Dáil Éireann - Volume 665 - 30 October, 2008

Written Answers. - Debt Relief.

[706] Deputy Joe Costello asked the Minister for Foreign Affairs his view of illegal debts in developing countries; the role Ireland plays as a member of the World Bank, IMF and the Asian Development Bank in relation to bad debts; his plans to update Ireland’s debt policy; and if he will make a statement on the matter. [37684/08]

  Deputy Peter Power: The Government supports initiatives to ease or cancel the debt burden on developing countries. It is important that Ireland’s bilateral assistance to the developing world is exclusively in the form of grants rather than loans. Ireland supports the two main international instruments which address the problem of the debt burden in the developing world — the multilateral debt relief initiative and the heavily indebted poor countries initiative.

The multilateral debt relief initiative was agreed by the G8 countries at Gleneagles in July 2005 with a focus on debt cancellation. It came into effect on 1 July 2006, and provides for 100% relief on eligible debt from the World Bank, the African Development Bank and the International Monetary Fund for many of the poorest countries in the world, most of them in Africa. The aim is to relieve these countries from the burden of servicing debt and assist them in making progress on the UN millennium development goals, with the overall objective of halving global poverty by 2015.

In 2007, the Inter-American Development Bank agreed to provide similar debt relief to the five poorest countries in Latin America and the Caribbean. To date, 25 countries have benefited from debt relief under the multilateral debt relief initiative, at a cost of some $43.5 billion. Ireland demonstrated its support for the full implementation of debt relief and, where appropriate, cancellation, in 2006 by being the first country to pay its full share of the costs of the multilateral debt relief initiative of €58.64 million.

The heavily indebted poor countries initiative is implemented by the World Bank and the IMF. It was launched in 1996 to reduce the debt burden of qualifying countries to sustainable levels but does not involve cancellation of debt. Progress on the implementation of the initiative has been relatively slow. However, to date US$68 billion in debt-service relief has been approved under the initiative for 33 countries, 27 of which are in Africa. Ireland has contributed €20 million towards the cost of implementing this initiative — €6 million of this being paid this year. Ireland will remain actively engaged in ensuring that international commitments to dealing with the debt burden on developing countries are met.