HISTORIC PRESS RELEASE : Chancellor proposes G7 action on tsunami assistance [January 2005]

The press release issued by HM Treasury on 4 January 2005.

Chancellor of the Exchequer Gordon Brown today set out the proposals the UK is making as president of the G7 group of Finance Ministers on how the G7 and the international financial institutions can provide further financial assistance to countries affected by the tsunami disaster.

Gordon Brown said today:

“Our proposal is that, with immediate effect, the Paris Club should expect no debt repayment from afflicted countries. That would then lead to an analysis of the needs of these countries, with the possibility of some debt relief, at the same time ensuring that the money goes to the people and areas in greatest need. Britain has put this on the agenda for the G7 Finance Ministers meeting at the beginning of February.

“That will be backed up by two other proposals: the International Monetary Fund will offer emergency assistance; and the World Bank, which has made an initial contribution for emergency relief, will add to that substantially with money for reconstruction.

“Therefore, the $2 billion figure which has been quoted as the world’s contribution to deal with both the problems of first aid and reconstruction will rise very substantially, and Britain is going to play its part in making its contribution to that enhanced figure.

“What my discussions with the IMF, the World Bank, the US Treasury Secretary and other financial leaders over the last few days have shown to me is that we never want to be in a position again where we have to choose between emergency aid and tackling the underlying causes of poverty. The world ought to be able to do both.

“That is why I will also be putting forward proposals for a new ‘Marshall Plan’ for aid, trade and debt relief for the developing world to release sufficient resources through debt relief and through additional money to be provided by the richest countries and for trade justice so that we can deal with the underlying causes of poverty in Africa and elsewhere as well as providing the aid for reconstruction – that is why 2005 will be a critical year for development under the UK’s presidency.

“What people are realising as a result of this terrible tragedy is that what happens to the poorest citizen in the poorest country affects the richest citizen in the richest country – we are an interdependent world, one moral universe, and I think just as we see the power of nature to destroy, we have seen the power of human compassion to build, and it is on that – people’s moral sense that something has got to be done – that we build the next stage of our efforts to achieve social justice on a global scale.”