Advertisement

Archive for Monday, September 26, 2005

Financial leaders pledge to limit world’s debt

September 26, 2005

Advertisement

— Financial leaders, wrapping up three days of talks on Sunday, nailed down a landmark plan to wipe out poor countries' debt and explored ways to limit the fallout from rising energy prices.

The gap between rich and poor nations is widening amid fresh concerns that high energy costs, exacerbated by the two recent U.S. hurricanes, could affect global growth.

In their meetings, financial officials from around the world agreed on debt cancellation, developed a strategy on energy prices, and struggled with other economic issues.

The 184-nation International Monetary Fund and the World Bank held weekend sessions, while the world's seven biggest industrial powers met as a group on Friday.

The debt plan, which cleared crucial hurdles over the weekend, could allow poor nations to increase spending on fighting poverty, improving education or buying drugs for HIV/AIDS or malaria.

The World Bank's steering committee endorsed the debt cancellation deal on Sunday, one day after the IMF.

"The path to complete debt relief has now been cleared," World Bank President Paul Wolfowitz said. The action represents "significant progress in fulfilling our promise to the world's poorest people," he said.

A product of intense international negotiations over the course of years, the plan would forgive an estimated $40 billion worth of debt for at least 18 poor countries - most of them in Africa.

"It's gratifying to see our persistence and commitment pay off," Treasury Secretary John Snow said.

The money is owed to the International Monetary Fund, the World Bank and the African Development Bank. The Group of Eight economic powers are pledging to underwrite the debt plan by covering the loan repayments lost.

Comments

Use the comment form below to begin a discussion about this content.

Commenting has been disabled for this item.