What is the Governments progress on eradicating Third World debt?
As you may know, the government s action towards eradicating Third World debt has been focused most recently on the 41 heavily indebted poor countries (HIPCs). The HIPC initiative was expanded to include 22 of these countries on 22 December 2000, which led to the IMF and World Bank cutting £23bn of debt. HIPC has also reduced annual debt servicing for 26 countries by an average of 40%. The government s progress on debt cancellation was sumarised by Clare Short, the then Secretary of State for International Development: While it is essential to deal with the problem of unsustainable debt in the poorest countries as part of our efforts to assist in eradicating poverty, complete cancellation of debt is not required; nor is it the most effective means of delivering aid resources to reduce poverty. We do not support the proposal for 100 per cent cancellation of IMF and World Bank loans, which is neither desirable nor equitable for these institutions to provide 100 per cent relief would risk
