US President Bill Clinton's surprise announcement that he wants to write off the total debt to the US of the poorest countries has been warmly welcomed by those campaigning for debt relief.
"This announcement changes everything," the Jubilee 2000 director, Ms Ann Pettifor, said. In order to meet the President's challenge to "do better", the world's leaders must meet again before the millennium, she said.
Jubilee 2000, which has branches in 50 countries, has been campaigning for debt relief to coincide with the millennium with the support of Pope John Paul II and many celebrity figures such as Irish rock musician, Bono.
British Chancellor of the Exchequer, Mr Gordon Brown last night welcomed Mr Clinton's promise to extend the US's commitment to cancel repayment of 90 per cent of outstanding government-backed export-credit loans to 100 per cent, and indicated Britain would consider following suit.
In the meantime, Irish anti-debt campaigners have criticised the Minister for Finance, Mr McCreevy, for failing to call for more radical debt cancellation at the annual joint meeting of the World Bank and International Monetary Fund.
The Debt and Development Coalition said that, instead of seeking a fresh start for the world's poorest countries, "the Minister has thrown his weight behind the meagre debt-relief scheme", the Heavily Indebted Poor Countries Initiative. This had delivered "paltry" relief to only four countries since its inception three years ago, said the coalition.
Trocaire's campaigns officer, Ms Caoimhe de Barra, said the scheme was flawed in that it linked debt relief to often harsh economic policies which had to be introduced by countries under the Enhanced Structural Adjustment Facility. This had been "cynically" renamed the Growth and Poverty Reduction programme in a move "similar to Windscale becoming Sellafield", noted Ms de Barra.
Until President Clinton's announcement at the annual International Monetary Fund/World Bank meeting, the US was supporting the decision in Cologne last June of the Group of Seven richest countries to reduce the poorest countries' debt to these institutions by 90 per cent.
Announcing that the US would now seek to write off the total debt owed to it by these countries, Mr Clinton said that "unsustainable debt is helping keep too many poor countries and poor people in poverty. I do not think we can say in good conscience that we support the idea that (poor countries) should choose between making interest payments and investing in their children's education".
The President insisted, however, that the debt would only be written off when countries pledged to use the saving to finance basic human needs such as health, food and water supplies and education. The plans would have to be approved by experts at the IMF and the World Bank.
The countries in question owe the US almost $6 billion (€5.64 billion). But in practice this amount has been written down by the US to $1 billion. President Clinton recently sent Congress a budget amendment to pay off this amount over four years.
It is not certain that Congress will vote for this measure.
Some 36 heavily indebted countries are eligible for the US total debt relief, mainly in subSaharan Africa. But officials said that four of them - Liberia, Somalia, Sudan and Myanmar - might have trouble qualifying because of ineffective governments.
