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Debt

Volume 195: debated on Tuesday 23 July 1991

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To ask the Chancellor of the Exchequer what recent agreements have been reached on debt release for the World's poorest countries (a) bilaterally and (b) through the World Bank, the International Monetary Fund and the European Community.

The Government has already cancelled around £1 billion of old aid loans owed by the poorest countries. A British proposal led to the agreement at the 1988 Toronto economic summit that government creditors would reschedule on concessional terms the other official debt of the poorest countries pursuing economic reforms. Twenty countries have benefited so far.At last year's Commonwealth Finance Minister's Meeting in Trinidad, my right hon. Friend the Prime Minister, when he was Chancellor, launched an initiative to increase official debt relief for the poorest countries. The Trinidad Terms, if accepted by all Paris Club creditors, could lead to debt reduction of up to $18 billion. The Government has been pressing to secure improved terms in line with the original United Kingdom proposals. We welcome the positive commitment to debt relief for the poorest, most indebted countries made by the leader of the `Group of Seven' countries at the conclusion of the recent London economic summit and hope that the Paris Club will be able to reach an agreement on new measures very soon.