The leaders of the world’s richest nations are on course to sign a deal in the summer on debt relief, aid and trade to help the world’s poorest nations, the British government said on Sunday.
Finance ministers from the G7 developed countries agreed an action plan at the weekend. British treasury sources said there was a consensus on the need for 100% debt write-offs, extra development assistance and better access for developing countries to western markets.
The next five months would be spent resolving arguments between Britain and its partners over the details.
The United States emerged at the weekend as the biggest critic of proposals outlined by the British Chancellor of the Exchequer, Gordon Brown, for a new International Finance Facility to double aid flows and for debt relief to be part financed by a revaluation or sale of some of the huge gold reserves held by the International Monetary Fund.
”We are not convinced of the need for that [gold sales] at this time,” US Treasury Undersecretary John Taylor said.
A spokesperson for Brown said on Sunday, however, that Britain expected to make progress on IMF gold at the fund’s spring meeting in April, when a paper will be presented by the managing director, Rodrigo Rato.
He added that the various proposals for raising aid budgets — including the IFF — would be studied in the run-up to the Gleneagles summit in early July. The meeting, attended by British Prime Minister Tony Blair, United States President George Bush and other world leaders, will then have to make a decision on the best way ahead.
Steve Tibbett, spokesperson for the charity ActionAid, agreed, saying it was high time the rich nations did something concrete on debt relief rather than just talk about it or set up working groups.
”Our patience will run out if nothing is agreed in the summer. These are the guys with the chequebooks. Now we want them to come up with the cash.”
Brown was in upbeat mood on Sunday following the G7 meeting in London on Friday and Saturday. Despite pessimistic noises from the US, he said it was the first time the G7 had agreed on a 100% debt write-off, and that there was now a plan of action for the rest of Britain’s G8 presidency during 2005.
Taylor was also in conciliatory mood on Sunday, stressing that all G7 countries were united in wanting to reduce poverty. The US had a different approach, he said, in pushing for immediate, 100% cancellation of the debts owed to the World Bank and African Development Bank by the countries of sub-Saharan Africa. Other countries, including Britain, fear that that approach, which would not bring in new money, would affect the banks’ ability to lend in future.
The US government was criticised by the South African Finance Minister, Trevor Manuel, who said that President Bush’s foreign aid vehicle, the Millennium Challenge Corporation, had as yet failed to deliver a single dollar of cash to poor countries.
The British chancellor on Sunday wrote to the organisers of the Make Poverty History campaign and to church groups to report on the G7 meeting. He said the agreement on 100% multilateral debt relief would be followed up by more resources to tackle malaria, HIV/Aids and tuberculosis.
Brown wrote: ”I want to thank the churches and faith groups, and anti-debt and anti-poverty campaigners. What will be known as the ‘100% debt summit’ owes its progress to the millions who have campaigned for justice, for the strength of their resolve, the vision of their leadership, their determination in pursuit of a great cause.”
The British Treasury also announced that it was taking action on debt relief for 19 countries. Britain had agreed to pay 10% of the debts owed by the countries to the World Bank and the African Development Bank at a cost of $1-billion between now and 2015. – Guardian Unlimited Â