Brendan Howlin (Wexford, Labour)
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Question 192: To ask the Minister for Foreign Affairs his views on the ongoing burden of international debt on poorer countries; the way he considers that this burden affects African countries in particular; if he will provide details of any policy initiatives currently being formulated by him for the purpose of addressing this issue at international level; and if he will make a statement on the matter. [36406/09]

Peter Power (Limerick East, Fianna Fail)
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Ireland has played an important role internationally on the issue of alleviation of the debt burden on developing countries. The Government's policy strategy, which was prepared jointly by the Department of Foreign Affairs and the Department of Finance, was published in 2002. It supports the total cancellation of the debts of the world's poorest countries. A review of the strategy is now being undertaken by the two Departments and I expect it will be completed by the end of 2009.

Ireland's bilateral assistance to the developing world is strongly focused on the poorest countries in sub-Saharan Africa, and has always been exclusively in the form of grants rather than loans. The Government has also provided significant resources for initiatives to ease or cancel the debt burden on developing countries. The two main international instruments which have been established to address the issue are the Multilateral Debt Relief Initiative (MDRI) and the Heavily Indebted Poor Countries (HIPC) initiative. The MDRI came into effect on 1 July 2006, and provides for 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. To date, 25 countries have benefited from debt relief under the MDRI. 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 to the HIPC 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. Overall, some $70 billion in debt service relief has been approved under the HIPC initiative for 33 countries, 27 of which are in Africa.

I am concerned that progress achieved on the debt problem could be undermined by the impact of the economic crisis. Some of the Least Developed Countries, particularly in Africa, are now facing serious short term difficulties in financing basic services. The IMF estimated earlier this year that the 25 Least Developed Countries which have been most seriously affected by the economic crisis already face a $25 billion budgetary shortfall in 2009.

I welcome the work now underway in the World Bank to develop a Crisis Response Facility which would provide quick and effective assistance for the most vulnerable countries in the face of economic crisis. I also believe it is important to ensure that these international efforts, and the efforts of the developing countries themselves, are not undermined by further irresponsible lending or borrowing. 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 opened with civil society groups on the complex issues involved.

Ireland will remain actively engaged on the debt issue internationally. In particularly, we want to ensure that the IMF and the World Bank continue to help low income countries meet their development financing needs without re- accumulating unsustainable levels of debt.