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Bush Opposes UK Africa Debt Plan

This Day (Lagos)
NEWS
June 5, 2005
Posted to the web June 6, 2005
Lagos

The UK's plan to write off debts owed by African nations is facing
opposition in the US - and particularly from President George W Bush.

Bush said a key part of the plan did not fit with the US budget process.

Bush's stance sets up a possible clash with UK Prime Minister Tony Blair,
due in Washington soon.

The UK is pushing hard for major debt relief and a doubling of aid to
Africa, and Chancellor Gordon Brown laid out a set of ambitious plans on
Thursday.

This was a time for 100 per cent debt relief not "timidity", Mr Brown said.

The UK has said that 2005 is a vital year for Africa, and argues that
without significantly more money the United Nations' Millennium Goal of
halving world poverty by 2015 will be impossible to meet.

Speaking in Edinburgh, Brown said he would present the proposals to the
leaders of the G8 industrialised nations at a summit next month.

As well as 100 per cent debt relief, Brown wants to set up an International
Finance Facility (IFF) to help pay for immunisation programmes in Africa

Brown's four-point plan for Africa include 100 per cent debt relief to pay
for education and health; Launch International Finance Facility for
Immunisation; Large increase in direct development aid, doubling of aid from
European countries; and, Removal of export subsidies and all
trade-distorting support to agriculture, which work against producers in the
developing world

He also said that aid should be doubled to $80bn a year by 2010.

But the US remains concerned that the UK is proposing that the debt plans
should be financed in part by selling gold reserves held by the
International Monetary Fund (IMF).

A surge in the price of gold has boosted the value of the reserve, and the
UK wants to use that extra cash.

The US - along with some other countries including Japan, Germany and Italy
- has never been keen on the idea of selling IMF gold.

Washington DC has also raised questions over the IFF, which would allow
developing countries to borrow against future aid pledges.

Bush said on Wednesday that the IFF for Africa "doesn't fit our budgetary
process".

According to Reuters, UK government sources have been talking about pressing
ahead even without US involvement.

This is not a time for timidity nor a time to fear reaching too high.

Brown played down reports of a rift or stand-off between the UK and the US.

"In my talks over the last few months, but particularly over the last day or
two, with the US Treasury Secretary, we believe that there is common ground
on securing that debt relief," he explained.

"We believe it is going to be possible to reach an agreement on debt
relief."

"This is not a time for timidity nor a time to fear reaching too high."

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