MercoPress. South Atlantic News Agency

“Historic” debt relief for Latam's five poorest countries

U.S. Treasury Assistant Secretary Clay Lowery

United States Treasury Assistant Secretary for International Affairs Clay Lowery commended Friday the Inter-American Development Bank's “historic” approval of a debt relief package that will provide 3.4 billion US dollars in debt reduction for five of the region's poorest countries: Bolivia, Guyana, Haiti, Honduras, and Nicaragua.

The Bank's initiative to cancel 100 percent of loans outstanding as of December 31, 2004 will free up money for needed health care, education and infrastructure development in the region. "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 â€" a critical step to reducing poverty and stimulating economic growth to help countries create the opportunities for upward mobility" said Assistant Secretary Lowery. The initiative was approved in a vote that was finalized this week demonstrating overwhelming support within the region, and throughout the Bank's membership, for the agreement. The agreement also extends the benefits of concessional loans to five low-income countries (Ecuador, El Salvador, Guatemala, Paraguay, and Suriname) that will gain access to an additional 1.7 billion of subsidized financing when a current lending program is extended to at least 2015. In addition to receiving 423 million US dollars of debt relief, the IDB approved Heavily Indebted Poor Countries (HIPC) status for Haiti. In recognition of its special needs, Haiti will also receive 50 million in grants per year from 2007 through 2009. After 2009, Haiti may be eligible to receive a mix of grants and concessional loans, of which the grant component may be up to 40 million through 2015.