In late-night negotiations, Gordon Brown persuaded other countries to contribute a further $300m, taking the total close to the $90bn target. In his speech to the Labour Party Conference today, the Chancellor will say: "There can be no better demonstration of Labour values than that yesterday a unique joint committee of the World Bank and IMF agreed with our party's policy that in the millennium year the world will be writing off more than $100bn, more than two-thirds of the debt of the poorest countries."
The initiative for the Highly Indebted Poor Countries is part of a shift in policy by the World Bank and the IMF to help reduce poverty, which they claim as a radical departure but which development groups say is miserably inadequate.
The IMF, which is contributing about $2bn, has found ways to meet its part of the contribution to the scheme from its own resources, including a planned sell-off of its gold. This will not be done on the international market, meaning that gold prices should be unaffected.
Finance ministers from the G7 also signalled a shift in strategy by the international financial institutions to give more weight to poverty when they make policy. "We emphasise the importance of a new, co-ordinated approach by the World Bank and the IMF to support ... a growth-oriented strategy aimed at reducing poverty and stressed the importance of its effective implementation," they said.
n Ecuador was expected to make a statement last night about whether it would default on its Brady bond debt, an important signal of how far developing countries will shift the burden of adjustment back onto bankers. Brady bonds were supposed to be inviolable, but Ecuador has found the payments impossible to sustain.Reuse content