Sun, Dec 19, 2004 - Page 11 News List

UK treasurer touts bold offer to poor countries

DEVELOPMENT Gordon Brown suggested that rich nations wipe out poor countries' unpayable debts if they fight corruption and promote private investment


British treasury chief Gordon Brown urged the world's richest nations to make a bold offer to poor countries: If they fight corruption and promote development and private investment, the rich will wipe out 100 percent of their debt that is unpayable and dismantle trade barriers.

He said rich nations would also have to come up with an extra US$50 billion a year to meet the UN development goals, including halving poverty, ensuring that every child has a primary school education and halting and reversing the AIDS epidemic, all by 2015.

In a speech on Friday to the Council on Foreign Relations, Brown proposed a modern day equivalent of the US Marshall Plan that helped rebuild Europe after World War II and said it would be a cornerstone of Britain's presidency of the Group of Eight industrialized nations as well as the EU next year.

"It is an offer made for security, economic and moral reasons," he said. "It is an offer that requires accountability and transparency from the poorest countries to justify development aid. It is an offer ... whose generosity ... [would] show the world that we, the richest countries, are ready to march forward with the poorest countries under the banner of liberty, democracy and opportunity for all."

In addition to achieving "a major assault on poverty in the poorest countries," Brown said the plan could help fight terrorism more successfully by combining "economic and social vision" with military and security measures.

Currently, US$80 billion of debt is owed by the world's poorest countries to the International Monetary Fund, the World Bank and the African Development Bank.

Brown proposed that the IMF debt write-off be financed by using IMF gold and that donor countries "make a unique declaration that they will, on this occasion, repatriate their share of World Bank and African Development Bank debts owed by eligible developing countries."

He also said it was vital to complete the round of trade talks started in Doha, Qatar, in 2001, aimed at slashing subsidies, tariffs and other barriers to global commerce.

"Reducing tariffs and achieving the ambitious pro-poor trade agreement promised at Doha could boost the world's yearly income by over US$500 billion," he said. "And while developing countries could gain the most, all countries and regions stand to benefit."

Brown said it is also time for the richest countries to agree to open markets, remove trade-distorting subsidies "and in particular, do more to tackle the scandal and waste of the European Common Agricultural Policy, showing we believe in free and fair trade."

But he said progress on debt relief and increasing trade must go side by side with efforts to reduce poverty and improve health and education for the world's poor, and he urged other countries to back his proposal for an International Finance Facility to finance the achievement of the U.N. development goals adopted in 2000.

The richest countries have already pledged an additional US$16 billion (euro12 billion) a year and the facility would leverage this money to raise the amount of development aid between now and 2015 by US$50 billion (euro37.7 billion) a year, Brown said.

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