Sub-Saharan Africa

Part of Oral Answers to Questions — International Development – in the House of Commons at 11:30 am on 22nd January 2003.

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Photo of Clare Short Clare Short Secretary of State, Department for International Development 11:30 am, 22nd January 2003

No, I am afraid that the hon. Lady does not understand the HIPC initiative. Twenty-six countries are in receipt of debt relief, but are not paying their debts. Countries reach the point at which they are allowed to stop paying when they put in place a poverty reduction strategy and start a process of reform. Only six have reached the completion rate when the debt is permanently written off, but a much bigger number are receiving debt relief than she suggested. Her 70 per cent. figure is simply wrong.

The HIPC initiative has triggered a major effort for reform in some of the poorest countries, and we can all be proud of that. However, it now needs some adjustment. Partly because of the fall in commodity prices and the great rise in oil prices, there needs to be more generous debt relief to get countries to sustainability. There is another technical problem: the debt relief formula limits what countries can borrow, and Rwanda, Ethiopia and Niger are not being allowed to receive World Bank resources under the initiative. That needs correcting.