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G8 closer on debt deal, split on who gets help
The Group of Eight rich nations moved closer on Saturday to a historic deal to lift Africa out of poverty, but finance ministers were still wrangling over exactly how countries should qualify for debt relief.
Britain, chairing the club of rich nations this year, is determined to seal an accord on debt relief and aid for the impoverished continent by the time G8 leaders meet in Gleneagles, Scotland, next month. But Germany and Japan were still to be convinced of the merits of a proposal that would wipe out $40 billion of the debts owed by the world's poorest nations and officials described heated exchanges between ministers late on Friday. "I am a little more optimistic, but no agreement yet," Germany's deputy finance minister Caio Koch-Weser told reporters as ministers returned to their debate an hour earlier than planned on Saturday. Britain remained optimistic on the prospects for a deal that would provide immediate debt relief for 18 of the poorest countries but officials said the G8 nations were divided on matters of principle on how to decide who should be helped. Germany wants debt relief to be considered on a case-by-case basis and argues countries should have to show they are deserving by improving governance and clamping down on corruption. Japan says blanket forgiveness would create moral hazard. GLOBAL IMBALANCES The finance ministers will also take stock of their own economic problems on Saturday morning, such as slow growth in Europe and Japan, record deficits in the United States and tension over China's currency policy. U.S. Treasury Secretary John Snow urged his Chinese counterpart Jin Renqing to scrap the yuan's exchange rate peg to the dollar. He met Jin on Friday but the appeal is unlikely to spark any rapid action. Brown said each continent had to play its part in fostering growth as the world faced the challenge of sky-high oil prices. "We will be looking at how Europe can do more economic structural reform, America can deal with the issues they know they have to deal with -- their twin deficits, Japan and its financial sector reform." Officials said they expected no change in the rich countries stance on foreign exchange markets and ministers are likely to repeat their call for greater flexibility in exchange rates. CHARITIES CAUTIOUSLY OPTIMISTIC But discussions over helping Africa were set to take over Saturday's agenda as Brown is adamant that ministers have to reach agreement. Charities said any deal would not cover all the 62 countries they say need their debts canceled for any hope of achieving United Nations targets of halving world poverty. "We certainly see it as a step forward but according to our analysis it still would provide 10 percent of the debt relief that is needed to significantly reduce poverty by 2015," said Romilly Greenhill of ActionAid on Thursday. Of the 18 countries benefiting from quick relief from any deal concluded at Gleneagles, 14 will be from sub-Saharan Africa, where millions die each year from disease and poverty. British Treasury officials said a further nine impoverished countries could qualify for assistance within 12 to 18 months and there were potentially 38, mostly African, nations that might benefit, for total debt relief of $55 billion. But Britain's other main proposal -- doubling aid to Africa -- looked unlikely to make any progress at this meeting and would probably be pushed back to Gleneagles. Pop star Bob Geldof and others are urging a million people to turn up in
Scotland next month to demand a deal on debt relief and aid for
Africa. |
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