Skip to main content

Heavily Indebted Poor Countries

Volume 405: debated on Thursday 15 May 2003

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

To ask the Chancellor of the Exchequer (1) what measures have been taken by his Department to increase creditor participation in debt alleviation for heavily indebted poor countries; [112917](2) whether creditor participation has been added to the status of implementation reports for heavily indebted poor countries; [112915](3) what progress has been made by the Government in restricting vulture funds and other debt brokers purchasing the debts of heavily indebted poor countries; [112914](4) that plans the Government has for reform of the laws governing litigation against heavily indebted poor countries; [112918](5) what progress has been made by G8 governments on compiling a report of creditor participation for heavily indebted poor countries; [112916](6) if he will convene a conference to persuade creditors of the value of participating in debt relief for heavily indebted poor countries; [112920](7) what progress has been made by the World Bank to provide reports on legal action brought against heavily indebted poor countries by creditors not participating in the HIPC initiative; [113397](8) what progress has been made by the World Bank to provide technical assistance to heavily indebted poor countries involved in litigation with creditors not participating in the HIPC initiative; [113398]

To ask the Chancellor of the Exchequer what proposals the Government has made since the Kananaskis G8 summit (a) to provide more relief than envisaged at completion point for HIPCs that have debts above the thresholds as a result of commodity price shocks within the HIPC rules and (b) to press for a change in the rules to ensure that additional relief provided beyond HIPC by some bilateral donors is excluded from the calculations; what response the Government has received from other G8 members to its proposals; and if he will make a statement. [113651]

At the G7 Kananaskis summit in 2002 the UK was instrumental in securing agreement that action was necessary to increase creditor participation in the HIPC initiative.The G7 agreed to ask the International Monetary Fund (IMF) and World Bank to:

include, in HIPCs' Poverty Reduction and Growth Facility reviews and Completion Point documents, more detailed information on the respective countries' success in obtaining comparable treatment; post comprehensive information on creditor participation on the Bank and Fund Web sites, including creditors' explanations for non-participation;
continue to work with regional and small multilateral development institutions to encourage and facilitate their participation in the Initiative;
and noting the importance of commercial creditor participation, to prepare a comprehensive report on legal action brought against HIPCs by non-participating creditors, including by commercial creditors, and on options for HIPCs to obtain technical assistance to facilitate resolution of disputes;
continue to encourage bilateral creditors not to sell their claims on HIPCs in the secondary debt market;
to include participation in the HIPC Initiative in reporting under Article IV as well as other Fund and Bank documents.

As far as non-Paris Club official bilateral creditors are concerned, the G7 asked the IMF and World Bank to encourage creditors who are members of the two organisations to participate fully in the HIPC Initiative, particularly relatively wealthy creditors that have a significant amount of claims. In addition, the G7 urged the IMF to identify creditor countries' participation in the Initiative ahead of any debt rescheduling with the Paris Club.

The G7 also agreed to ask the Chair of the Paris Club to consider inviting, on a case-by-case basis, non-member official creditors to participate in its negotiations with HIPC countries on the understanding that these creditors will join a satisfactory consensus and will abide by Paris Club principles.

The September 2002 HIPC Status of Implementation Report, prepared jointly by the staffs of the Fund and the World Bank, reported via a survey of HIPC countries on pending and completed creditor litigation. It also reported more generally on the status of creditor participation. At the Spring meetings of the World Bank and the IMF the Development Committee welcomed the recent paper by the Bank and the Fund that reviewed the difficult issues of creditor participation, including HIPC-to-HIPC debt relief and creditor litigation and welcomed the decision by the Bank to explore options to assist with HIPC-to-HIPC debt. The Development Committee agreed to discuss these issues again at the next meeting, and reiterated its request to creditors that had not yet done so to participate fully in the initiative. For its part the UK in a statement to the Development Committee by the Secretary of State for International Development and the Chancellor of the Exchequer, urged the Bank and Fund to explore further the issue of a 'donor funded' technical assistance facility to provide advice to HIPC countries facing litigation. The UK will pursue this issue and other outstanding HIPC issues such as the topping-up methodology at the forthcoming G8 summit in Evian and the next annual meetings of the Bank and Fund in September.

The September 2002 HIPC Status of Implementation Report and the paper on creditor participation issues in the enhanced HIPC initiative are available from the World Bank website at www.worldbank.org/hipc.

To ask the Chancellor of the Exchequer what progress the World Bank and the IMF have made in developing a HIPC-to-HIPC trust fund. [112919]

At the Spring meetings of the World Bank and the IMF the Development Committee welcomed the recent paper by the Bank and the Fund that reviewed the difficult issues of creditor participation, including HIPC-to-HIPC debt relief and creditor litigation and welcomed the decision by the Bank to explore options to assist with HIPC-to-HIPC debt. Where HIPCs find it difficult to deliver full HIPC relief due to financial constraints, one option would be a donor-financed trust fund to resolve these claims. The UK believes it is worth exploring this option further and will continue to work with the Bank and Fund to examine it in more detail.

To ask the Chancellor of the Exchequer what progress there has been on organising an international conference on innovative mechanisms for providing debt relief, as advocated by the HIPC ministerial network. [112921]

The Chancellor has 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. The IFF could also be used to help fund further debt relief for existing debts, which for some poor and indebted countries is a valuable instrument to help achieve the Millennium Development Goals.At their eighth meeting in Kigali, Rwanda on 28–29 April 2003 36 HIPC Finance Ministers endorsed the UK proposal for an International Finance Facility, and urged that its funding should be fully additional and channelled to grants. The UK is promoting the IFF through a range of international fora and the communiqué from the April 2003 G7 Finance Ministers' meeting agreed they would continue to focus on the Millennium Development goals and their financing, including facilities, with a view to progress by the Evian Summit.