Skip to main content

Hipc

Volume 403: debated on Tuesday 8 April 2003

The text on this page has been created from Hansard archive content, it may contain typographical errors.

To ask the Secretary of State for International Development whether the Government will be issuing a response to the World Bank"s recent evaluation of the heavily indebted poor country initiative. [106186]

I have been asked to reply.The World Bank Operations Evaluation Department"s recent review of the Heavily Indebted Poor Countries Initiative (HIPC) was prepared to inform donor and recipient countries of progress to date and make some key recommendations for strengthening the Initiative. It is not a report to the UK Government specifically and as such does not require a formal response. We are, nevertheless, considering the OED"s recommendations.The Government acknowledges that debt relief is not a panacea for broader economic development problems; even the provision of 100 per cent. debt relief to all low-income countries would still fall short of the resources needed to meet the Millennium Development Goals. That is why the Chancellor and the Secretary of State for International Development have proposed an International Finance Facility (IFF) that would seek to double the amount of development aid from just over US$50 billion a year today to $100 billion per year in the years to 2015.

To ask the Secretary of State for International Development what steps she is taking to ensure the additionality of heavily indebted poor country funding. [106187]

I have been asked to reply.Virtually all of the debts of the Heavily Indebted Poor Countries to the UK Government are owed to the Export Credits Guarantee Department (ECGD). The UK participates fully in the enhanced HIPC initiative under which bilateral creditors are typically required to offer 90 per cent. debt relief. These costs are borne entirely by ECGD and hence are additional to any aid spending by the UK.The UK goes further than is required under the HIPC initiative and always provides 100 per cent. debt relief. The Department for International Development (DfID) reimburses ECGD for the cost of this additional bilateral voluntary debt relief. To ensure that funding for the HIPC Initiative is additional these costs are carefully considered and agreed in each spending review.However, even the provision of 100 per cent. debt relief to all low-income countries would still fall short of the resources needed to meet the Millennium Development Goals. For this reason the Chancellor and the Secretary of State for International Development have proposed an International Finance Facility (IFF) that would seek to double the amount of development aid from just over US$50 billion a year today to $100 billion per year in the years to 2015.