HM Treasury News Release

124/98                                             28 July 1998
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           CHANCELLOR CALLS FOR INTERNATIONAL EFFORT 
                   TO REDUCE POOR COUNTRY DEBT

Attached is a copy of Chancellor of the Exchequer Gordon Brown's
speech to the Lambeth Palace International Meeting on Debt today.

            CHANCELLOR OF THE EXCHEQUER'S SPEECH 
                  LAMBETH PALACE 29 JULY 1998             

I am grateful to have, at your invitation, Archbishop, an
opportunity to be a part of this Lambeth Conference, with its
historic theme, the theme chosen by all nine provinces in the
Anglican communion worldwide, our duty to help countries burdened 
and immiserated by debt.

We are constantly reminded of the economic links that now bind
countries and markets together in the increasingly globalised
economy.

But for far longer, indeed for centuries, the Church, with its
worldwide mission, has avowed and demonstrated the moral links that
bind us together, all of us, citizens and nations, rich and poor, in
one moral universe.

Martin Luther King spoke of how we are caught in an inescapable
network of mutuality, tied in a single garment of destiny, part of
one moral universe.

And it is because of our shared responsibilities, our common
concerns, our linked destinies ,our dependence each upon another that
our teaching tells us that an injustice anywhere is a threat to
justice everywhere.

To quote the experience of only one country, Niger, where life
expectancy does not remotely approach the biblical three score years
and ten and where a majority are dead by 50; four fifths of adults
are illiterate; two thirds live on less than 1 dollar a day.  It is a
country which spends nearly four times more of its resources
servicing its debts than it does on looking after the health of the
people.

Part of a region in which 200 million can barely move their bodies
because of hunger, part of a world where 30,000 children die every
day from preventable diseases and where 1.3 billions, two thirds of
them women, are in poverty.

John F Kennedy said that if a free society cannot help the many who
are poor, it cannot save the few who are rich.

Because money spent on servicing debts is needed far more for health
and for education, debt relief is a matter not just of dispensing
charity but ensuring justice prevails.

But debt relief is also an economic issue, because a mountain of
inherited and hitherto immovable debt stands in the way of the
economic development which would break the cycle of poverty disease
and illiteracy.

And it is to move this mountain of debt that, in response to the
arguments and pleas of the churches, I believe our inescapable duty
is to try to ensure by the year 2000 all highly indebted poor
countries are embarked on a systematic process of debt reduction.
Last year only one country had entered the process. Now there are
six, most recently including Mozambique, with £3 billion of debt
relief pledged.

For the fourteen others with still with no place at the table - it is
urgent that following the G7 we step up on our actions to
systematically remove the barriers between them and the debt
reduction measures that will help them. And I look to you to use your
moral authority with governments all over the world to support the
necessary action.

First, for countries like Rwanda, Liberia, Democratic Congo weighed
down by the double burden of debt and the economic consequences of
war, and who without special help will never recover, we have an
urgent duty to help them move from crisis to development by :

     taking into consideration performance under the post-conflict
     assistance programmes in assessing a debtors track record;

     tackling the problem of debt arrears; and

     ensuring ,with help from bilateral donors, that IMF and World
     Bank funding is concessional.

Second, for all other countries, we must find faster and easier ways
to secure the debt relief they need and so in the run up to the IMF
and World Bank meetings in October, Britain will offer highly
indebted poor countries, all the technical assistance and back up
they need to enter and make the most of debt reduction programmes.

And at the IMF meetings in October we will ask that all possible
means of financing debt reduction be considered. 

Third, each country must be asked to do more.
 
I want every creditor country to follow our unilateral action in
targeting export credits for the poorest countries solely on peaceful
and productive expenditure.

And I want all donor countries to write off their aid loans to the
poorest countries, something that the UK government has already done
in its loans with over thirty of the world's poorest countries, a
policy now extended to those poorer Commonwealth countries committed
to poverty eradication.
 
Fourth, we must help our citizens do more.

Clare Short will tell you how as an individual government we are both
increasing aid - by 28 per cent in real terms or 1.6 billions over
the next three years - and redirecting aid to health, education and
anti poverty programmes.  Our goal as a government is to halve the
proportion of the world's population living in absolute poverty by
2015.

But we also want British people to be part of a giving society.

And I can tell you that we have also set aside 60 millions as a tax
supplement for individual donors giving Millennium Gift Aid to
education, health and anti poverty programmes in the poorest
countries.  The 60 million we have set aside from government could
produce an additional 250 million for work of the charities and
organisations in Africa and the poorest countries.

Finally, we must now redouble our efforts to find long term solutions
that create a virtuous circle of debt relief, poverty reduction, and
economic development,

Last year, the 48 least developed countries received, between them,
less than 1% of foreign commercial investment in all the developing
nations.

And if countries are to draw on secure flows of commercial finance in
a world disciplined by the realities of an inescapable and endlessly
judgmental global market in capital, then it is to their advantage
not just to tackle corruption, secrecy and wasteful military
expenditure but also to follow internationally agreed and publicly
recognised standards or codes of monetary and fiscal policy,
corporate behaviour and there must be freedom from corruption.

These international codes of good practice -the rules by which
nations and people live - operational rules for fiscal transparency,
monetary and financial good practice, good governance and good social
practice -  codes that will be applied to all countries by
international agreement, rather than be imposed by the rich on the
poor, and signed by rich and poor countries alike, would, in my view,
provide a new framework for world economic development that would
give new hope to the poorest and the most vulnerable countries.

And in my views these new codes of good practice that can bring both
stability and international investor confidence need not be
oppressive: indeed they can be liberating because they offer the
poorest countries a chance to break the power of lack of governmental
accountability, secrecy, and corruption which have held them back by
denying them international credibility and confidence.

And let me make one further suggestion: if international institutions
can agree on codes of practice that set minimum standards in economic
management, they can also go on to explore the possibility of a new
international code of good social practice.  Perhaps based on minimum
social standards, core labour standards and decent provision in
health and education.

Harold Macmillan once famously spoke of the wind of change blowing
across Africa, changing the politics of that great continent.

What inspires your vision is something more fundamental. Your vision
is of a new climate of justice across the world, a new climate of
justice that will eventually liberate nations from debt, people from
poverty, and millions of individuals from unfulfilled lives, bringing
our global  economy and our moral universe into harmony for the
benefit of all, transforming not just the politics on one continent
but economics society and politics the world over.

One that recognises that by the strong helping the weak it makes us
all stronger.

I was taught in church to believe that an injustice anywhere is a
threat to justice everywhere.

So  today, let us resolve from here in London today, within 15 months
of a new century, to work together, churches, political leaders, the
peoples of the world to :

     tackle debt 

     tackle poverty directly 

     tackle the causes of poverty and the causes of
     underdevelopment.

So to end the long night of injustice and make the Millennium a new
dawn of hope for Africa and the poorest of the developing world.


# = pounds sterling