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The BBC's Rory Cellan-Jones
"There's already international agreement to write off 90% of the debt"
 real 28k

BBC's Chris Giles
"The campaign to end the misery of debt is starting to have a real impact"
 real 28k

Chancellor Gordon Brown
"We are creating a pattern of events that we hope will have worldwide ramifications"
 real 28k

Robert Whelan of the Institute of Economic Affairs
"The aid programme has been a massive failure"
 real 28k

Emmanual Tummisiime-Mutebile, Ugandan Treasury
"This is a tremendous boost"
 real 28k

Tuesday, 21 December, 1999, 12:17 GMT
UK pledges 5bn debt waiver

Children Crippling debt payments hamper the world's poorest countries

Chancellor Gordon Brown has promised to write off 5bn in debt owed to Britain by the world's 41 poorest nations

But the UK finance minister warned his plan would only apply to countries promising to use the money to relieve poverty.

World Debt
The announcement was made at a Downing Street seminar called to try to kick-start an agreement signed last autumn by the world's wealthiest countries to write off 60bn of Third World debt.

The government's immediate target is that 25 countries will have benefited from debt forgiveness by Britain by the end of 2000.

First countries likely to benefit

The chancellor said: ""For too long, these countries have been weighed down by the shackles of an unsustainable debt burden.

"I want these countries to go into the new millennium free from these shackles and able to invest for the good of their people in health and education."

But he warned strings would be attached to the debt write-off.

"Every country to get debt relief will have to a poverty reduction plan that the International Monetary Fund and World Bank will look at and agree and for which there will be a timetable and monitoring.

"I think it is important to establish that the debt relief does not go to military expenditure or to luxury prestige projects or to waste and bureaucracy and it actually goes to helping the poorest people in the world."

Fast-track relief for poorest

So far not one of the 41 highly indebted poor countries (HIPC) promised assistance under the plan has received any help.

brown Gordon Brown: Safeguards to ensure relief helps the poor
Mr Brown signalled last week that once any of the HIPC initiative countries started receiving World Bank and IMF assistance, Britain would forego all its bilateral debt.

His latest action will cost the Treasury 640m over the next 20 years on top of previous commitments.

The chancellor is hoping that other industrialised nations will follow Britain's lead and write off their outstanding loans.

Mr Brown wants the first four countries to qualify for debt relief - Uganda, Mozambique, Bolivia and Mauritania - to be fast-tracked so that they can start receiving assistance by the end of January.

By August, that figure is expected to rise to 10 countries and by the end of the year it should reach 25.

But critics of the plan say that there are insufficient safeguards to ensure that the benefits of debt relief do not disappear into the pockets of corrupt officials.

We are now showing we can translate the good intentions of 1999 into monumental change in the year 2000
Gordon Brown
Robert Whelan, of the free-market Institute of Economic Affairs, said: "The aid programme has been a massive failure over the last 30 years.

"The experience is that most of that money has not been used productively, much of it has been squandered and stolen.

"I don't see any reason to assume that debt relief will improve the situation."

However, the secretary of the treasury of Uganda, Emmanual Tummisiime, insisted that the debt relief programmes would be properly scrutinised.

He said that the extra money would allow his country to speed up its plans to halve the pupil-teacher ratio in primary classes from 100:1 to 50:1.

short Clare Short: Praised for providing 'moral leadership'
Uganda would also be able to ensure every primary-age child was taught in a classroom.

"It means we can now afford to have the pupil teacher ratio in two years instead of five," he said.

He paid tribute to the "moral leadership" given to the world's rich nations by Mr Brown and International Development Secretary Clare Short.

But Ms Short said that much credit for the achievement for the relief package should go to the "unprecedented" worldwide movement of churches, charities and individuals who lobbied for action.

But the director of Christian Aid, Dr Daleep Mukarji, said that although announcement was welcome, the battle against debt was far from over.

"So far, the developed world has forgiven around $100bn of Third World debt. Gordon Brown has added around $2bn dollars to this," he said.

"Christian Aid believes that at least $300bn must be forgiven to meet the UN target of halving world poverty by 2015 - a target signed up to by the British government."
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See also:
18 Dec 99 |  UK
Campaigners hail UK debt deal
20 Sep 99 |  The Economy
Brown calls for $1bn debt donation
30 Sep 99 |  World
Clinton pledges to cancel debt
08 Jun 99 |  debt
Q & A: Dropping the debt

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