---

Dept for International Development

Answer

Mr. Pond: To ask the Secretary of State for International Development what action her Department is taking to address the issue of debt sustainability for those countries which have qualified under the Heavily Indebted Poor Countries initiative. [54758] Clare Short: The Government has been working to try to ensure that countries exit the Heavily Indebted Poor Countries (HIPC) Initiative process with sustainable debt levels. At the Annual Meetings of the World bank and IMF in Ottawa last November, we raised this concern and asked the World bank staff to revisit the debt sustainability analyses of all commodity dependent low-income countries, including HlPCs. The IMF and World bank analysis, published last month, shows that, although the situation varies from country to country, the external debt indicators for most HIPC countries have deteriorated, and several HIPC countries now face unsustainable debt burdens as a result. Following UK pressure, the World bank and IMF boards have agreed to provide additional relief to countries in this situation. This was reconfirmed at the Spring Meetings last month, and Burkina Faso became the first HIPC country to benefit from `topping up' at Completion Point. We are also pressing the Bank and Fund to take more concrete action to encourage non-Paris Club creditors that have not yet delivered debt relief, to do so. Debt relief is, however, not a panacea and further measures, including sound economic and debt management by HlPCs themselves, will be required beyond HIPC, to enable countries to maintain debt sustainability levels. To this end, the UK is co-financing a multi-donor funded project to help strengthen the debt management capacity in HIPC countries.

Secondary information

Type

Written question

Reference

385 c689W; 54758

Session

2001-02

Question not reached

Yes

Subjects

Debts Developing countries Debts written off Heavily indebted poor countries initiative

Link

View this Written question on www.publications.parliament.uk