IMF's new head outlines bold plan to help poorer countries

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The Independent Online

The head of the International Monetary Fund promised campaigners yesterday that he would speed up the high profile debt relief package agreed by G7 leaders. Twenty poor countries will now see the benefits of reduced debt repayments by the end of this year.

The head of the International Monetary Fund promised campaigners yesterday that he would speed up the high profile debt relief package agreed by G7 leaders. Twenty poor countries will now see the benefits of reduced debt repayments by the end of this year.

To the delight of aid organisations and church groups, Horst Köhler added that he would like to see an even better package of debt reduction. But whether the IMF gesture will satisfy the protesters heading for Prague remains to be seen.

Mr Köhler and Gordon Brown met representatives from 30 groups, such as Jubilee 2000 and Comic Relief, in London. The new IMF chief gave them a personal commitment that his organisation would tackle the obstacles that have been delaying debt relief, and cut the interest payments that have been crippling some of the world's poorest countries.

Mali became the 10th country to qualify for reduced debt payments this week. The new IMF chief's promise means another 10 - Cameroon, Chad, Gambia, Guinea, Guinea-Bissau, Guyana, Malawi, Nicaragua, Rwanda and Zambia - should see big cuts in their interest payments to the governments of rich countries starting later this year.

The campaigners attending the seminar emerged impressed. In particular, they welcomed the IMF chief's willingness to look at whether debt relief needed to go further. "I'm personally thinking we could - we should - go a step further in debt relief, an even bolder step," he told the meeting.

Justin Forsyth, Oxfam's policy director, said: "He set out a quite radical vision which was exciting and a little surprising."

Jubilee 2000 agreed the meeting had been encouraging. Adrian Lovett, its Deputy Director, said: "Mr Köhler seems to be willing to tackle some of the obstacles slowing down the delivery of debt cancellation. That's a good start."

The Chancellor said: "There is a new energy, a new dynamism, being brought to the solution of these once seemingly intractable problems."

Much of the credit for the existence of the debt relief package, known as the highly indebted poor countries initiative, belongs to Mr Brown. The Chancellor cajoled and bullied other G7 countries into agreeing to write-off $100bn of debt owed by the poorest nations.

Debt relief has become the symbol of whether the rich countries and organisations like the IMF are sincere about making the global economy work for the poor. According to a UN estimate, the poorest countries pay their creditors a total of $60m a day.

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