To ask the Secretary of State for Foreign and Commonwealth Affairs what steps are being taken to alleviate the debt burden on sub-Saharan Africa and Latin America.
The Houston economic summit reaffirmed the international debt strategy under which Governments provide financial assistance to those indebted countries who are pursuing agreed programmes of economic reform. This assistance is available through the IMF and World bank, bilateral donors such as the United Kingdom, and the rescheduling of official debts in the Paris Club. The United Kingdom has taken the lead in developing additional measures for the poorest countries, mostly in sub-Saharan Africa, whose debt is mainly owned to official creditors. These measures include the cancellation of old aid debts, and the rescheduling of other official debt on concessional terms.For middle-income countries, mostly in Latin America, whose debt is mainly owed to commercial banks, these banks are increasingly ready to allow a measure of debt reduction in the financing packages which they negotiate with these countries. A further incentive for such voluntary market-based debt reduction has been provided by last year's decision of the IMF and World bank to allow some of their resources to be used in support of such deals.