Iraq's Odious Debts

Brown wants G8 to write off poor countries’ debts

Katherine Baldwin
Reuters
December 9, 2004

London: The government wants the world to write off the debts of the poorest countries, sponsor research for new malaria and AIDS vaccines and complete global trade talks during its presidency of the G8 rich nations club next year.

With London also set to chair European Union meetings in the second half of 2005, Chancellor Gordon Brown said in a speech that next year would be a “make or break year for development” as he set out Britain’s three main targets for the two presidencies.

“We must, for the sake of the world’s poorest not squander, but must seize, an opportunity to make a breakthrough on debt relief and development, on tackling disease and completing the Doha development round,” Brown said on Wednesday, according to the text of his speech.

Brown said he would press Washington next week to support both multilateral debt relief and his plan to double aid to the poorest countries, in the hope of building an international consensus by February when ministers meet in London.

He also called on all developed nations to declare a timetable for raising aid spending to 0.7 percent of gross domestic product, as Britain has pledged to do by 2013.

Aid agencies welcomed the Brown’s promise to put development issues at the forefront next year but said words needed to be backed by action.

“He must keep up the pressure on finance ministers globally, particularly in the U.S., to put global poverty at the top of their agenda,” said Chris Bain, director of CAFOD.

Humanitarian agency Oxfam said on Monday that rich countries’ failure to meet promises first made five years ago will result in 45 million children dying in the next decade.

Doubling aid

Brown says his plan for an International Finance Facility (IFF) would raise an extra $50 billion a year by issuing bonds using donors’ long-term funding commitments as collateral – effectively securitising national aid budgets.

Washington has yet to endorse it but Italy became the second G8 country last week to back the plan which Brown says is needed if Millennium Development Goals of halving world poverty and reducing infant mortality by two-thirds are to met by 2015.

Britain also wants to eliminate the outstanding debt of the poorest nations to both individual countries and supranational organisations like the International Monetary Fund.

Hopes of such a deal were dashed in October when the Group of Seven rich nations club failed to reach agreement at a meeting in October as the U.S., while favouring the idea, did not want to find new money for the proposal.

Brown also wants to agree on an Advance Purchase Scheme for potential future malaria and AIDS vaccines in order to provide funding for research and development.

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