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NEWS - G7 Debt Relief May Elude Asi
- Subject: NEWS - G7 Debt Relief May Elude Asi
- From: Rangoonp@xxxxxxx
- Date: Mon, 21 Jun 1999 13:36:00
Subject: NEWS - G7 Debt Relief May Elude Asia's Poorest
Interview-G7 Debt Relief May Elude Asia's Poorest
Reuters
21-JUN-99
MANILA, June 21 (Reuters) - Laos, Myanmar and Vietnam,
three of Asia's poorest countries, may not qualify for
debt
relief under an agreement forged by rich nations, an
Asian
Development Bank official said on Monday.
"I think these countries are relatively in better shape
than
African countries," Yoshihiro Iwasaki, chief of the ADB's
strategy and policy office, told Reuters by telephone.
"So we are not expecting these countries to get debt
relief
from the major bilateral donors...We are not faced with
the
situation to consider it seriously."
Leaders of the Group of Seven nations at the weekend
agreed to relaunch the Highly Indebted Poor Countries
(HIPC) initiative as a vehicle for faster and deeper debt
relief. Some 36 countries stand to receive debt
write-offs
totalling $70 billion.
"This involves enormous amount of money. There is
prioritisation which is needed because donors cannot
relieve
debt for all. They have to be selective," Iwasaki said.
Whether these Asian countries qualified for debt relief
would
depend on the proportion of their debt to gross domestic
product and to exports, Iwasaki said.
"Of course, if the situation is recognised as severe as
other
countries which have qualified for debt relief, we will
have to
consider it (debt relief)," Iwasaki said.
But if Laos, Vietnam or Myanmar decide to seek debt
relief, it
could prove disadvantageous because Japan, the region's
biggest donor, will not then consider extending loans to
them, Iwasaki said.
"If you get the debt relief, you will not be eligible for
loans
from Japan in the future. The reason is they are in
trouble
repaying...therefore you should not lend loans. Instead,
you
should provide grants. But grants are smaller in amount
than
loans."
The debt plan provides for the United States, Japan,
Germany, France, Britain, Italy and Canada to forgive $50
billion in government guaranteed loans extended at
commercial rates and another $20 billion in official
development assistance lent on soft terms.
Gene Sperling, chairman of U.S. President Bill Clinton's
National Economic Council, has said the package could
relieve $90 billion of the countries' total debt of $130
billion if
other lenders joined the G8 initiative.