HM Treasury News Release

161/98                                  1 October 1998
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DELIVERING THE MAURITIUS MANDATE
                       
In Ottawa today Chancellor Gordon Brown unveiled a comprehensive
strategy to assist in the poorest and most vulnerable countries'
efforts to reduce poverty.

The international community has made the halving of world poverty
levels an overarching objective for the new millennium.  For
those countries burdened by debt and the legacy of conflict, we
need a comprehensive approach to support them in achieving this
goal.  This approach should involve:

         Decisions by Spring 1999 on a framework for helping
          post conflict countries, which will provide early
          financial and technical assistance; advance debt
          relief; and deal with arrears;

         A wide-ranging review of the HIPC Initiative in mid
          1999.  Such a review will help to ensure that the HIPC
          Initiative really does provide a lasting and final
          exit from the burden of unsustainable debt;

         Ensuring that 22 countries have reached their decision
          points under HIPC by the end of 1999; and

         Making further progress on an international commitment
          to ensure that export credits will only support
          productive expenditure.

The UK is committed to achieving these objectives.  We will press
forward with this agenda at the Annual Meetings.  The UK is
prepared to support these policies by;

         Contributing to any IDA managed trust fund for post
          conflict countries;
     
         Clare Short, Secretary of State for International
          Development, will announce tomorrow a substantial
          additional contribution to the HIPC trust fund to help
          the African Development Bank meet its share of HIPC
          costs;

         A willingness to contribute to international efforts
          to fill any financing gaps that remain to secure debt
          sustainabillity  for HIPCs that require more than 80%
          relief from the Paris Club;

         A further contribution to funding for technical
          assistance in debt management, to support faster
          resolution of debt reconciliation, and support the
          principle of a stronger debtor voice; and

         A UK commitment to allowing export credits for HIPCs
          only for productive expenditure.

The Chancellor said:

     "The priority now is to deliver the Mauritius Mandate.  It
     would be a tragedy if the turmoil in emerging markets led the 
     world to lose sight of the plight of some of poorest indebted 
     countries."


Notes for Editors

1.   The Mauritius Mandate was endorsed by the Commonwealth
     Finance Ministers last year.  The Mandate challenged the 
international community to work together to resolve the problem of 
unsustainable debt by ensuring sufficient debt relief for heavily 
indebted poor countries.

2.   The Mauritius Mandate set specific targets for the
     implementation of the HIPC Initiative that all countries 
eligible for relief should have entered the process of securing  
that relief by the new millennium ; and that three quarters of those
countries should have received decisions on the level and timing of 
relief by the same date.

3.   Nine HIPC countries have now reached the decision point
     under the Initiative, seven of which have sustainable debt 
burdens after receiving Naples Terms Stock of debt reductions.  Two 
countries eligible for debt relief, Uganda and Bolivia, have reached
completion points - Uganda in April, only 18 months after the launch
of the Initiative, and Bolivia in September.

4.   In order to support the HIPC Initiative, and ensure that
     the Mauritius Mandate targets are met, the UK Government has 
already:

         Announced a 28% increase in DFID's aid budget over the
          next three years, the largest percentage  increase
          received by any Government Department.

         Given $680,000 to Debt Relief International to fund
          Technical assistance in poor countries;

         Given $10.5 million to the HIPC Trust Fund to help
          finance the African Development Bank's contribution to
          debt relief for Uganda;

         Pledged $10 million to help finance debt relief for
          Mozambique; and

         Given $27 million and pledged $82 million over two
          years to Tanzania and given $16.5 million to
          Mozambique, to help those countries meet their service
          obligations to IFIs.

# = pounds sterling