Poor countries to get debt relief Ã¢â‚¬” World Bank
This will coincide with the commencement of the bank’s new fiscal year. According to the bank, IDA is expected to provide more than US$37 billion in debt relief over the next 40 years. World Bank president Paul Wolfowitz said in a statement: “This is a historic agreement combining increased financing with debt relief, which will help poor countries meet the Millennium Development Goals” “I am particularly pleased that the Bank’s shareholders have agreed on a funding package that will help to preserve the International Development Association’s role as a cornerstone in development finance for the poor countries of the world.” The IDA board of governors was now expected to consider and vote on a resolution of approval, which the world bank president urged occur quickly to assure debt cancellation can be implemented over the summer, he added. At the July 2005 G8 Summit in Gleneagles, Scotland, G8 leaders pledged to cancel the debt of the world’s most indebted countries, most of which are located in Africa. Debt cancellation will be provided by the International Development Association of the World Bank, the International Monetary Fund and the African Development Fund to countries that have graduated (called reaching the “completion point”) from the Enhanced Heavily Indebted Poor Countries (HIPC) Initiative. Initially, 17 HIPC countries will be eligible for 100 percent debt cancellation include Benin, Bolivia, Burkina Faso, Ethiopia, Ghana, Guyana, Honduras, Madagascar, Mali, Mozambique, Nicaragua, Niger, Rwanda, Senegal, Tanzania, Uganda and Zambia. Mauritania has completed the HIPC program, but will qualify for relief after implementing key public expenditure management reforms, says the bank. The remaining HIPC countries will be eligible for debt cancellation once they have completed the requirements of the HIPC Initiative. Donors have agreed to a financing package that calls for additional donor contributions over time to ensure delivery of fresh resources for poverty reduction.