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Debts: Developing Countries

Volume 463: debated on Thursday 19 July 2007

To ask the Chancellor of the Exchequer what processes and consultations his Department (a) has undertaken and (b) plans to undertake to promote the proposed G8 Charter on Responsible Lending; and what timetable is planned. (149857)

The UK has been a leading actor in the substantial progress made by the international community to deliver debt relief. The multilateral debt relief initiative (MDRI) and the heavily indebted poor countries (HIPC) initiative have already delivered irrevocable debt relief to 22 countries, releasing resources to fund country-owned strategies for poverty reduction. Key to sustaining these benefits is to ensure that developing countries' debt management is strengthened and that all creditors' lending is responsible.

This is why the UK has been leading efforts with the Organisation for Economic Co-operation and Development (OECD) to get export credit agencies (ECAs) to agree firm guidelines on responsible lending to poor countries. In April this year we were successful in persuading OECD countries to extend the scope of the OECD statement of principles on unproductive expenditure beyond just heavily indebted poor countries (HIPCs) to also cover all IDA-only countries. As a result, at least 26 extra developing countries will now be covered by this agreement on responsible lending.

We are now taking this work forward with G8 partners, who share our commitment to ensuring responsible lending and borrowing. It is of course critical that all large official creditors, including those outside the G8, engage in this process. We will continue dialogue on this issue in the international fora in which we participate, including the OECD, the Paris Club and the G20.