Britain to Write Off Third World Debt

The bold gesture was announced by Chancellor of the Exchequer Gordon Brown in a speech to some 400 debt-relief and fair-trade activists in Brighton, southern England, where the Labour Party is holding its annual conference.

"Although there is no international agreement on 100 percent multilateral debt relief, Britain will do more," Brown said. "We will pay our share of the multilateral debt repayments of reforming low-income countries," he said.

"We will make payments in their stead to the World Bank and African Development Bank for the portion that relates to Britain's share of this debt," the chancellor added. "We do this alone today but I urge other countries to follow so that indebted countries are relieved of the burden of servicing all unpayable multilateral debt."

Britain holds nearly 10 percent of the total debt owed to the World Bank and other development banks, which itself amounts to 70 percent of the money owed by the world's poorest nations.

Germany under pressure

Experts said Brown's announcement -- ahead of a World Bank and International Monetary Fund (IMF) meeting later this week -- puts pressure on other Group of Seven industrialized nations to do likewise.

Chief among them are Germany, Japan and the United States, the World Bank's biggest stakeholders, while Canada and France are said to have similar announcements in the planning stages.

Germany's Ministry for Economic Cooperation and Development welcomed Brown's announcement. "Through debt relief, the budgets of the poorest, most indebted countries are unburdened, and the freed-up resources can then be invested in social and educational programs. This new push from the British chancellor will set further, positive impulses for international development policy, which we basically support," the ministry said in a statement.

While the ministry did not say whether Germany intends to take up the challenge set by Brown, it stressed that Development Minister Heidemarie Wieczorek-Zeul (photo) advocated debt relief for the world's poorest countries at the 1999 G8 summit in Cologne, and in following negotiations with the World Bank.

Common agricultural policy under fire

Brown's announcement dovetails with Prime Minister Tony Blair's intention of making the fight against poverty in Africa a core theme of Britain's turn at the helm of the Group of Eight and the European Union during 2005.

In his speech, which was greeted with a standing ovation at the end, Brown lashed out at rich nations for failing to do more to end farm subsidies and clear away trade barriers which keep poor countries poor.

In particular he condemned what he called the "scandal and waste" of the EU's Common Agricultural Policy, and regretted that "what the world lacks is the common and shared will to act" to alleviate global poverty.

Speaking from the pulpit of an Anglican church, with a towering crucifix on the wall behind him, Brown nevertheless called for a "new covenant" between developed and developing countries.

"Have confidence," he told his audience, "that together, we can make poverty history."