G8 ministers back Africa debt deal
LONDON, England -- Finance ministers from the world's wealthiest
nations have agreed to a historic accord to cancel up to $55 billion
worth of debt owed by the world's poorest nations.
The Group of Eight (G8) ministers -- meeting for a second day
Saturday in London -- backed a deal that calls for an immediate
scrapping of 100 percent of the debt owed by 18 countries.
Those countries -- many in sub-Saharan Africa -- owe about $40
billion to the World Bank, the International Monetary Fund and the
African Development Bank.
The G8 ministers also said 20 other countries could be eligible for
debt relief if they meet targets for good governance and tackling
corruption -- bringing the total package to more than $55 billion.
British Finance Minister Gordon Brown called the accord a "new deal"
for relations between the rich and the poor countries.
"What we have decided today, conscious of the poverty that we face,
is a decision of 100 percent debt cancellation for the poorest
countries backed up by greater trade justice, by a doubling of
European aid, by a commitment to provide AIDS treatments for people
by 2010," said Brown.
Finance ministers from the United States, Britain, Japan, Canada,
Russia, Germany, Italy and France agreed to the package ahead of a G8
summit July 6-8 in Gleneagles, Scotland.
Hopes of an accord on debt relief were raised Friday with reports of
an agreement between the United States and Britain on writing off
debt owed by the 18 countries.
The countries are Benin, Bolivia, Burkina Faso, Ethiopia, Ghana,
Guyana, Honduras, Madagascar, Mali, Mauritania, Mozambique,
Nicaragua, Niger, Rwanda, Senegal, Tanzania, Uganda and Zambia.
Sub-Saharan Africa owe about $68 billion to international lending agencies.
Saturday's accord is aimed at helping countries free up funds used
for debt repayment in redirect the money to health care, education
and other needs. One of the major issues that these countries face is
the AIDS crisis.
"A real milestone has been reached," U.S. Treasury Secretary John
Snow told reporters.
"Lifting the debt burden from the poorest countries in the world
brightens their prospects enormously. This is an achievement of
He also said "we did that because as we looked at the situation,
there was something fundamentally wrong about this cycle of lend and
forgive, lend and forgive, which had borne down upon the poorest
countries for decades."
The agreement was greeted with less enthusiasm by some.
Stephen Rand, of the Make Poverty History campaign, said this is
"good news, but more needs to be done."
"This is some of the debts of some of the world's poorest countries.
And we have been campaigning for that 100 percent to be 100 percent
of all the debts of all the world's poorest countries," Rand said.
Make Poverty History is a coalition dedicated to the eradication of poverty
British Prime Minister Tony Blair -- current G8 president -- had
demanded that poor countries' debts be cancelled and their aid
The debts would be written off by the lenders in an effort to allow
the debtor countries to start fresh, get their books in order and
eventually be able to borrow again for economic development, health,
education and social programs, rather than simply to repay existing
The G8 ministers discussed other issues Saturday, including concerns
about the effect of high oil prices on the global economy, U.S.
deficits, reform of Japan's financial sector and poor economic growth
Chinese officials have been included in order for U.S. and European
ministers to urge them to the float the yuan, which many see as being
overvalued, leading to floods of cheap imports.
Snow is urging his Chinese counterpart Jin Renqing to scrap the
yuan's exchange rate peg to the U.S. dollar.
Sunday, June 12, 2005 Posted: 0654 GMT (1454 HKT)