In Dicta

Sunday, September 25, 2005

Good news in the global war on poverty

"Finance ministers from around the world reached agreement on Saturday on a plan to wipe out as much as $55 billion in debt owed by impoverished countries. (...)

The agreement, which will initially affect about 18 countries, came after two years of grinding debate between the United States, Japan, Britain and most of the wealthy nations in Europe. (...)

If all goes according to plan, the 18 highly indebted low-income countries could be freed as early as the end of this year from the need to repay a total of about $1 billion a year in interest and principal. (...)

The criteria for eligibility was one of the most difficult issues, with the United States, Japan and Germany adamantly opposed to opening the door to an ever-expanding list of nations.

When the plan was first hammered out last summer by the United States and Britain, the idea was to make it available to countries that are currently categorized as "highly indebted poor countries."

But fund officials said eligibility had to be based on a specific formula that would apply the same standards to all countries.

The exact criteria remained unclear on Saturday, though Mr. Brown said it was based on a nation's per capita income. In addition to being poor, however, a government has to follow "sound" economic policies and meet standards for good governance.

The immediate goal of the plan is to give hopelessly indebted nations a chance to wipe the slate clean. The broader goal, supported by the Bush administration and a broad coalition of anti-poverty activists, is to shift future aid to outright grants and away from loans."

From The New York Times.


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