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Treasury

Answer

Mrs. Calton: To ask the Chancellor of the Exchequer whether sufficient funds are available from the money committed by the G8 in Canada in 2002 for the Heavily Indebted Poor Countries fund for top-up debt relief to provide the sum required for Ethiopia to meet the sustainable debt to export ratio set by the World Bank. [158574] John Healey: Following the enhancement of the HIPC Initiative in 1999, it became apparent that some countries would reach Completion Point with deteriorated debt indicators compared to the projections at Decision Point. As a result, the Initiative provides the option of additional debt relief, or `topping-up', at Completion Point, beyond that committed at Decision Point, when exceptional and exogenous factors have caused a substantial deterioration in a country's long-term debt sustainability. At the G8 summit in Kananaskis, leaders agreed to fund the financing shortfall in the HIPC Trust Fund, pledging up to an extra US $1 billion, part of which would be used to cover additional costs of topping up. Ethiopia is shortly expected to reach its HIPC Completion Point with a debt-to-export ratio in excess of the 150 per cent. target set by the IMF and World Bank, and so should be eligible for consideration for topping up. The UK has been working closely with the Ethiopian government and supports the case for topping up. The potential costs have not been finalised, but it is expected that the resources pledged in 2002 will cover the costs for the HIPC Trust Fund.

Secondary information

Type

Written question

Reference

418 c1270W;418 c1271W; 158574

Session

2003-04

Subjects

Debts Finance International assistance Heavily indebted poor countries initiative World Bank Ethiopia

Contains statistics

Yes

Link

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