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Oxfam Welcomes Debt-Cancellation Deal

By Oxfam

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Oxfam welcomes an agreement by the finance ministers of the world's richest countries to cancel 100 percent of the debts of 18 countries, but urges them to broaden the deal to include other indebted poor countries in similar need of relief.

Meeting over the weekend in London, finance ministers from the world's richest countries agreed to cancel 100 per cent of the debts of 18 countries, 14 of which are in Africa.

The deal covers $50 billion of debts owed by poor countries to the World Bank, the International Monetary Fund, and the African Development Bank. The 18 initial countries qualify because they have already been through the Heavily Indebted Poor Countries (HIPC) debt relief scheme. They are Benin, Bolivia, Burkina Faso, Ethiopia, Ghana, Guyana, Honduras, Madagascar, Mali, Mauritania, Mozambique, Nicaragua, Niger, Rwanda, Senegal, Tanzania, Uganda, and Zambia.

All must take measures to fight corruption. Other countries are expected to qualify when they meet the economic and political requirements.

While welcoming the decision, Oxfam said the deal did not go far enough, since it covers only 10 to 20 percent of what's required and does not offer relief to all the countries that need it.

"It's great for the countries that are included," said Oxfam policy adviser Max Lawson. "But there are many other countries that are performing well, such as Vietnam and Sri Lanka, which are not included and will get nothing out of this deal.

"Today's agreement is important because it endorses the principle of 100 per cent debt cancellation and opens up the possibility of countries outside the current HIPC debt relief scheme also benefiting in the future," Lawson said. "The fight now on debt is to get 100 per cent cancellation for all the countries that need it."

But debt is only part of the overall picture. With three weeks to go before the G8 summit in Scotland, the pressure is now on for world leaders to announce a doubling of aid by $50 billion and serious progress on reforming unfair trade rules.

"There are still many hurdles for G8 leaders to clear," said Lawson. "This first hurdle - debt cancellation - is only worth $2 billion a year at most for poor countries. G8 leaders now need to urgently pick up the pace, respond to the calls of millions of campaigners around the world, and put up an extra $50 billion of aid to fund the fight against poverty."

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