Britain, US push relief of $15b debt

LONDON -- Backed by the United States, Britain pressed the world's economic powerhouses yesterday to cancel $15 billion owed by 18 poor nations and free up money to spend on healthcare, education, and infrastructure in those struggling lands.

There was support for the plan at talks among finance ministers from the Group of Eight nations, but some reported differences about how to finance the loan write-offs and said an agreement was unlikely before next month's meeting of G-8 leaders in Scotland.

Britain and the United States want their G-8 partners to support eventually canceling 100 percent of all debts that poor countries owe multilateral institutions, such as the World Bank, the International Monetary Fund, and the African Development Bank.

The proposal, negotiated earlier this week in Washington by Prime Minister Tony Blair and President Bush, followed a significant concession from the White House that money used to reimburse the lending institutions would not come out of future aid, British officials said.

The agreement would initially cover 18 nations eligible for debt relief under an IMF-World Bank program to encourage economic and government reforms. Aid specialists estimate that would leave those countries with an extra $1 billion to spend at home each year.

Nine more countries are said to be close to meeting targets set out under the initiative and would then qualify for debt relief. Eleven nations have been too hampered by corruption, poor governance, wars, or other challenges to complete the economic-reform stage of the initiative, started by the World Bank and IMF in 1996.

Treasury Chief Gordon Brown of Britain said yesterday that he was optimistic the G-8 nations -- the United States, Britain, Japan, Germany, France, Italy, Canada, and Russia -- would approve canceling debts.

Support appeared strong from some countries at the talks, which were to continue today. Finance Minister Ralph E. Goodale of Canada said his country was prepared to assume its ''full fair share of the cost responsibility for this."

Disagreements remain over how to pay for the debt relief. Britain has proposed that the IMF revalue or sell some of its gold reserves to raise cash for the plan. Washington, worried about the impact on the gold bullion market, opposes that.

Across Africa yesterday, some leaders were playing down the possible breakthrough in debt relief. ''We've heard this so many times. I would be surprised if something positive comes out of" this weekend's meeting, said Demba Moussa Dembele, director of the Forum for African Alternatives, a Senegalese civil society group.

Senegal is one of the 18 nations, all but four in Africa, that Britain and the United States are proposing to help by canceling debts.

''Africa has already paid enough. We do not owe anything," Dembele said, echoing the argument that many African countries have long since repaid the principal on loans but remain saddled with interest.

The 18 nations in line for cancellation are: Benin, Burkina Faso, Ethiopia, Ghana, Madagascar, Mali, Mauritania, Mozambique, Niger, Rwanda, Senegal, Tanzania, Uganda, and Zambia in Africa; and Bolivia, Guyana, Honduras, and Nicaragua in Latin America.

Finance Minister Kwadwo Baah-Wiredu of Ghana, said African leaders must live up to their part of the deal's implicit bargain: ensuring their people benefit from debt cancellation.

''We need to reinvest well enough whatever we get from it," Baah-Wiredu said. ''We must learn a lesson and put the livelihood of our people at the center of whatever loans or grants we take."

His West African nation is often cited as a model of democracy after four successful elections.