The Treasurer and the Minister for Foreign Affairs have announced that Australia will make a new contribution to an initiative for the worlds poorest nations to escape the burden of debt.
At the IMF/World Bank meetings being held in Washington DC today, the Treasurer said that Australia would provide an extra $A35 million and more than double its existing pledge to the Heavily-Indebted Poor Countries (HIPC) Initiative.
The HIPC Initiative is a multilateral plan to provide debt relief to the worlds poorest countries who are pursuing IMF and World Bank supported reform programs. The additional funding is aimed at providing these countries with faster, deeper and wider debt relief and to ensure that it more directly contributes to poverty reduction.
At the annual meetings in Washington the Treasurer said that the developed economies had an historic opportunity to help some of the poorest nations in the world escape from crippling debt burdens. Writing off unpayable debt will free resources for poverty alleviation and help these countries on the path to economic growth. Australia gave its full support to the proposed enhancements of the HIPC initiative.
The Treasurer noted that debt relief should not be at the expense of broader efforts to reduce poverty in the developing countries. He pointed out that a lasting reduction in debt and poverty required that nations adopt policies focused on sustained economic growth.
The Treasurer endorsed the proposal by the IMF to partially meet its costs from providing debt relief through the effective revaluation of its gold holdings as opposed to open market sales of gold.
The Minister for Foreign Affairs has applauded the efforts of the International community at the World Bank and IMF annual meetings to address the debt burdens faced by the poorest developing countries.