H.M. TREASURY

142/00

2 December 2000

BRITAIN TO RENOUNCE DEBT PAYMENTS

Chancellor Gordon Brown and International Development Secretary Clare Short today pledged that, from December 1^st, all debt payments to the UK from 41 of the world's poorest countries have now stopped or will be held in trust for the day they can be returned to fund poverty reduction.

Speaking at a rally organised by Jubilee 2000 in London, the Chancellor said:

“Because poverty is so great and the need so urgent, neither you nor I want the richest countries to benefit any more from the debts of these poorest countries.

“So I can say to you – and to all 41 HIPC countries on behalf of the British Government – I will renounce our right to receive any benefit from the historic debt owed by all the 41 most indebted countries. From today, all debt payments received by us will be held in trust for poverty relief, paid when poverty reduction plans are agreed and backdated to this day.”

The Chancellor outlined what progress had been made so far. The IMF and World Bank have committed that 20 countries will be getting debt relief by the end of the year. This will lead to over ,600 million in debts to the UK being written off, benefiting 200 million people. In total $50 billion in debt relief will be pledged for these 20 countries.

But for the 21 still to secure debt relief because of civil wars, external conflict or the absence of a poverty reduction programme, Britain will now backdate 100 per cent debt relief to today. All payments will be held in trust for the day that they become eligible for debt relief. The Chancellor went on to call for other countries to follow the UK’s lead:

“Today here in London I ask our neighbours having - like us - made sure that the payments for debt will be spent on poverty relief, to also renounce their right to any benefit from the historic debt owed by these 41 heavily indebted countries.

“My second plea is that from today, we build together a new global alliance of governments and civil societies that makes a reality of the virtuous circle of debt reduction poverty relief and sustainable development. “And here from Britain I pledge we will do everything we can to realise in the years to 2015 the global aims:

that every child in the world should be in primary education;
that instead of one in seven children dying before the age of five, every avoidable infant death is prevented; and
a halving of poverty by 2015.

“To achieve this, we will seek to build a worldwide alliance of shared purpose against child poverty. All of us – the United Nations, the IMF, World Bank, UNICEF, UNDP, the developed countries, Governments and developing countries – to accept and discharge our shared responsibility to the uneducated, the sick and the poor.”

Financial Secretary Stephen Timms is today travelling to Zambia, Malawi and then South Africa and will explain the new initiative and talk to leaders about debt relief. Clare Short has just returned from a visit to Africa.

NOTES TO EDITORS

The 41 HIPC countries are set out below.

HIPC COUNTRIES

ANGOLA
BENIN
BOLIVIA
BURKINA FASO
BURUNDI
CAMEROON
CENTRAL AFRICAN REPUBLIC
CHAD
CONGO DEM. REP
CONGO REP
CÔTE D'IVOIRE
ETHIOPIA
GAMBIA
GHANA
GUINEA
GUINEA-BISSAU
GUYANA
HONDURAS
KENYA
LAOS PEOPLES DEMOCRATIC REPUBLIC
LIBERIA
MADAGASCAR
MALAWI
MALI
MAURITANIA
MOZAMBIQUE
BURMA (MYANMAR)
NICARAGUA
NIGER
RWANDA
SAO TOME AND PRINCIPE
SENEGAL
SIERRA LEONE
SOMALIA
SUDAN
TANZANIA
TOGO
UGANDA
VIETNAM
YEMEN
ZAMBIA