Today will see the International Monetary Fund's interim committee and the World Bank's development committee meet in joint session for the first time and for one purpose only: to deliver the world's poorest countries from the burden of unsustainable debt.
By taking decisive action to deliver faster, wider and deeper debt relief and to link debt relief to poverty reduction, we can not only secure debt relief and do so by the end of the millennium year but also ensure that resources are reallocated to helping the sick, teaching the young and relieving the suffering of the poor.
So today our duty is to the neediest in the world--the 30,000 young children who die every day of preventable diseases; the 200 million men and women in avoidable poverty whose lives today are ruined by hunger and the constant struggle to survive. Debt reduction is an economic issue because a mountain of inherited and hitherto immovable debt is a burden imposed from the past on the present, a burden that is depriving millions of their chance of a future.
But it is also a moral issue. Some of the poorest countries in the world are being forced to spend more in their debt interest payments than they are able to invest in the young, the sick, the undernourished and the poor. As we approach the millennium, it is time to help break out of the vicious cycle of debt, poverty and underdevelopment.
The current debt initiative agreed to in the mid 1990s has been delivering too little relief too late and to too few countries. In 1997 not one country had completed the process. Today, despite renewed efforts, only four of nearly 40 poor countries (Uganda, Bolivia, Guyana and Mozambique) have debt relief programs, and only five have completed the first stage and been assessed for debt relief (Cote d'Ivoire, Benin, Mali, Senegal and Burkina Faso). Even those with debt reduction programs have seen their position worsen again--Uganda's debt-export ratio is now higher than when it completed the debt relief process.
With the improved framework now being agreed upon by the IMF and World Bank, we can make rapid progress out of the worst of debt. Our new and challenging target is to get three-quarters of eligible countries through the process and the remainder on the path to debt relief by the end of 2000. The scale of the package is such that if it is implemented, two-thirds of the poorest countries' official debts can be canceled. The total amount of debt relief is worth $100 billion. An extra $50 billion of debt reduction is available under the new Highly Indebted Poor Countries initiative on top of $30 billion already agreed on. Cancellation of overseas development loans means a further $20 billion.
Today we must agree on the financing of the reforms. In particular, we must back the efforts of the IMF's Michel Camdessus and the World Bank's James Wolfenson and ensure that multilateral institutions are able to finance their debt relief. That is why we will approve the $2 billion plan to release the value of IMF gold reserves and seek contributions for an even bigger Millennium Trust Fund at the World Bank to help the regional development banks. The United Kingdom already has pledged $171 million to the trust fund. And Clare Short, the UK's international development secretary, and I are urging our European colleagues to contribute up to 1 billion euros from the European Development Fund.
With these steps the World Bank and IMF can reshape the world's approach to debt relief and poverty reduction. Debt relief, however rapid, is only the first step. Our true measure of success is not how much debt is canceled but how many people are lifted out of poverty and how much we pave the way for long-term economic development. We want to see plans drawn up by the poorest countries detailing how they propose to use the proceeds of debt relief to alleviate poverty. And we must ensure that the macroeconomic policies pursued by those countries are consistent with meeting minimum international standards--for levels of health care, education and social protection--to ensure that the poor and most vulnerable do not bear the burdens in times of crisis. The World Bank and the IMF already have begun to work closely on this new approach, which links debt relief and poverty relief.
If we are successful in Washington today it will be a matter not of years or months but weeks before the first country will benefit from debt relief. And so, as we leave behind the 20th century we can leave behind much of the burden of unpayable debt and the worst of avoidable poverty with it.
The writer is the British governement's chancellor of the exchequer and the new chairman of the IMF interim committee.