G-7 Decision To Waive 80% Debt

Bs_logoImage
BSCAL
Last Updated : Sep 30 1996 | 12:00 AM IST

Finance ministers of the Group of Seven countries said on Saturday that they would forgive as much as 80 per cent debt under a joint World Bank-Fund initiative to help the highly indebted poor countries (HIPCs).

The World Bank and the IMF had initially hoped for debt forgiveness of as much as 90 per cent, but the idea met with a cool response from the major do-nors who were inclined to set the ceiling at 67 per cent.

The Group of Seven decision is a compromise which clears the way for swift implementation of the plan, with each potential candidate for debt forgiveness being dealt with individually.

The ministers look forward to the implementation without delay on a case-by-case basis, US treasury secretary Robert Rubin told reporters after a five-hour-long closed-door meeting with his counterparts from Canada, France, Germany, Italy, Japan and the United Kingdom.

The HIPC initiative will tackle an estimated $ 7.7 billion debt burden, much of which is borne by countries in Africa.

The World Bank will contribute $2 billion to the initiative, the IMF will put in $1.2 billion and other regional banks are expected to contribute $ 2.1 billion.The rich countries debt relief component is expected to amount to $2.5 billion.

The Bank chief had earlier predicted that the debt relief package could begin functioning as early as this year.ble>

Subscribe to Business Standard digital and get complimentary access to The New York Times

Smart Quarterly

₹900

3 Months

₹300/Month

SAVE 25%

Smart Essential

₹2,700

1 Year

₹225/Month

SAVE 46%

Super Saver

₹3,900

2 Years

₹162/Month

Subscribe

Renews automatically, cancel anytime

Here’s what’s included in our digital subscription plans

Access to Exclusive Premium Stories

  • Over 30 subscriber-only stories daily, handpicked by our editors

Complimentary Access to The New York Times

  • News, Games, Cooking, Audio, Wirecutter & The Athletic

Business Standard Epaper

  • Digital replica of our daily newspaper — with options to read, save, and share

Curated Newsletters

  • Insights on markets, finance, politics, tech, and more delivered to your inbox

Market Analysis & Investment Insights

  • In-depth market analysis & insights with access to The Smart Investor

Archives

  • Repository of articles and publications dating back to 1997

Ad-free Reading

  • Uninterrupted reading experience with no advertisements

Seamless Access Across All Devices

  • Access Business Standard across devices — mobile, tablet, or PC, via web or app

More From This Section

First Published: Sep 30 1996 | 12:00 AM IST