Britain seeks G-7 aid for poor nations

LONDON -- The British government offered a sweeping plan yesterday for the Group of Seven nations to dramatically increase aid to the developing world and to forgive 100 percent of Africa's $70 billion in debt.

But US officials at the G-7 meeting opposed key parts of the plan, setting the stage for what international development specialists said could be an arduous struggle for a US-European compromise.

At the close of the two-day summit, the chief of Britain's treasury, Gordon Brown, said that full debt relief would be ''agreed on a case-by-case basis" when nations receiving the aid could assure wise investment of the funds. Brown said discussions would continue on how best for the G-7 countries to increase overseas development aid. The debate is expected to be a key issue in a G-7 summit scheduled for this summer in Scotland.

Britain has made aid to the developing world a priority after taking over the rotating presidency of the Group of Eight -- which includes the G-7 (Britain, Canada, France, Germany, Italy, Japan, and the United States), plus Russia. The government of Prime Minister Tony Blair has sought to answer a plea for help from African leaders, particularly Nelson Mandela of South Africa.

In a speech Thursday in London's Trafalgar Square, Mandela equated the fight against poverty and AIDS to struggles against slavery and apartheid.

Brown, who as the chancellor of the Exchequer is the second-highest-ranking official in Britain, has said that the world's wealthiest nations must create ''a modern Marshall Plan for the developing world -- a new deal between the richest countries and the poorest countries."

Yesterday, he gave the specifics of that plan at a news conference. ''We are willing to provide as much as 100 percent debt relief on all multilateral debt" to dozens of the world's poorest countries, almost all of them in Africa, Brown said.

Sub-Saharan Africa owes about $70 billion to such international lending institutions as the World Bank and the International Monetary Fund. These institutions, Brown said, would now have to develop plans on how to deliver on the debt-relief pledge.

''It is the rich countries hearing the voices of the poor . . . showing that no injustice can last forever," said Brown, who chaired the G-7 talks and who pushed to completely write off African debt and to double aid to $100 billion a year through a proposed international finance facility.

Such an organization would leverage money from international capital markets by issuing bonds. According to Brown's projections, the body would provide as much as $50 billion in additional development assistance each year for the next decade.

The European countries at the meeting reportedly expressed support for the proposal, while Canada and Japan were said to have wavered. The United States has staunchly opposed the international finance facility plan.

Treasury Department undersecretary John Taylor, who attended the meeting in London, told the BBC that the international finance facility would not work within the US ''budgetary framework."

''This particular mechanism does not work for the United States. It works for other countries, and that is fine," Taylor said. But, he added, the Bush administration had shown its commitment to helping poor African countries, increasing aid to the continent fourfold in the past four years to $4.6 billion per year.

Jeffrey Sachs, director of the Earth Institute at Columbia University and a specialist on international development, said of the G-7 summit: ''This was a major meeting; a lot of diplomatic work went into it. The Mandela visit was timed to help that effort, and the bottom line is the US is cold-shouldering this process.

''The hope this week was that the US would put forth a constructive proposal. That they did not is disappointing for those who care about this issue," Sachs said.

''The US is willfully blocking the European initiative headed by the British government, and it's a shame, and it's sad that there is a complete disconnect between what the US government knows is needed in Africa, what it has promised to give Africa, and what it has actually done."

The United States gave $16.2 billion in assistance to all developing nations in 2003, according to the Organization for Economic Cooperation and Development. That was equivalent to 0.15 percent of the US national income, the lowest percentage donated by any wealthy country.

A battle over increasing aid to Africa may be brewing in Europe, analysts say, at a time Washington and much of Europe are expressing the hope of mending a relationship frayed by the Iraq war. Blair seems ready to part company with Washington on this issue if necessary.

Globe correspondent Sarah Liebowitz contributed to this report. Material from wire services also was used.