Dáil Éireann díospóireacht -
Tuesday, 19 Nov 2002

Vol. 557 No. 4

Written Answers. - Debt Cancellation.

Enda Kenny

Ceist:

187 Mr. Kenny asked the Minister for Finance if there is a role for Ireland's representatives to the International Monetary Fund and World Bank to promote Government policy on debt cancellation; if there is a role, if he has instructed Government representatives to promote the idea of debt cancellation; and if he will make a statement on the matter. [22424/02]

Enda Kenny

Ceist:

188 Mr. Kenny asked the Minister for Finance if, in his address to the International Monetary Fund and World Bank in September 2002, he was in conflict with the official Government position as outlined at the World Social Summit in Johannesburg in August 2002 on the question of debt cancellation; and if he will make a statement on the matter. [22426/02]

Minister for Finance (Mr. McCreevy)

I propose to take Questions Nos. 187 and 188 together.

I fully support the Government position on the issue of developing countries debt and my address to the annual meetings of the World Bank and the International Monetary Fund does not conflict with that. As co-authors of Ireland's debt strategy document, my Department was actively involved in formulating the Government position on developing country debt.

Since the launch of the debt strategy, Irish officials have had consultations in Washington with the Bretton Woods Institutions. In addition, the debt strategy document has been forwarded to Ireland's representatives at the IMF and the World Bank in advance of the annual meetings of these institutions. We have actively promoted our policy internationally at both political and official level. The Deputy can be assured that the international community has been made aware of Ireland's policy on developing country debt. I draw attention to the Taoiseach's address to the World Summit on Sustainable Development where he articulated Ireland's policy in relation to cancellation of developing country debt.

My Department, in close co-ordination with Ireland Aid, will continue to promote our views on debt relief in all relevant international fora. We will also 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.

I remind the Deputies of the Government position in relation to debt cancellation, as stated in our debt strategy document. We have concluded that in principle the total cancellation of the debts of the heavily indebted poor countries is a politically acceptable objective and one that we would support. Total cancellation would, however, have to be funded largely through additional donor contributions. In order to mobilise the necessary funds for total debt cancellation, a greater number of donors, particularly the larger economies, would have to increase their ODA more rapidly and take concrete steps to meet the UN target of 0.7% of GNP on ODA.

The total cancellation of HIPC debts should be accompanied by strong monitoring and accountability mechanisms to ensure that the additional funds available to HIPC Governments, through debt cancellation, would be directly channelled into increased social expenditure, particularly HIV-AIDS. While we support in principle the total cancellation of HIPC country debts, we believe that, in practice, the additional donor contributions required to achieve this will be difficult to mobilise. The additional ODA commitments made by major donors, such as the EU and the US, at the International Conference on Financing for Development would not be sufficient to cover total debt cancellation. In any case, these contributions will be used to fund a number of development activities and not just debt.

Ireland has never given development assistance in the form of loans and is not owed any money by the heavily indebted poor countries. We have, however, contributed generously to international debt relief efforts. In 1998 the Government announced a package of £31.5 million for debt relief in the form of contributions to multilateral debt relief funds at the World Bank and the IMF and to national debt relief funds in Tanzania and Mozambique. In 2001 we paid an additional £4.5 million the World Bank earmarked for debt relief in Ethiopia. Our share of the EU contribution to the World Bank HIPC Trust Fund is €6 million. In July 2002, Ireland announced a commitment of €1.5 million over three years to the activities of Debt Relief International, a non-profit making organisation which helps poor countries manage their borrowing and existing debts.