Dáil Éireann debate -
Wednesday, 10 Nov 1999

Vol. 510 No. 4

Written Answers. - HIPC Initiative.

Jack Wall

Question:

46 Mr. Wall asked the Minister for Finance the specific proposals Ireland is putting forward with regard to the cancellation of some of the debts of poorest countries; the specific contribution or gesture Ireland plans to make in this regard in view of his speech to the annual joint meeting of the International Monetary Fund and the World Bank; and if he will make a statement on the matter. [22705/99]

Minister for Finance (Mr. McCreevy)

Deputies will be aware that Ireland has been very active in seeking the reform and enhancement of the Highly Indebted Poor Countries Initiative, which is the World Bank and International Monetary Fund's vehicle for the alleviation of the debt problem affecting many of the poorest countries in the world. Proposals were submitted by the Department of Finance during the review of this initiative which was conducted earlier in the year.

In these submissions, and in my speech to the annual meetings of the World Bank and International Monetary Fund, I stressed that the these institutions should seek to ensure that debt relief measures take full account of the social dimension, embrace widespread consultation in the countries in question, and encourage sustainable economic development. I also argued for greater flexibility in the implementation of the HIPCs Initiative, as well as for speedier implementation, and application to as wide a range of the heavily indebted poor countries as possible. I pointed out that definitions of debt sustainability should be broadened to take human, as well as economic, development into account and that the two recent evaluations of the ESAF Facility emphasise the need for the IMF to take full account of the social impact of policies in the design and implementation phases of macroeconomic and structural adjustment programmes. I pointed out that the most vulnerable sections of the community must be afforded special consideration, with safeguards against the most severe consequences of structural adjustment policies.

Following the review of the initiative it has been substantially enhanced. The amount of debt relief on offer has been doubled and a wider range of countries is to get faster and deeper relief. While these enhancements have significantly improved the initiative, there is still room for further improvement and I made this clear in my recent speech to the annual meetings. At the same time, the enhancements which have been adopted have greatly increased the cost of the initiative and my immediate concern is to ensure that the enhanced initiative is adequately financed to allow it to be implemented as soon as possible.

As far as Ireland's own financial contribution to the initiative is concerned, the passage of the Bretton Woods (Amendment) Act earlier this year has allowed us to move from an advocacy role in relation to debt relief and become a direct contributor. This has given us increased moral authority to call for increased efforts by the international community to reduce the burden of debt on third world countries to the greatest extent possible.

Ireland is also participating in the alleviation of bilateral debt in relation to some of our priority aid countries even though our own bilateral assistance has been in the form of grants.