism through which multilateral debt relief for heavily indebted poor countries can be achieved. Successful and timely implementation of the enhanced framework would create an opportunity for further enhancement, which I would fully support and consider vital for future growth and development in HIPC countries. In this regard, I am particularly concerned that the number of countries processed to date falls short of projections under the enhanced HIPC framework and I am also somewhat disappointed at the amount of pledges to the HIPC trust fund that have been converted to paid-in contributions. Given these concerns, the Deputy can be assured that I will use my best endeavours to press for the full and speedy implementation of the HIPC initiative, both in terms of the number of countries processed and also its financing.

Deputies will recall that Ireland is contributing fully to the enhanced initiative. We are also participating in the alleviation of bilateral debt relief in relation to some of our priority aid countries even though our own bilateral assistance has been in the form of grants. Ireland contributed £12.1 million in 1999 to the debt relief package and is committed to payment of a further £2.9 million by 2008.