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Developing Countries: Debts

Volume 493: debated on Thursday 4 June 2009

To ask the Secretary of State for International Development what steps his Department plans to take to assist least developed countries with their debt repayments in the current economic situation. (275923)

The Department for International Development (DFID) has re-oriented its programmes to minimise the impact of the crisis on the poorest. We help countries through our country programmes, for example through social protection programmes, and by working through multilateral organisations. We have also ensured that the recent G20 summit agreed important measures to support growth in low-income countries, such as providing $50 billion to support social protection, boost trade and safeguard development. Many countries have benefited from exceptional debt relief under the heavily indebted poor countries initiative (HIPC). Through our country programmes we are providing budget support to certain selected countries which helps them to manage their budgets.

To ask the Secretary of State for International Development what steps he plans to take in response to the United Nations Conference on Trade and Development Secretary-General’s request for a temporary moratorium on debt servicing for developing nations; and if he will make a statement. (275924)

The UK Government believe that existing mechanisms provide a thorough basis for dealing with developing countries’ debts. The heavily indebted poor countries initiative and the multilateral debt relief initiative provide comprehensive debt relief for the poorest, most heavily indebted countries committed to poverty reduction. 35 countries are currently receiving debt relief; of which 24 have received irrevocable debt cancellation.

Any country that experiences debt problems can also approach the Paris Club. This informal group of 19 sovereign creditors, which includes the UK, agrees new arrangements with countries facing difficulties through rescheduling and, for the poorest, partial cancellation.