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Officials proceed on debt relief

Wealthiest nations blamed for delay

WASHINGTON -- Concluding two days of talks, finance officials from the leading economic powers pressed ahead yesterday with efforts to wipe out poor nations' debts and hoped to complete a deal later this year.

Officials insisted they were making progress. But international aid groups, disappointed by the failure to finalize an agreement over the weekend, accused the major industrialized countries of dragging their feet and said further delay could worsen the plight of the world's poorest people.

Erasing the crushing debt load was among the issues discussed by finance representatives at the meetings of the 184-nation World Bank and the International Monetary Fund.

The meetings concluded the same day the World Bank released a report saying almost 11 million children in developing countries die each year before the age of 5, most of them from causes that are preventable in wealthier countries. The causes include acute respiratory infection, diarrhea, measles, and malaria, which together account for 48 percent of child deaths in the developing world, according to the report, called ''World Development Indicators."

''Rapid improvement before 1990 gave hope that mortality rates for infants and children would be cut by two-thirds in the following 25 years," the report said, ''but progress slowed almost everywhere in the 1990s."

The report said only 33 countries are on track to reach the 2015 goal of reducing child mortality rates by two-thirds from 1990 levels. It said only Latin America, the Caribbean, Europe, and Central Asia may be on track to achieve the target.

The concept of erasing debt load won the endorsement of financial leaders from the world's seven wealthiest countries -- United States, Japan, Germany, France, Britain, Italy, and Canada -- who met Saturday in Washington.

The United States and Britain have offered competing plans, but officials have failed to settle differences, mainly over how to pay for debt relief.

Under the US approach, the poorest countries would not have to repay loans to the World Bank, the IMF, and the African Development Bank.

The Bush administration also wants future aid to come in the form of grants, which do not have to be repaid, rather than loans.

''Our proposal not only drops the debt of yesterday, but prevents debt from burdening countries again well into the future," Treasury Secretary John W. Snow said yesterday.

Critics say that deprives the lending institutions of additional money to compensate for loan repayments no longer required.

Britain's proposal would rely on a greater financial commitment to the World Bank and the IMF by rich nations.

Some outside advocates want the IMF to sell part of its massive gold reserves to pay for the debt relief. The United States does not favor that.

US and British officials sought to play down their differences and said they were encouraged by developments over the weekend.

''I believe we are making considerable progress now on these issues," said Gordon Brown, chancellor of the exchequer in Britain.

''I think, for the first time as a result of these meetings, that more money will have to be available," he said.

A more pessimistic view came from groups demanding the forgiveness of billions of dollars in debt for poor nations.

''Progress has stalled not because of disagreement over the principle of debt cancellation, but over the mechanics of how to finance such cancellation," said Debayani Kar, communications and advocacy coordinator for Jubilee USA Network.

But finance officials said they believed their work this weekend would make a deal possible at a summit of world leaders in Scotland in July.

Freeing poor countries from their debt burden would allow them to spend that money to fight diseases, improve education, and make other overhauls, advocates said.

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