imported post
The Group of Seven wealthy nations pledged...
By Sumeet Desai and Stella Dawson
Reuters
Saturday, February 5, 2005
http://www.reuters.com/newsArticle.jhtml?type=topNews&storyID=7547048
LONDON -- The Group of Seven wealthy nations pledged to
increase Third World debt relief on Saturday but a deal
struck after major disagreements fell short of proposals
floated by British finance minister Gordon Brown.
"We are willing to provide as much as 100 percent debt relief
on all multi-lateral debt for individual HIPC countries,"
Brown told a news conference, referring to dozens of Highly Indebted Poor Countries, most of them in Africa.
"It is the rich countries hearing the voices of thepoor...showing that no injustice can last forever," he
said.
Brown, who chaired the G7 talks, had pushed for a complete
write-off of African debt and a doubling of aid to $100
billion a year but the latter proposal ran into U.S.
opposition and there was no agreement on it.
Sub-Saharan Africa owes around $70 billion to multilateral lenders such as the World Bank and International Monetary
Fund and Brown said these public agencies would now have
to come up with plans on how to deliver on the debt relief pledge.
Washington had also objected to his proposal to use IMF
gold reserves to fund the debt writeoff and to a new
financing mechanism that would double aid. A G7 communique
said the IMF would produce ideas on this front by April.
G7 nations are under intense pressure to deliver on
promises to rid Africa of poverty by 2015, the so-called Millennium Development Goals.
"We will make particular efforts in the case of Africa,
which on current rates of progress will not meet any of the Millennium Development Goals by 2015," the communique said.
Brown had wanted approval for his International Finance
Facility (IFF) scheme to double aid to Africa to $100 billion a year but got no U.S. backing and others were cautious too.
The compromise deal followed an emotional appeal from
South Africa's Nelson Mandela in London, where he equated
the fight against poverty to the struggle against apartheid.
"Do not delay while poor people continue to suffer," the
86-year-old former political prisoner said, demanding a full debt write-off and $50 billion extra a year as Brown proposed.
U.S. Treasury Under Secretary John Taylor said he disagreed
with the Brown plan, under which rich countries would provide guarantees to raise money in the capital markets and use gold reserves to fund a debt writeoff.
In the wake of the U.S. opposition, Italy and Germany
pushed for something less ambitious but backed the principle.
The G7 comprises the United States, Japan, Germany, Britain, France, Italy, and Canada.
The bulk of the meeting was devoted to the Third World but
the ministers also discussed ways of reducing volatility in the oil market after prices hit record highs last October.
They also discussed currency management and economic risks
and did not stray from a year-old policy statement which
called for less volatile currency markets and greater exchange rate flexibility.
The latter point is aimed mainly at China, which sent its finance minister and central bank officials to meet G7
members.
"We are determined to move toward a flexible exchange rate,
but no timetable," Chinese central bank deputy governor Li
Ruogu told reporters after breakfast talks.
Beijing says it is not going to rush into altering its yuan
peg to the dollar, which many say keeps the yuan artificially low and makes life unfairly difficult for other trading nations.
"We discussed the issue of exchange rate flexibility with China," Brown said. "We are all interested in the role China is playing in the global economy."
