Britain is to give up its rights to interest on the debts of 21 very poor countries, in a scheme aimed at ensuring the benefits really go to the needy, Chancellor of the Exchequer Gordon Brown said on Saturday.
The project, described in press reports as a "cashback" scheme, would relieve interest payments on some one billion pounds (1.4 billion dollars, 1.64 billion euros) of debt owed by countries embroiled in various types of civil conflict.
It came as a four-year campaign for debt forgiveness for the world's poorest nations was due to culminate in a rally in central London.
The aim of the new government scheme was "to build a virtuous circle of debt relief, poverty reduction and sustainable economic development," Brown said.
"We are going to do more over the next year to reach our targets that every child should be in primary education and to reduce infant mortality and meet the international target to cut poverty by half by 2015."
The announcement took to 41 the number of very poor countries granted debt interest relief by Britain in the past year.
The total debt involved is 1.6 billion pounds.
In a statement on the BBC's Radio Four, Brown said the money given up in the latest scheme would be put into a special trust fund until the countries concerned have put in place poverty reduction plans.
"It is one of the tragedies of this jubilee year that so many countries in Africa are involved in wars, and of course, you have no guarantee that debt relief will not go to the weapons of war rather than poverty reduction," he said.
"What we are proposing to do today is renounce our right to any benefit from these debt interest payments, to put this money aside."
"When these countries get their poverty reduction programs in place, we will backdate the payments to them so they can move forward to poverty reduction."
The aim was that "money that used to be used for debt interest payments can go towards reducing poverty and infant mortality and getting kids into schools and improving the economies of these countries."
Jubilee 2000 members were due to light a flame in London's Trafalgar Square to symbolize the need to continue the fight against debt even after a year-end deadline they had set for debt forgiveness.
The rally will mark the transition of Jubilee 2000 into a "Drop the Debt" campaign, which will target the Group of Seven summit of industrialized nations in Genoa, Italy, next July.
The campaign will lobby for the wholesale scrapping of debt.
Brown and Clare Short, the minister responsible for international aid, are reported to have begun lobbying other Group of Seven industrialized countries in the hope they will follow Britain's lead -- LONDON (AFP)
© 2000 Al Bawaba (www.albawaba.com)
