IDB Governors endorse US$467M debt relief for Guyana
Kaieteur News
March 17, 2007
The Board of Governors of the Inter-American Development Bank (IDB) has endorsed a decision to grant Guyana debt relief to the tune of US$467 million, which was owed on loan balances outstanding as of December 31, 2004 from the IDB's Fund for Special Operations (FSO).
The decision was taken at the 48th annual meeting of the Board of Governors in Guatemala City , Guatemala , which opened on Thursday and ends on Tuesday.
The meeting is being held to review the Bank's lending programme and other activities, including future policies.
IDB President Luis Alberto Moreno announced that the approval is part of a wider initiative to grant 100 percent debt relief to Bolivia , Guyana , Haiti , Honduras and Nicaragua .
Honduras shed US$1.4 billion (?1 billion) in debt, Bolivia US$1 billion (?750 million), Nicaragua US$984 million (?738 million) and Guyana US$467 million (?350 million.) Haiti, which is part of the International Monetary Fund's Heavily Indebted Poor Countries Initiative, will be able to get rid of US$20 million (?15 million) of its debt by 2009, and after that it can shed the entire US$525 million (?394 million.)
Additionally, under the agreement approved by the Board of Governors, Haiti may receive up to US$50 million in IDB grants a year through 2009, and a mix of concessional loans and grants thereafter.
The benefits will be effective retroactively to January 1, 2007 because these nations have already reached the “completion point” under the enhanced Initiative for Heavily Indebted Poor Countries (HIPC), an earlier debt relief programme.
Under an agreement endorsed by governors of its 47 member-countries, the IDB will forgive approximately US$3.4 billion in principal payments and US$1.0 billion of future interest payments.
“This decision represents a historic opportunity for a fresh start for Bolivia , Guyana , Haiti , Honduras and Nicaragua . The agreement, backed by our membership, will help these countries free up resources to invest in quality education, health and other social services their citizens need to overcome poverty,” Moreno said in a statement issued by the Bank.
By canceling these debts, the IDB underscores its commitment to assisting the poorest countries in Latin America and the Caribbean in their efforts to reach the United Nations Millennium Development Goals (MDG), which focuses on halving poverty by 2015, the Bank stated.
The IDB's decision also complements the Multilateral Debt Reduction Initiative launched last year by the G-8 nations.
The agreement also ensures the FSO's financial viability through 2015.
IDB member countries confirmed their commitment to the fund's sustainability, agreeing to assess, no later than 2013 the need for an eventual replenishment.
Furthermore, the agreement guarantees Ecuador , El Salvador , Guatemala , Paraguay and Suriname access to a US$250 million-a-year concessional lending programme.
During the annual meeting, the IDB Governors are also expected to review the Bank's Annual Report and examine ways to increase Bank support for the private sector, achieve greater development effectiveness and promote economic and social integration among the countries of the region.
Treasury Assistant Secretary for International Affairs Clay Lowery commended the final approval of the debt relief package.
“This landmark agreement follows President Bush's call to address the debt sustainability of the poorest countries in the region, including through grants and debt relief. The Treasury Department worked closely with the IDB for more than a year to develop this proposal to provide debt relief for the poorest countries in the Western Hemisphere .“