World Bank and International Monetary Fund officials have backed a deal to cancel about $55bn (£31bn) of debts owed by the world’s poorest countries.
About 70% of the debt is owed to the World Bank, while the rest is owed to the IMF and the African Development Bank.
The lenders’ decision endorses an initial agreement by the leaders of the G8 industrialised states at their July summit in Gleneagles, Scotland.
World Bank head Paul Wolfowitz said the focus and effort must now shift to forging a global free-trade deal. Trade talks have stalled and officials will try to revive them in December.
The World Trade Organisation will meet in Hong Kong and try to breathe new life into the Doha round of talks that fell apart amid differences over agricultural subsidies.
“A trade agreement in Hong Kong would provide the spur for investment and economic growth that promises a lasting exit from poverty for millions, even billions, of people in developing countries,” Mr Wolfowitz said.
“We have agreement on more aid, we have consensus on debt relief - now let’s complete the picture and deliver a true development round on trade.”
Eighteen nations stand to have $40bn in debt written off initially, while $55bn could be released eventually, UK Chancellor Gordon Mr Brown said.
The countries to benefit are Benin, Bolivia, Burkina Faso, Ethiopia, Ghana, Guyana, Honduras, Madagascar, Mali, Mauritania, Mozambique, Nicaragua, Niger, Rwanda, Senegal, Tanzania, Uganda and Zambia.
A number of countries, led by Belgium and the Netherlands, had complained that not enough money was being committed by rich nations to make up for the shortfall in funds that the World Bank would face if debt repayments were forgiven.
But a joint-pledge by the G8 on Friday not to dilute the resources of the international financial institutions overcame opposition and the debtor nations could start benefiting by the end of 2005.
About 70% of the debt is owed to the World Bank, while the rest is owed to the IMF and the African Development Bank.
The lenders’ decision endorses an initial agreement by the leaders of the G8 industrialised states at their July summit in Gleneagles, Scotland.
World Bank head Paul Wolfowitz said the focus and effort must now shift to forging a global free-trade deal. Trade talks have stalled and officials will try to revive them in December.
The World Trade Organisation will meet in Hong Kong and try to breathe new life into the Doha round of talks that fell apart amid differences over agricultural subsidies.
“A trade agreement in Hong Kong would provide the spur for investment and economic growth that promises a lasting exit from poverty for millions, even billions, of people in developing countries,” Mr Wolfowitz said.
“We have agreement on more aid, we have consensus on debt relief - now let’s complete the picture and deliver a true development round on trade.”
Eighteen nations stand to have $40bn in debt written off initially, while $55bn could be released eventually, UK Chancellor Gordon Mr Brown said.
The countries to benefit are Benin, Bolivia, Burkina Faso, Ethiopia, Ghana, Guyana, Honduras, Madagascar, Mali, Mauritania, Mozambique, Nicaragua, Niger, Rwanda, Senegal, Tanzania, Uganda and Zambia.
A number of countries, led by Belgium and the Netherlands, had complained that not enough money was being committed by rich nations to make up for the shortfall in funds that the World Bank would face if debt repayments were forgiven.
But a joint-pledge by the G8 on Friday not to dilute the resources of the international financial institutions overcame opposition and the debtor nations could start benefiting by the end of 2005.
