Bernard Durkan (Kildare North, Fine Gael)
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Question 285: To ask the Minister for Foreign Affairs the extent to which international agreements in regard to debt write off to the poorer countries have been honoured following the various agreements in this regard in the past five years; if he will identify the areas as yet not delivered; and if he will make a statement on the matter. [19077/07]

Michael Kitt (Galway East, Fianna Fail)
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Increasing efforts are being made to tackle the problem of debt owed by developing countries to the International Financial Institutions, in particular the World Bank, African Development Bank and IMF. The Heavily Indebted Poor Countries (HIPC) Initiative was introduced in 1996 and strengthened and enhanced in 1999. It sought the reduction of the debt burden of qualifying countries to sustainable levels but did not entail cancellation.

The Multilateral Debt Relief Initiative (MDRI), agreed by the G8 Countries at Gleneagles in July 2005 and which came into effect on 1 July last year, goes further. It is a commitment to the cancellation of the multilateral debt owed, again to the International Financial Institutions, of many of the poorest and most indebted countries in the world. Most of these countries are in Africa. For the first time, the most powerful countries acknowledged that many poor countries need 100% debt relief if they are to address the development needs of their people seriously. This is an important basis from which we can continue to work, using either or both of the two initiatives above, for a complete and sustainable solution to the debt problem facing poor countries.

The MDRI, though it is as stated above separate from the HIPC Initiative, is linked to it operationally. To qualify for HIPC debt relief, a country must establish a track record of reform and sound policies. Under the MDRI, cancellation of eligible debts to the World Bank is granted to countries which have completed the HIPC Initiative process, i.e. have already been judged as qualified to receive debt relief.

As of April 2007, 30 countries of the 40 defined heavily indebted poor countries had received debt relief from the World Bank and IMF under the HIPC Initiative, amounting to US$41.9 billion. Twenty-two of these countries have also received MDRI debt relief from the World Bank, IMF and African Development Bank amounting to a further US$19.3 billion. The IMF has also granted debt relief to two non-HIPCs (Cambodia and Tajikistan) with very low per capita income.

It should be stressed that, while both the HIPC and MDRI agreements relate to multilateral debt owed to the International Financial Institutions, considerable amounts of bilateral debt — which are not subject to these agreements — have also been cancelled by creditor countries in recent years.

Ireland has been strongly supportive of the full implementation of debt relief and, where appropriate, cancellation. In addition to an earlier contribution of €30m towards the costs of implementation of the HIPC Initiative, we were the first country to pay its full share of the costs of the MDRI — €58.6m out of the approximately US$37 billion total cost. We will remain actively engaged in ensuring that international commitments to dealing with the debt burden on developing countries are met.