LONDON: Group of Eight finance ministers will consider a compromise debt relief plan to write off multilateral debts of only five countries, a copy of the proposal showed on Tuesday. Aid agency Eurodad gave Reuters a copy of the French, German and Japanese compromise plan ahead of this weekend’s ministerial meeting hosted by Britain, which is pushing for sweeping debt relief despite opposition from other G8 members.
According to the document obtained from Eurodad, a network of 48 European development organizations, the debt relief initiative would apply to Mauritania, Mali, Ethiopia, Niger and Guyana.
There was no immediate official confirmation of the document.
Debt relief campaigners said the proposal fell far short of the spirit of a pledge by the world’s richest countries in February to consider as much as 100 per cent debt relief to international organisations from heavily indebted countries.
“To bring forward a proposal that benefits only five countries is shameful,” said Suzanne Luithlen, director of Jubilee Germany.
“It is not convincing to propose a debt sustainability approach which excludes countries which urgently need debt relief.”
Britain, which chairs the G8 this year, says 2005 is a make-or-break year for Africa, and
is pushing hard for other member nations to adopt plans to fund debt relief and to double aid to the world’s poorest nations.
British finance minister Gordon Brown has proposed selling or revaluing IMF bullion to raise cash to write off African countries’ debts to international organisations, an idea which has found little vocal support.
According to the compromise proposal titled “Sustainable Debt for Development” both debt stock and debt service should be taken into account when assessing a country’s eligibility for debt relief.
Countries should also be able to tap additional resources to fund development and the debt relief will have to be 100 per cent additional — financed with new money.
The document said that all eligible countries should fulfil good governance criteria and be committed not to tap non-concessionary financing.
All eligible countries should also be required to commit themselves to appropriately implement public debt management.—Reuters
