Twenty three countries have now qualified for relief under the heavily indebted poor countries—or HIPC—initiative. More than $53 billion of debt relief has been agreed for those countries, which together owe $74 billion, so most of their debt is written off. The money released is directly linked to poverty reduction.
The impact of that debt reduction means that social expenditure in those countries is projected to rise by an average of $1.7 billion per year. We hope that, in addition, Ghana, Sierra Leone and, possibly, Ethiopia will qualify for relief this year, but most of the remaining 10 eligible countries are affected by conflict or have no commitment to reform. We need greater progress in conflict resolution to bring debt relief to the remaining 10 heavily indebted poor countries.
I thank my right hon. Friend for her answer and congratulate her on leading the world in a vital initiative which may do more than many other things to relieve poverty. She has mentioned that the money will be spent on things such as health and education. How is that spending being monitored and what can we do to ensure that countries that are benefiting from debt relief do not fall into new debt?
I am grateful to my hon. Friend. The most important achievement of the enhanced HIPC package is the commitment of countries to preparing poverty reduction strategies, openly consulting their people about all their economic policies, including how they mean to grow the economy and how they will use aid, debt relief and their own revenues to drive forward social programmes for all. The new instrument will be used for monitoring and for countries' better accountability to their own people. That is a transformation of the way in which the International Monetary Fund and the World Bank work in such countries—it is more open, more poverty focused and more participatory.
I very much agree with my hon. Friend that we must make sure that those countries do not get into debt again. We need improved practice in export credit procedures across the world so that loans are not guaranteed for bad projects that bankrupt countries. We shall try to work on that at the export credits committee of the Organisation for Economic Co-operation and Development to try to get higher standards across the world.
I congratulate the right hon. Lady on continuing in her important role of spearheading our country's attack on global poverty, which is possibly the greatest moral challenge facing our generation. I pay tribute to the genuine work that has been done on debt relief.
Has the Secretary of State seen the United Nations report commissioned by Kofi Annan, which said last week that debt relief has taken a long time and, in many cases, has not gone far enough? It calls, in part, for a new initiative on debt relief. I pay tribute to the progress that has been made, but does the Secretary of State agree that there is now a need for a new momentum? Does she have any specific plans to give that momentum to this important issue?
I am grateful to the hon. Gentleman and agree that this is the most important moral issue for the world; it is also the most important issue in terms of the sustainability of the planet. If we do not make progress, we will have increasing catastrophes, so it is in our self-interest to pay much more attention to these matters.
I do not agree with those who say that we need debt relief for more countries, including middle-income countries that have managed their debts badly and need the Paris Club to recycle those debts and get better economic management. I do not agree with the current drop the debt campaign for 100 per cent. relief for those who are already getting debt relief and owe money to the IMF and the World Bank. We should not privilege countries according to whom they owe money; we should go by need. The point of the HIPC initiative for the 41 countries that are so indebted that they can never pay is to relieve the burden of debt so that they can adopt good social and economic policies. They will continue to need aid and other support for years, but we should get debt out of the way and better economic management in place. Then we can support such countries in building up their economies and providing public services, rather than just providing more and more debt relief.
I thank the Secretary of State for her answer. Is not this weekend's summit in Genoa an opportunity, however, for our country to continue to take the lead in debt relief? Is she aware that if her Government continue to lead the international community on the forgiveness of unpayable debt and pursue the issue ruthlessly until all the world's poorest nations receive a real dividend, she and her Government will have and will deserve the full support of Opposition Members?
It is very important in Genoa to drive on and to keep the 23 countries on track. There were wobbles in Zambia and it would be a terrible setback if its programmes fell away. We must move Ghana forward; it has just had elections and needs some help, as do Sierra Leone and Ethiopia. We need to keep everyone to the agreement that, as countries are exiting the initiative, we consider sustainability, as oil price rises are throwing things out of kilter. The other thing that we want to achieve at Genoa is the establishment of a health fund for the supply of drugs and commodities, to bring down prices, increase availability and lever in research. That needs to be complemented by the establishment of health systems through poverty-reduction strategies. I am grateful to the hon. Gentleman for his support for those efforts.