Dáil debates

Tuesday, 15 December 2009

4:00 pm

Photo of Peter PowerPeter Power (Limerick East, Fianna Fail)

Ireland has played an important role internationally on the issue of the alleviation of the debt burden on developing countries. The Government's policy strategy was prepared jointly by the Department of Foreign Affairs and the Department of Finance, and was launched in 2002. It supports the total cancellation of the debts of the world's poorest countries. A joint review of this strategy is currently being undertaken by the two Departments and I expect it will be completed within the coming months.

It is important to note that Ireland's bilateral assistance to the developing world has always been exclusively in the form of grants rather than loans. The Government has also provided very significant resources for initiatives to ease or cancel the debt burden.

There are two main international instruments which address the debt burden on developing countries. They are the Multilateral Debt Relief Initiative, MDRI, and the Heavily-Indebted Poor Countries Initiative. The MDRI came into effect on 1 July 2006, and provides for the cancellation of eligible debt from the World Bank, the African Development Bank and the International Monetary Fund for many of the world's poorest and most indebted countries. Ireland's share of the total cost of debt relief provided by the World Bank under the initiative is €58.64 million. The Government contributed this amount in full in 2006. Ireland has also contributed over €20 million under the 1996 heavily indebted poor countries initiative, which is implemented by the World Bank and the IMF, with the objective of reducing the debt burden of qualifying countries to sustainable levels.

The aim of these international initiatives is to relieve the poorest countries from the burden of servicing debt, and help them implement effective poverty-reduction and economic growth programmes. It is important to ensure that the success of the initiatives to date is not undermined by any further irresponsible lending or borrowing by these countries. The Government supports the development of an international consensus on responsible lending and borrowing procedures and I welcome the dialogue which the World Bank has initiated with civil society groups on the complex issues involved.

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