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Russia will cancel $2.2 bln debt to African states

June 29, 2005

By Evelyn Leopold

UNITED NATIONS (Reuters) – Russia promised the U.N. GeneralAssembly it would make good on its pledge to forgive $2.2billion in debt for African nations as part of an agreement bymajor industrial nations to cancel more than $40 billion indebts to the world’s poorest countries.

Moscow’s U.N. ambassador, Andrei Denisov told a session offinance, foreign and development ministers on Tuesday thatRussia “underlines our general support” to the Group of Eightindustrial nations, whose finance ministers decided in Londonto cancel the debt of 18 countries.

“Thus, this year Russia intends to announce thecancellation of $2.2 billion for the poorest African states ona bilateral basis,” he said. “In absolute terms, Russia isamong the leaders in the cancellation of debt to the poorestcountries.”

Denisov spoke during a two-day ministerial General Assemblysession, which ended on Tuesday, on financing for development.It touched on aid, trade and debt relief before a U.N. worldsummit in September. One aim of the summit is to reduce povertyand disease among the poorest countries.

Russia’s Finance Minister Alexei Kurdrin has said Moscowwould include $2.2 billion in debt forgiveness. He hasestimated Russia’s write-offs at $5 billion until 2015.

Under the G8 agreement earlier this month, the 18 mostlyAfrican nations would receive immediate relief on debt they oweto the World Bank, the International Monetary Fund and othermultilateral lenders. Nine other African nations are likely toqualify soon.

‘CLAPTRAP OF UNDERDEVELOPMENT’

While many positions had been voiced previously, theGeneral Assembly session gave developing countries a chance tocriticize the inequities before the forthcoming G8 session inGleneagles, Scotland and the U.N. summit.

Several nations including Turkey, Paraguay and Bangladeshsaid that without liberalized trade, other incentives couldcome to naught.

“Fifty least developed countries (LDCs) are seeminglycaught in a claptrap of underdevelopment, poverty andstructural weaknesses,” said Bangladeshi Ambassador IftekharChowdhury.

“We urge the international community to provide immediatebound duty free and quota free market access for all exports ofall LDCs. Their exports should not be subjected to unrealisticrules of origin conditions,” he said.

French Finance Minister Thierry Breton told the sessionthat airline passengers were “rarely among the poorest” peopleand could pay anywhere from $6 a passenger to $24 in a specialtax, which could generate about $12 billion a year.

He said that in addition to Germany, Brazil and Chilebacked the plan and were “calling for the rapid implementationof a pilot solidarity levy.”

The United States is against the tax but told the G8 itwould not block others from implementing it.

Luxembourg’s Development Minister Jean-Louis Schiltz, whosecountry is just ending the rotating European Union presidency,told a news conference on Tuesday that two ideas were promisingto meet U.N. Millennium development goals.

One was the tax on air tickets. The other was Britain’sproposal for an International Finance Facility that could raise$50 billion a year by selling bonds on capital markets.




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