Dáil Éireann - Volume 542 - 24 October, 2001

Written Answers. - Third World Debt.

108. Mr. Callely asked the Minister for Finance the progress of the HIPC and other initiatives in order to alleviate the burden of Third World debt; and if he will make a statement on the matter. [24828/01]

Minister for Finance (Mr. McCreevy): The HIPC initiative provides a comprehensive framework aimed at reducing the external debt stocks of heavily indebted poor countries to sustainable levels. The resources thus released are expected to support sustained economic growth and poverty reduction in these countries. The initiative covers both multilateral and official bilateral debt in roughly even proportions.

[1630] The up-to-date position on HIPC is that a total of 23 countries have reached their decision point and are benefiting from debt relief. Two of the 23 have reached their completion points and are finalising their poverty reduction strategy papers. Fifteen more countries are expected to reach decision point by the end of 2002. It is expected that about 38 countries could ultimately qualify for debt relief under the HIPC initiative. I am conscious that individual countries, at completion stage, may need to be examined on a case by case basis with a view to ensuring that they are not left with unsustainable debt.

It can be seen that considerable progress has been made in the implementation of the HIPC terms. It remains to be seen, however, whether the existing terms will be adequate for all of the countries concerned or whether further enhancements of the initiative will be required in order to bring about true debt sustainability. My Department and the Department of Foreign Affairs are keeping the progress of HIPC under close review and I take every opportunity to urge the maximum degree of flexibility and generosity on the part of the creditor countries.

I am concerned that the HIPC initiative delivers on its aims and that countries are not left with unsustainable debt. We cannot have a situation where countries that are committed to good governance and tackling poverty reduction are, after full HIPC relief, still spending an undue proportion of their budget on debt servicing or more on this than on their social programmes.

We must not lose sight of the overall aim of development in which debt is only one element. Both the Department of Foreign Affairs and my Department are working closely in preparing for the upcoming UN conference in Mexico next March on financing for development.