HISTORIC PRESS RELEASE : Chancellor and Clare Short welcome news that 22 of the poorest heavily indebted countries, have had their debt relief agreed [December 2000]

The press release issued by HM Treasury on 22 December 2000.

Chancellor Gordon Brown and International Development Secretary Clare Short today welcomed the news that 22 countries have now had exceptional debt relief agreed, amounting to some $50 billion.

Speaking after the IMF and World Bank announced the news, the Chancellor and Clare Short said:

“Last year we agreed the action that needed to be taken to remove the burden of unpaid and unpayable debt on the poorest countries. The IMF and World Bank committed that 20 countries would have their debt relief agreed by the end of this year, and governments of HIPC countries, as well as the international community have worked hard to achieve this. We are pleased that we have not only met, but exceeded that target. On average these countries’ debts will be reduced by two thirds.

“More importantly, this action has enabled us to take forward our efforts to tackle the extreme poverty which affects the lives of so many millions of people in these countries. It is important to remember that the measure of success is not simply the amount of debt cancelled, but the number of people who are lifted out of poverty.

“This achievement owes much to the commitment and dedication of Horst Kohler, James Wolfensohn and their staff, and the determined efforts of countries themselves to demonstrate their commitment to addressing poverty, and to using the money freed up by this debt relief to benefit the poor.”

Continuing, they stressed that the achievement announced today was an important element in the wide ranging fight to eliminate poverty:

“We must create a virtuous circle of debt relief, poverty reduction and economic growth. The achievement announced today removes a huge barrier to tackling poverty in these countries. We are very concerned that a large number of other HIPC countries are unable to qualify for debt relief either because of their involvement in conflict, or because they do not yet have clear Poverty Reduction Strategies which show how the savings from debt relief will flow to spending on poverty reduction. We call on all concerned to work for peace, so that we can begin to work together towards poverty reduction. We are committed to intensifying our efforts to help them resolve their conflicts.

“The UK, for its part, stands ready to assist, and continues to play a leading role on debt. From this month, debt payments from the HIPC countries have either stopped, or will be held in trust, to be returned later for poverty reduction. No longer will we benefit from these historic debts.”