World Bank Scrap Delays to Debt Cancellation 29.03.06

Nine months after the G8 debt deal, the first wave of debt cancellation has been agreed by the World Bank. Campaigners had feared that the Bank would delay any cancellation until 2007 a full 2 years after the 2005 G8 debt deal was annnounced.

The World Bank announced that sufficient donor pledges had been received for the cancellation of the debts of the 17 countries which have completed the HIPC initiative. The debt will be cancelled from 1st July 2006.

Campaigning pressure also prevented unacceptable delays in delivering debt cancellation, bringing waiting times down from a possible 15 months to at most 3 months - however during this waiting period, debt repayments will still need to be made.

Over the next 5 years, another 25 countries should become elligible for debt cancellation, including Eritrea, Haiti, Kyrgyz Republic and Nepal (all of which are currently not part of HIPC). Many more impoverished countries need debt relief without having to carry out harmful economic policies. Cut the Strings

The World Bank, unlike the IMF, will also only cancel debts incurred up to the end of 2003, rather than 2004.

Pressure works. Thanks to all who emailed or wrote to Tom Scholar at the World Bank.