Bernard J. Durkan
Ceist:165 Mr. Durkan asked the Minister for Foreign Affairs his position in regard to the abolition of debt in developing countries; and if he will make a statement on the matter. [27827/00]
Written Answers. - Overseas Development Aid.
The large external debt of developing countries imposes a serious constraint on the development of many of the world's poorest countries, specifically the 41 heavily indebted poor countries or HIPCs. Of the 41 HIPCs, 33 are in Africa where it is estimated that 40% of government revenues are now being allocated to servicing a total debt of some US$350 billion – to the detriment of health, education and other essential social services. The fact that many of the most heavily indebted countries also have to deal with the rapid spread of HIV/AIDS adds to the need for an urgent and comprehensive response by the international community.
Significant progress in tackling the debt of the poorest countries has been achieved since the G8 Summit in Cologne in 1999. The World Bank and IMF's enhanced HIPC framework has now begun to deliver debt relief. Thus far, 12 countries, Benin, Burkina Faso, Bolivia, Cameroon, Guyana, Honduras, Mali, Mauritania, Mozambique, Senegal, Tanzania and Uganda, have qualified for relief under the enhanced mechanism with total committed assistance estimated at over US$19 billion. The objective is that 20 of the 41 HIPCs should have qualified by the end of 2000. When completed, it is hoped that the HIPC Initiative will deliver more than $30 billion. Taken together with traditional debt relief mechanisms, a total of about $50 billion will be provided in debt service relief to eligible countries.
Many heavily indebted poor countries have undertaken major structural reforms to their economies in order to qualify for debt relief. Under the enhanced HIPC initiative, debt repay ments by these countries should, in most cases, fall to a level which is sustainable and which does not deflect scarce resources from important social sectors such as health and education. There is, however, concern that for some countries, Zambia for example, the debt relief granted under HIPC will not achieve the objective of debt sustainability and additional efforts will have to be made in such cases.
Since Cologne, a number of major bilateral creditor countries have announced their willingness to write off 100% of the debts owed to them by countries qualifying for enhanced HIPC debt relief. In July 2000, the EU announced a contribution of over 1 billion – US$950 million – to debt relief efforts. The contribution is a timely and crucial step forward in a concerted international effort to remove the burden of unsustainable debt. Earlier this month, President Clinton signed legislation that provides US$435 million for debt relief.
At the annual meetings of the International Monetary Fund and World Bank in Prague in September, my colleague the Minister for Finance, Deputy McCreevy, supported calls for all bilateral creditors to implement an immediate moratorium on bilateral debt repayments for the world's heavily indebted poor countries, stating that an immediate debt moratorium would free up resources for heavily indebted countries to spend on urgent social priorities and poverty reduction strategies.
The enhanced HIPC initiative does not, of course, amount to total debt cancellation. Total cancellation raises a number of difficult and complex questions. Debt alleviation cannot be considered in isolation. Issues such as corruption, poor governance, internal conflict and human rights abuses must be taken into consideration. Donor governments, who will be expected to pay very substantial moneys in support of debt relief, want assurances that the financial resources liberated by debt relief are directed to the alleviation of poverty.
The Government welcomes the important contribution which the Jubilee 2000 campaign for total debt cancellation has made to securing the current level of debt relief available to poor countries. The Government believes that it is necessary to consider every option including, where possible, debt cancellation. We continue to monitor the implementation of the HIPC process and its impact on poverty reduction.
Ireland has committed IR£11 million to the World Bank HIPC trust fund, the main multilateral financial mechanism for funding debt relief. IR£4 million have been committed to the IMF's HIPC trust fund and a further IR£7 million to the fund's enhanced structural facility, ESAF. We have also provided assistance of IR£9.5 million directly to the national debt trust funds in Tanzania and Mozambique.
The Taoiseach's recent announcement at the UN millennium summit of the Government's commitment to achieving the UN target of 0.7% of GNP for ODA in 2007 and an interim target of 0.45% in 2002 should enable us to devote more resources to dealing with the debt issue both bilaterally and multilaterally.
Question No. 166 taken with Question No. 97.