DELIVERING THE MAURITIUS MANDATE

In Ottawa today Chancellor Gordon Brown unveiled a comprehensive strategy to assist in the poorest and most vulnerable countries' efforts to reduce poverty.

The international community has made the halving of world poverty levels an overarching objective for the new millennium. For those countries burdened by debt and the legacy of conflict, we need a comprehensive approach to support them in achieving this goal. This approach should involve:

Decisions by Spring 1999 on a framework for helping post conflict countries, which will provide early financial and technical assistance; advance debt relief; and deal with arrears;
A wide-ranging review of the HIPC Initiative in mid 1999. Such a review will help to ensure that the HIPC Initiative really does provide a lasting and final exit from the burden of unsustainable debt;
Ensuring that 22 countries have reached their decision points under HIPC by the end of 1999; and
Making further progress on an international commitment to ensure that export credits will only support productive expenditure.

The UK is committed to achieving these objectives. We will press forward with this agenda at the Annual Meetings. The UK is prepared to support these policies by;

Contributing to any IDA managed trust fund for post conflict countries;
Clare Short, Secretary of State for International Development, will announce tomorrow a substantial additional contribution to the HIPC trust fund to help the African Development Bank meet its share of HIPC costs;
A willingness to contribute to international efforts to fill any financing gaps that remain to secure debt sustainability for HIPCs that require more than 80% relief from the Paris Club;
A further contribution to funding for technical assistance in debt management, to support faster resolution of debt reconciliation, and support the principle of a stronger debtor voice; and
A UK commitment to allowing export credits for HIPCs only for productive expenditure.

The Chancellor said:

"The priority now is to deliver the Mauritius Mandate. It would be a tragedy if the turmoil in emerging markets led the world to lose sight of the plight of some of poorest indebted countries."

NOTES TO EDITORS

1. The Mauritius Mandate was endorsed by the Commonwealth Finance Ministers last year. The Mandate challenged the international community to work together to resolve the problem of unsustainable debt by ensuring sufficient debt relief for heavily indebted poor countries.

2. The Mauritius Mandate set specific targets for the implementation of the HIPC Initiative that all countries eligible for relief should have entered the process of securing that relief by the new millennium ; and that three quarters of those countries should have received decisions on the level and timing of relief by the same date.

3. Nine HIPC countries have now reached the decision point under the Initiative, seven of which have sustainable debt burdens after receiving Naples Terms Stock of debt reductions. Two countries eligible for debt relief, Uganda and Bolivia, have reached completion points - Uganda in April, only 18 months after the launch of the Initiative, and Bolivia in September.

4. In order to support the HIPC Initiative, and ensure that the Mauritius Mandate targets are met, the UK Government has already:

Announced a 28% increase in DFID's aid budget over the next three years, the largest percentage increase received by any Government Department.
Given $680,000 to Debt Relief International to fund Technical assistance in poor countries;
Given $10.5 million to the HIPC Trust Fund to help finance the African Development Bank's contribution to debt relief for Uganda;
Pledged $10 million to help finance debt relief for Mozambique; and
Given $27 million and pledged $82 million over two years to Tanzania and given $16.5 million to Mozambique, to help those countries meet their service obligations to IFIs.

Press Notices 1998 July to December Index