World Bank agrees on 37-billion-dollar debt relief plan
The World Bank approved Tuesday debt relief totalling 37 billion dollars under its part of a G8 initiative to ease the crushing financial burden faced by some of the world's poorest nations.
The decision still needs to be approved by the Bank's International Development Association (IDA), its main lending arm, to entrench promises by the powerful Group of Eight nations to cancel poor nations' debts.
But World Bank chief Paul Wolfowitz hailed the agreement by the organisation's board of directors, which should free up much-needed funds in the countries for health and education spending.
"This is a historic agreement combining increased financing with debt relief, which will help poor countries meet the (UN) Millennium Development Goals," he said in a statement.
Once it wins approval from the IDA's board, the initiative would uphold the World Bank's share in the debt relief programme announced to much acclaim by the G8 powers at a summit in Scotland in July last year.
Most of the debt owed by the world's poorest 40 countries -- which now stands at more than 56 billion dollars -- is owed to the World Bank, with the rest owed to the International Monetary Fund and the African Development Bank.
The IMF has already endorsed its part of the bargain, which initially covers 17 countries that have qualified as Heavily Indebted Poor Countries (HIPC).
The countries are Benin, Bolivia, Burkina Faso, Ethiopia, Ghana, Guyana, Honduras, Madagascar, Mali, Mozambique, Nicaragua, Niger, Rwanda, Senegal, Tanzania, Uganda and Zambia.
Campaigners, who have complained at the slow pace of implementing the G8 promise of debt relief, gave a qualified welcome to the World Bank announcement.
Neil Watkins, national coordinator of the activist organisation Jubilee USA, said "several countries will have to keep making non-refundable debt payments to the World Bank, even after reaching (HIPC) completion point".
"This is unacceptable," he said, calling any further delay to the promised debt relief "deadly".