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Commonwealth Secretariat press release

Commonwealth Finance Ministers to discuss debt crisis

27 February 2003

Finance Ministers from Commonwealth African countries are meeting in Dar es Salaam, Tanzania to discuss the sustainability of the Heavily Indebted Poor Countries Initiative (HIPC) under which the debts of some countries are reduced.

"The initiative to reduce the debts of Heavily Indebted Poor Countries resulted from the sustained efforts of Commonwealth Finance Ministers to address the debt problem of developing countries ever since this first became evident in the 1980s. By 1995 the international community recognised that heavy debt service payments were diverting resources from improving health, education and other social services in these countries and agreed to the HIPC initiative in an effort to address this problem."

During their two day meeting, which started today, the ministers will consider how debt relief can be extended to every country where the debts written off earlier have not been high enough to result in a lower debt burden.

While their meeting will concentrate on long-term debt sustainability of the HIPC programme the Ministers will also look at how factors outside their country can affect their economies and how to reduce the result of these 'external shocks'.

One area of immediate concern for the Ministers will be that of a number of smaller creditors, which are not participating in the HIPC initiative.

Ministers will also address the issue of future borrowing and debt management by HIPCs, including terms of donor financing to ensure that future debt accumulation is sustainable. They will also review their domestic debt burden and point to the need for assessing fiscal sustainability of all debt: external and domestic.

Apart from the broad theme for long-term external debt sustainability, Ministers will examine their poverty reduction strategies and consider the extent to which these have been aligned to meet the Millennium Development Goals. They will particularly pay attention to the resource, capacity and other constraints in achieving these goals.

Note to Editors:
Finance Ministers from Cameroon, Ghana, Malawi, Mozambique, Sierra Leone, Tanzania, Uganda and Zambia are expected to attend the meeting, together with representatives of the International Monetary Fund (IMF), the World Bank and other institutions.

This is the third meeting of the Commonwealth Heavily Indebted Poor Countries Forum. The previous two were in London (September 2002) and Lilongwe, Malawi (February 2002).

For further information contact Dr Indrajit Coomaraswamy, Director of Economic Affair,s who is attending the meeting. He can be reached in Tanzania from 27 February to 1 March 2003 on + 255 22 211 2416.
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