Britain upbeat on African debt relief at G8 meeting

LONDON – Group of Eight finance ministers are considering using money raised by International Monetary Fund gold sales in the 1990s to write off poor countries’ debt to the lender, a G7 official told Reuters on Friday.

The official said this would be worth around US$6 billion (N$40,8 billion). The proposal may go some way to alleviating fears in the gold market that G8 nations wanted the IMF to sell more of its gold reserves.In addition, the official said there was already a plan for 18 poor countries’ debt to the World Bank and African Development Bank to be written off.This would total around US$18 billion and a further nine countries could have hope of also becoming eligible for debt relief.That would still leave the number of countries being helped short of the 62 countries that aid agencies say need debt relief.Meanwhile, Britain appealed on Friday for a big push to rid Africa of disease and poverty, but finance ministers from the world’s richest nations meeting in London looked unlikely to fulfil the continent’s hopes.”Aid can make the difference between life and death…there is a will to come to an agreement,” Finance Minister Gordon Brown told BBC radio ahead of talks where he said he hoped to broker a deal.”Much is still to be done.”At stake was Prime Minister Tony Blair’s pledge to make 2005 the year the world’s wealthy dig into their pockets to write off debts and fund a doubling of aid for Africa, where millions die every year from AIDS, malaria and malnutrition.The finance ministers, meeting on Friday and Saturday, were also to take stock of their own economic problems, such as slow growth in Europe and Japan, record deficits in the United States and tension over competition from rising star China.The focus, however, was on Africa at the meeting of G8 finance ministers from the United States, Canada, Japan, Germany, France, Italy, Britain and Russia.Brown has personally championed the African cause and issued proposals for debt-write offs and doubling aid to US$100 billion a year, though many commentators believe the problem will end up in Blair’s lap as the deadline of a July G8 summit looms.Brown acknowledged as much in his radio interview, but said he hoped to secure a deal on the debt front in the London talks and stressed that all those and many other countries had signed up in 2000 to UN targets of halving world poverty by 2015.Even a comprehensive debt deal in London may be tough.A German government official said in Berlin on Thursday he did not expect a final decision on debt relief at the weekend.A Canadian official said much the same in Ottawa on Wednesday.British officials were hopeful that a partial US-UK deal on debt for some African countries would secure wider progress and backing among G8 finance ministers for reductions in the amount Africa owes to international lending agencies.Brown said countries like Malawi were being crippled by AIDS but had to spend more repaying debt than on healthcare.Other finance ministers have other issues to promote too, one of them being to keep pressure on China, now the world’s seventh-largest economy, to play it fairer in world trade.Trade tensions are rising as Chinese clothes exports to the rest of the world surge and Beijing is under pressure for using state controls to keep its currency value low and exports cheap.US Treasury Secretary John Snow urged Chinese counterpart Jin Renqing, who attends the meeting, to scrap the yuan’s exchange rate peg to the dollar.”For their own sake and for the sake of the global economy we are urging them to move to greater flexibility,” Snow said on Bloomberg television on Thursday.He was to meet Jin on Friday but the appeal is unlikely to spark any rapid action.Chinese central banker Ma Delun said on Wednesday Beijing was preparing for reforms at its own pace and criticised what he called politically motivated pressure.China, India, South Africa and Brazil have been invited to a breakfast meeting with the G8 ministers on Saturday.Pop star Bob Geldof and others are urging a million people to turn up in Scotland next month to demand a deal on debt relief and aid for Africa, piling the pressure on the G8 leaders and on Brown and the other financiers meeting in London.Sub-Saharan Africa has US$230 billion in external debt and pays US$12 billion a year on servicing, according to the most recent figures from the World Bank.A third of the debt is owed to multilateral lenders like the International Monetary Fund.Britain has said that without 100 per cent multilateral debt relief, the poorest countries would pay up to 15 billion pounds principal and interest payments to international organisations between now and 2015.Blair’s spokesman said this week about 25 countries would benefit while charities say 62 countries need urgent debt help.But France, Germany and Japan have their own proposal, which would mean debt relief for only five countries.-Nampa-ReutersThe proposal may go some way to alleviating fears in the gold market that G8 nations wanted the IMF to sell more of its gold reserves.In addition, the official said there was already a plan for 18 poor countries’ debt to the World Bank and African Development Bank to be written off.This would total around US$18 billion and a further nine countries could have hope of also becoming eligible for debt relief.That would still leave the number of countries being helped short of the 62 countries that aid agencies say need debt relief.Meanwhile, Britain appealed on Friday for a big push to rid Africa of disease and poverty, but finance ministers from the world’s richest nations meeting in London looked unlikely to fulfil the continent’s hopes.”Aid can make the difference between life and death…there is a will to come to an agreement,” Finance Minister Gordon Brown told BBC radio ahead of talks where he said he hoped to broker a deal.”Much is still to be done.”At stake was Prime Minister Tony Blair’s pledge to make 2005 the year the world’s wealthy dig into their pockets to write off debts and fund a doubling of aid for Africa, where millions die every year from AIDS, malaria and malnutrition.The finance ministers, meeting on Friday and Saturday, were also to take stock of their own economic problems, such as slow growth in Europe and Japan, record deficits in the United States and tension over competition from rising star China.The focus, however, was on Africa at the meeting of G8 finance ministers from the United States, Canada, Japan, Germany, France, Italy, Britain and Russia.Brown has personally championed the African cause and issued proposals for debt-write offs and doubling aid to US$100 billion a year, though many commentators believe the problem will end up in Blair’s lap as the deadline of a July G8 summit looms.Brown acknowledged as much in his radio interview, but said he hoped to secure a deal on the debt front in the London talks and stressed that all those and many other countries had signed up in 2000 to UN targets of halving world poverty by 2015.Even a comprehensive debt deal in London may be tough.A German government official said in Berlin on Thursday he did not expect a final decision on debt relief at the weekend.A Canadian official said much the same in Ottawa on Wednesday.British officials were hopeful that a partial US-UK deal on debt for some African countries would secure wider progress and backing among G8 finance ministers for reductions in the amount Africa owes to international lending agencies.Brown said countries like Malawi were being crippled by AIDS but had to spend more repaying debt than on healthcare.Other finance ministers have other issues to promote too, one of them being to keep pressure on China, now the world’s seventh-largest economy, to play it fairer in world trade.Trade tensions are rising as Chinese clothes exports to the rest of the world surge and Beijing is under pressure for using state controls to keep its currency value low and exports cheap.US Treasury Secretary John Snow urged Chinese counterpart Jin Renqing, who attends the meeting, to scrap the yuan’s exchange rate peg to the dollar.”For their own sake and for the sake of the global economy we are urging them to move to greater flexibility,” Snow said on Bloomberg television on Thursday.He was to meet Jin on Friday but the appeal is unlikely to spark any rapid action.Chinese central banker Ma Delun said on Wednesday Beijing was preparing for reforms at its own pace and criticised what he called politically motivated pressure.China, India, South Africa and Brazil have been invited to a breakfast meeting with the G8 ministers on Saturday.Pop star Bob Geldof and others are urging a million people to turn up in Scotland next month to demand a deal on debt relief and aid for Africa, piling the pressure on the G8 leaders and on Brown and the other financiers meeting in London.Sub-Saharan Africa has US$230 billion in external debt and pays US$12 billion a year on servicing, according to the most recent figures from the World Bank.A third of the debt is owed to multilateral lenders like the International Monetary Fund.Britain has said that without 100 per cent multilateral debt relief, the poorest countries would pay up to 15 billion pounds principal and interest payments to international organisations between now and 2015.Blair’s spokesman said this week about 25 countries would benefit while charities say 62 countries need urgent debt help.But France, Germany and Japan have their own proposal, which would mean debt relief for only five countries.-Nampa-Reuters