Black Habits - G-8 reaches deal on debt relief

Finance ministers from the Group of Eight industrialized nations have reached an agreement that is expected to wipe out $40 billion US of debt owed by 18 of the world's poorest nations.

The ministers â€“ from Canada, France, the United Kingdom, Italy, Japan, Germany, Russia and the United States â€“ announced the plan at the end of a two-day meeting in London. The agreement will be presented to their prime ministers and presidents at the G-8 summit in July. It will wipe out billions in debt owed by the countries to institutions like the World Bank and the International Monetary Fund. The countries are: Benin, Bolivia, Burkina Faso, Ethiopia, Ghana, Guyana, Honduras, Madagascar, Mali, Mauritania, Mozambique, Nicaragua, Niger, Rwanda, Senegal, Tanzania, Uganda and Zambia. It will free up money for education and health in those countries, which are mostly in Africa. They'll no longer have to pay up to $2 billion a year in interest payments. Britain led the push for debt relief. Its Chancellor of the Exchequer Gordon Brown said in a Friday television interview that he was hopeful the plan would cut Africa's debt in mere weeks. "This is not a time for timidity but a time for boldness and not a time for settling for second best but for aiming high," Brown said. The countries involved have already met strict targets of good governance. Another 20 countries could eventually be eligible for debt relief under the plan, making it worth more than $55 billion. Canadian Finance Minister Ralph Goodale took credit for Canada's role in pushing for the agreement to help the struggling countries. "Debt relief is one component, but we think it's a critical one and we are very glad that after a decade of persuasion that most of the world at least have agreed with the Canadian perspective." Goodale estimated the plans would cost Canada between $150 million and $200 million over the next five years. Delegates from non-governmental organizations, including Gerry Barr from the Canadian branch of Make Poverty History, were less excited about the debt-relief deal. "By our estimation, the amount of revenue committed to address this problem is about 20 per cent of what is needed to make a difference in global debt," Barr said.

Note: CBC News Last Updated Sat, 11 Jun 2005 22:40:42 EDT