Brown tells firms `match us on debt' urged to join debt campaign

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The Independent Online
MULTINATIONAL companies and the public around the world are being challenged by Gordon Brown to match the commitment of the governments of the seven leading industrial nations (G7) to Third World debt relief.

The Chancellor of the Exchequer is calling for private donations to a new trust fund after the agreement of G7 finance ministers meeting at Cologne at the weekend to write off $50bn (pounds 31bn) of the debt of highly indebted poor countries. The move cames as people in Britain staged mass demonstrations across the country against Third World debt.

Britain has already committed $171m to the fund, which must reach $2bn to finance the agreed debt relief. Earlier pledges from other countries have taken the total to about $470m, with more government donations likely to follow. Some of the financing needs will also be met by reinvesting the proceeds from the sale of $2bn of the International Monetary Fund's gold reserves.

But to meet urgent needs for additional spending on health and education in the world's poorest countries, cash must flow quickly into the fund. If it moves slowly, the interest bills will also decline very slowly, whereas getting a lot of the cash into the trust fund up front could allow poor countries to halve the level of their debt repayments.

Mr Brown will therefore appeal to individuals and to companies that benefit from the global nature of business. He will argue that the multinationals have a commercial interest in helping the desperately poor to prosper by reducing their debt burden to manageable proportions.

The deal agreed by finance ministers is due to be finalised by G7 leaders at their summit next weekend. The $50bn debt reduction is seen as a minimum, and could climb above $60bn. In addition, $20bn in lending by overseas development ministries could also be written off.

Some of the hurdles preventing poor countries from getting access to the debt relief programme have been lowered. For example, in future only three years of good economic policies will be needed to qualify, rather than six years. But other obstacles remain.

Kevin Watkins, of Oxfam, said Mr Brown must be applauded. But, speaking in London at yesterday's Jubilee 2000 rally - attended by 30,000 people protesting against Third World debt - he said: "Tony Blair now has to take personal responsibility to push the other G7 members even further."

Public concern at the debt burden has mounted over the past few years, in large part thanks to organisations such as Jubilee 2000, Oxfam and Christian Aid and, most recently, Comic Relief. Its anti-debt show was screened on BBC1 on Saturday night, ahead of yesterday's human chain.

At yesterday's rally, the Archbishop of Canterbury accused the Government of remaining silent over countries crushed by unpayable debts. "The conflict in the Balkans cost billions. If we can address one moral outrage then surely we can do something to address the silent war ... not simply deal with matters on our doorstep in Europe," Dr George Carey said. He added that politicians were rightly horrified at ethnic cleansing in Kosovo but they had not done enough to deal with the scandal of those countries who were trying to repay debts to the world's richest nations. "I believe though the political will of our Government and the governments of the world are coming to the conclusion that something should be done."

Some 90 developing countries have debts, 52 of which owe $370bn. Mozambique, the Democratic Republic of Congo, Honduras and Nicaragua are among the most-indebted.

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