The World Banks directors has approved a 37 billion US dollar (229 milliarder DKR) debt relief package for poor countries, many of them in Africa, after resolving on Tuesday how the international lending institution will find money for future loans, reports the World Bank press review.
– This is a historic agreement, combining increased financing with debt relief, which will help poor countries meet an internationally agreed set of development goals, said Paul Wolfowitz, the Banks president.
He was “particularly pleased that the Banks shareholders had agreed on a funding package that will help to preserve the International Development Associations (IDA) role as a cornerstone in development finance for poor countries of the world.”
The approval brings to an end months of tough negotiations among the World Banks biggest donors over how to fund future loans by the IDA, the Banks low-interest lending arm.
The 40-year term of debt cancellation will begin on July 1. It will cover debt service payments of 17 countries to the World Bank on debt accumulated to the end of December 2003, allowing governments to increase spending on programs that reduce poverty.
“The package covers countries that graduated from the Heavily Indebted Poor Countries (HIPC) Initiative, a global debt relief plan approved in 1996 that was based on good economic performance. Mauritania would not be covered under Tuesdays decision until its government strengthens its public expenditure management, a World Bank official said. However, the country could still qualify by July.”
The decision still needs to be approved by the IDA Board of Governors. Once it wins approval from IDAs Board, the initiative would uphold the World Banks share in the debt relief program announced by the Group of Eight powers at a summit in Scotland in July last year.
Most of the debt owed by the worlds poorest 40 countries – which now stands at more than 56 billion US dollar (347 milliarder DKR) – is owed to the World Bank, with the rest owed to the International Monetary Fund and the African Development Bank. The IMF has already endorsed its part of the bargain, which initially covers 17 countries that have qualified as HIPC.
The 17 countries eligible for 100 percent debt relief are Benin (P), Bolivia (P), Burkina Faso (P), Senegal, Guyana, Tanzania (P), Mozambique (P), Nicaragua (P), Niger, Mali (P), Rwanda, Ethiopia, Honduras, Ghana (P), Uganda (P), Zambia (P) and Madagascar.
10 af dem er danske programsamarbejdslande i u-landsbistanden. De er markeret med et P.
Kilde: www.worldbank.org
