HISTORIC PRESS RELEASE : Government to Remove Burden of Debt from Poorest Countries [December 1999]

The press release issued by HM Treasury on 21 December 1999.

The Government is to lift the burden of debt owed to the UK by the world’s poorest countries, the Chancellor Gordon Brown and International Development Secretary Clare Short announced today.

The commitment covers all debt owed to the Government’s Export Credit Guarantee Department (ECGD) by the 41 Heavily Indebted Poor Countries (HIPCs), including debt which falls outside the terms of the multilateral debt agreements. Britain’s debt relief package to the world’s poorest countries now totals over £5 billion.

The Chancellor, speaking at a Downing Street seminar attended by religious leaders and heads of non-governmental organisations, 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.

“The UK has played a leading part in securing a multilateral deal on debt relief that will reduce the debts of these countries by two-thirds. The time is now right to take the extra step on our own and to lift the burden of the remaining debt owed to us. I have therefore taken the decision that we will remove the burden of debt to the UK government of all countries that come through the HIPC process.

“The Government is satisfied that the conditions of debt relief applied under HIPC are sufficient to guarantee that monies freed up will be spent on social programmes and poverty reduction.”

The Chancellor said that he hoped other countries would match the UK’s commitment and enable the world community to make even further progress on debt relief before the end of the millennium.

Stressing the link between debt relief and poverty relief, Clare Short said:

“Debt relief is crucial if we are to achieve the levels of poverty reduction to which we and the whole international community are committed. Through this new action Britain is continuing to lead international efforts to reduce the debt burden of the poorest countries and to ensure that the money saved will be spent on health and education services for some of the poorest people in the world.”

The Chancellor also said that he expected the Boards of the International Monetary Fund (IMF) and the World Bank to be announcing later that day a timetable of the first countries to receive debt relief under the enhanced HIPC initiative early in the new year. The timetable, he hoped, would include early relief for countries such as Uganda, Bolivia and Mauritania and up to seven more countries to be brought forward before the IMF’s Spring Meetings in April.