Important note: Information in this article was accurate in 2005. The state of the art may have changed since the publication date.
Wall Street Journal - June 9, 2005
Greg Hitt, greg.hitt@wsj.com
WASHINGTON -- One month before a pivotal summit of leaders of the Group of Eight leading nations, the pace of negotiations appears to be quickening toward providing debt relief to the world's poorest countries.
The U.S. and U.K. moved closer to agreement this week on a plan to cancel about $34 billion in loans owed by 38 developing nations to the World Bank and the African Development Bank, raising hopes for a broader deal to boost international assistance to the developing world. Many details remain to be fleshed out, though, and the acting U.S. Treasury undersecretary for international affairs, Randal Quarles, said he expects "quite serious and concrete" discussions on the debt initiative when G-8 finance ministers meet this weekend in London.
"There isn't a deal yet," Mr. Quarles said, and broader discussions must take place among all G-8 partners.
The outlines of a debt-cancellation plan began to emerge this week during British Prime Minister Tony Blair's visit here. As part of the framework under discussion, the U.S. is agreeing to support an increase in financial resources for the two development banks, to ensure that they aren't undermined by the loan write-offs, a major concern of top bank officials and other world leaders. Among the issues up in the air: how much the added support will total. Though there are differences, Mr. Quarles stressed the U.S. commitment to making the institutions whole.
Canceling debt for the world's poorest countries is part of a broader agenda for the G-8 summit aimed at shoring up support for the developing world. As part of that, the U.K. is pushing for a big boost in aid to Africa.
Little is known about the details of what that package might include, let alone what the U.S. role in the initiative will be. But President Bush has made clear his intention to be supportive, and U.S. officials have privately discussed the idea that broader investments in combating AIDS could be part of the plan. (See related article) Another idea under consideration among Bush aides: making investments in infrastructure, such as roads and ports, in support of Africa's farm economy. No final decisions have been made.
Treasury Secretary John Snow is leading the U.S. delegation to the meeting in London this weekend. Also attending will be the finance ministers of China, India, Brazil and South Africa, as they did at a ministerial meeting of the G-8 in February. The group's permanent members are Canada, France, Germany, Italy, Japan, Russia, the U.S. and the U.K.
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