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US, Britain reach debt-relief agreement for developing nations
Britain and the United States have agreed on a system to relieve 18 of the
world's poorest nations, mostly in Africa, of combined debt worth 16.7 billion
dollars, The New York Times said. "Yes, we have reached an agreement spelling out what President Bush and the prime minister outlined the other day in Washington," a senior US official told the newspaper. He said the debts would be written off by international lenders to give debtor nations the chance for a new start, and eventually be able to borrow again to finance social and economic development, rather than just repay existing loans. The deal would free 18 countries -- Benin, Bolivia, Burkina Faso, Ethiopia, Ghana, Guyana, Honduras, Madagascar, Mali, Mauritania, Mozambique, Nicaragua, Niger, Rwanda, Senegal, Tanzania, Uganda and Zambia -- from making one billion dollars in interest payments each year. In practice, most of the debtor nations have been unable to make their payments to the World Bank, International Monetary Fund ( IMF) and other international lenders such as the African Development Bank. Eventually, the daily said, the debt-relief program agreed upon can be extended to at least nine other countries, with others sure to press for similar treatement. The method of having the lenders write off the debts of the 18 nations was pushed by the United States, while Britain argued in favor of having rich nations take over the responsibility for repaying the debts to the international lending institutions. In exchange for accepting Washington's approach, Britain persuaded the United States to promise to provide additional money to the lenders to make up for the assets they were writing off, the unidentified official told the daily. A second proposal to have the IMF sell some of its gold reserves to help pay off the loans owned to the fund met with US objections to the possibility it might drive down the price of the precious metal in the open market, hurting among others US producers. The compromise on this issue, said official said, was to draw, in part, on the proceeds earned by the IMF from sales of gold in the 1990s. After his meeting with Blair, Bush confirmed that the United States would offer another 674 million dollars for humanitarian aid in Africa, in addition to the 1.4 billion dollars already allotted this year. However the United States has refused to back a British proposal to raise additional aid money on the international financial markets. |
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