The Hindu : International : Progress in debt relief talks

Online edition of India's National Newspaper
Tuesday, Feb 08, 2005

International

International

Progress in debt relief talks

By Larry Elliott and Ashley Seager

LONDON, FEB. 7. The leaders of the world's richest nations are on course to sign a deal in the summer on debt relief, aid and trade to help the world's poorest nations, the British government has said.

Finance Ministers from the G-7 developed countries agreed an action plan at the weekend.

Treasury sources said there was a consensus on the need for 100 per cent debt write-offs, extra development assistance and better access for developing countries to western markets. The next five months would be spent resolving arguments between Britain and its partners over the details.

Biggest critic

The United States emerged at the weekend as the biggest critic of proposals outlined by the U.K. Finance Minister, Gordon Brown, for a new International Finance Facility to double aid flows and for debt relief to be part financed by a revaluation or sale of some of the huge gold reserves held by the International Monetary Fund.

``We are not convinced of the need for that [gold sales] at this time,'' said the U.S. Treasury undersecretary, John Taylor. A spokesman for Mr. Brown said Britain expected to make progress on IMF gold at the Fund's spring meeting in April, when a paper would be presented by the Managing Director, Rodrigo Rato.

He added that the various proposals for raising aid budgets — including the IFF — would be studied in the run-up to the Gleneagles summit in early July. The meeting, attended by Tony Blair, George Bush and other world leaders, will then have to make a decision on the best way ahead.

Steve Tibbett, spokesman for charity ActionAid, agreed, saying it was high time the rich nations did something concrete on debt relief rather than just talk about it or set up working groups.

Upbeat mood

Mr. Brown was in upbeat mood yesterday following the G-7 meeting in London on Friday and Saturday. Despite pessimistic noises from the U.S., he said it was the first time the G-7 had agreed on a 100 per cent debt write-off, and that there was now a plan of action for the rest of Britain's G-8 presidency during 2005.

The U.S. Government was criticised by the South African Finance Minister, Trevor Manuel, who said Mr. Bush's foreign aid vehicle, the Millennium Challenge Corporation, had as yet failed to deliver a single dollar of cash to poor countries.

- Guardian Newspapers Limited 2004

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