n pledges extra cash for aid
(Storbritanniens finansminister) Gordon Brown has launched a fresh drive to ease poor countries debts and improve the flow of life-saving medicines to them, saying he would substantially increase Britains overseas aid budget, reports the World Bank press review Monday.
– I will announce as part of our spending review further increases in the UKs development aid budget in the years to 2008, Brown told politicians and religious leaders from around the world.
Treasury officials in London would not be drawn on how big the increase to the Department for International Developments budget – currently pounds 3,8 billion pounds – would be but said spending on HIV-Aids would rise to about pounds 500 million a year from the current 300 million pounds.
Brown may also announce a firm timetable for raising Britains spending on overseas aid to the internationally agreed target of 0,7 per cent of GDP.
In an attempt to give new impetus to the highly indebted poor countries initiative, which aims to relieve the debts of the worlds poorest nations, Brown proposed that the IMF look again at the idea of revaluing its gold reserves.
While gold is trading on world markets at over 400 US dollar an ounce, the IMFs stocks are on the books at 40 dollar an ounce. Revaluing, rather than selling, some of the gold would bolster the IMFs balance sheet and allow it and its sister organization, the World Bank, to write off more of the debts it is owed, as it did once already in 2000.
– We propose to the international community that we consider anew all options to finance further debt relief for the poorest countries, including making better use of IMF gold, the British chancellor said.
– Unsustainable debt is a burden imposed from the past on the present which is depriving millions of their chance of a future and preventing them breaking out of the cycle of poverty, illiteracy and disease, added he.
Brown repeated his call for an international financing facility (IFF) which would allow developed countries to borrow on financial markets against future aid flows, plus potentially raising an extra 50 billion US dollar (27 billion pounds) a year to spend on the millennium goals.
Meanwhile Pope John Paul II Sunday gave his blessing to Gordon Browns economic blueprint for cutting Third World debt and doubling aid to the poorest countries. The Pope, who is on vacation, sent a message expressing support for Mr Browns plan.
He said the Church “welcomes the search for innovative solutions such as the International Finance Facility”. He added: – What is needed now is a new creativity in charity so that ever more effective ways may be found of achieving a more just distribution of the worlds resources.
Brown hopes to launch the International Finance Facility next year, when Britain holds the presidency of the Group of Eight industrial nations. Both he and British Prime Minister Tony Blair have said they will use the presidency to push debt relief and improve aid to developing countries. Some 50 countries have said they support the plan.
The International Finance Facility would aim to raise 50 billion US dollar in additional aid each year through the use of bonds. The money raised from the bond issues would go to developing nations, but the bonds themselves would be paid back by the donor countries over a 30-year period.
This comes as that burden still strangles the poorest countries. A dozen governments of impoverished countries, nearly all of them in Africa or Central America, will have to use more than 15 per cent of their revenue to service official foreign debt in 2004.
Under the enhanced HIPC program, agreed by the Group of Seven top industrial countries in 1999 after a campaign by the Chancellor, Gordon Brown, about 35 billion US dollar (19 billion pounds) of debt has been forgiven by multilateral agencies such as the World Bank and the International Monetary Fund as well as by individual countries.
So far, however, only about a third of the potential debt cancellation has been agreed. Many countries are still on the way to creating the stable, sustainable finances needed to qualify for full relief under the scheme.
Others, such as Guinea and the Gambia, have fallen by the wayside, and a few, including war torn Somalia and Myanmar (Burma), remain beyond the pale.
Kilde: www.worldbank.org
