The United States and Britain have struck a deal on erasing billions of dollars the world’s poorest nations owe to international lenders, the New York Times reported before a Group of Eight finance ministers’ meeting on Friday.
The reported deal would probably avert a clash at the London meeting over ambitious plans by Britain to free Africa from debt and poverty.
No immediate comment was available from the British and U.S. governments on the report, which said U.S. Treasury Secretary John Snow and British finance minister Gordon Brown were expected to present their deal on Friday.
British Prime Minister Tony Blair, who met President Bush in Washington this week, has declared 2005 a make-or-break year for Africa where millions die each year from disease and hunger.
The New York Times, quoting an unidentified senior official involved in the negotiations, said the U.S.-British deal removed the last impediment to a G8 accord.
The plan would free 18 countries, most of which are in Africa, from repaying an estimated $16.7 billion they owed international lenders, the newspaper said in a report on its Web site.
The Group of Eight (G8) countries are the United States, Britain, France, Germany, Italy, Canada, Japan and Russia.
Blair has demanded that poor countries’ debts be cancelled and their aid doubled.
Britain confident
Brown said in an interview with Britain’s Guardian newspaper he was confident of an accord when G8 heads of state meet at Gleneagles in Scotland in July.
“I’m still aiming for 100 percent debt relief. I’m still aiming for a doubling of aid. I’m still aiming for trade justice,” Brown told The Guardian.
“After talks with my finance minister colleagues, I believe there is a shared understanding that a resolution on the crushing burden of debt is urgent, and that at the Gleneagles summit we will reach agreement that action together on aid, trade and debt relief is essential," he said.
Sub-Saharan Africa has $230 billion in external debt and pays $12 billion a year on servicing, according to the most recent figures from the World Bank. A third of the debt is owed to multilateral lenders like the International Monetary Fund.
Britain has said that without 100 percent multilateral debt relief, the poorest countries would pay up to $27.5 billion principal and interest payments to international organizations between now and 2015.
On another front, Snow wants to persuade his Chinese counterpart Jin Renqing to scrap the yuan’s exchange rate peg to the dollar that Washington says makes it hard for U.S. companies to compete.
“For their own sake and for the sake of the global economy we are urging them (China) to move to greater flexibility,” Snow said on Bloomberg television. He is expected to meet Jin on Friday afternoon.
Snow’s words are likely to fall on deaf ears. Chinese central banker Ma Delun said in Frankfurt on Wednesday Beijing was preparing for reforms at its own pace and criticized what he called politically motivated pressure.
China, India, South Africa and Brazil have been invited to a breakfast meeting with the G8 ministers on Saturday.
