Guyana clinches $256M debt ease
WASHINGTON, (Reuters) - Debt-strapped Guyana yesterday became only the third country to meet terms for a key international debt relief programme for reformist poor countries, winning immediate financial help from multilateral lenders. A World Bank spokesman said the Latin American country had reached the "completion point" for the Heavily Indebted Poor Countries initiative, which rewards reformist debtor countries with the most generous debt relief terms yet on offer. The bank said Guyana would receive some $256 million of debt relief, at the present value of its $1.09 billion debt. This includes $27 million of World Bank debt relief and $34.5 million of debt relief from the International Monetary Fund. "The HIPC debt relief agreed this week will release resources from debt servicing and enable us to increase budgetary allocations toward improving the health, education and living standards of all Guyanese," Finance Minister Bharrat Jagdeo said in a statement released by the World Bank. "On behalf of all Guyanese, I would like to thank the international community to have made this possible." Guyana is the third country to start receiving debt relief under the much-criticised HIPC programme, which was introduced with fanfare in 1996 and rewards countries that follow IMF-sponsored reform programmes. Aid organisations say the terms are too tough and the money is paid too late, while a report to the boards of the IMF and the World Bank last month admitted the initiative "in absolute terms may not be significantly reducing debt service from current levels paid." The international community is currently looking at ways to reform the HIPC programme, although no final decision is likely before the June summit in Cologne of the Group of Seven industrialised nations — Britain, Canada, France, Germany, Italy, Japan and the United States. G7 countries have already put forward overlapping, and at times competing, proposals on debt relief, and they promise to search for a deal ahead of the Cologne summit. Bolivia and Uganda are the only other countries which have already started receiving debt relief under the HIPC programme although four other countries — Burkina Faso, Ivory Coast, Mali and Mozambique — could reap the benefits of the programme in the coming months or years. Guyana had originally been due to receive the HIPC debt relief in December last year but the payments were delayed after economic reforms stalled slightly.
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