Debt relief for Africa in the works
One plan has lenders writing off debts and donor nations giving compensation.
LONDON -- Maybe it has nothing to do with Bob Geldof or Bono.
But suddenly, debt relief for the impoverished countries of Africa is high on the political agenda in both Europe and the United States.
This weekend, finance ministers of the Group of 7 leading industrial nations -- the G-8 minus Russia -- are expected to announce an agreement in principle on a comprehensive plan to wipe the slate clean for 14 of Africa's poorest nations.
The deal was put together in Washington earlier this week during British Prime Minister Tony Blair's meeting with President Bush ahead of next month's G-8 summit in Scotland.
Blair has been campaigning hard to make the plight of Africa and progress on global warming the signature issues of the upcoming summit, for which he will be the host. But the Bush administration has been cool toward both initiatives.
Bush's initial offer of $674 million for immediate African famine relief this week was widely dismissed as insufficient.
At the same time, Geldof's plan for a series of "Live 8" concerts has kicked into high gear. The Irish rocker, whose Live Aid concerts 20 years ago raised $100 million for Ethiopian famine relief, is planning a series of free concerts in London, Paris, Rome, Berlin and Philadelphia and then to deliver a million protesters to Edinburgh, Scotland, for the G-8 summit.
The idea, Geldof explained, is to raise awareness, not money. And that seemed to concentrate the minds of political leaders.
The British-U.S. plan was to be presented to the G-7 finance ministers at a Friday dinner in London. It would allow 14 of the poorest nations in Africa and four in Latin America to cancel out their debts.
These countries now owe about $17 billion to international lending institutions such as the World Bank and the International Monetary Fund. Instead of spending $1 billion a year on interest payments, the African nations would be able to redirect the money toward development projects.
The idea of canceling the debts of poor nations has been gaining momentum for several years, but questions arose over the best approach. If lenders write off loans, it means they have less money to lend in the future.
That suited the Bush administration, but Britain and other European nations argued that wealthy countries should take over the debts themselves.