- In preparing the upcoming G8 summit in Moscow, Russian Finance Minister Aleksey Kudrin has announced that his country is to write off 100 percent of the debt owed to Russia by 16 least developed nations, most of them being African. Russia also plans a large repayment of its own debt to the Paris Club of creditor nations, recommending these funds be used write off even more African debt.
Finance Minister Kudrin in an interview with the Russian agency 'RIA Novosti' yesterday said his government planned the announcement of a debt relief worth around US$ 700 million. This was to to be announced during the G8 summit starting in Moscow on Friday, where the Russian government will meet with finance ministers from the other seven leading industrialised countries of the world.
The initiative "mainly involves African states," Minister Kudrin told 'RIA Novosti'. Some 16 very poor countries would see their debt to Russia totally written off if his scheme is approved by the Moscow government. These countries included Benin, Tanzania and Zambia. Further examples were not given.
"The main condition for writing off the debt would be these countries' agreement to fulfill certain requirements for transparency of their finances, for budget expenditures, for activities connected with fight against poverty,” Mr Kudrin was quoted by 'RIA Novosti' as saying. "The money that these poorest states would have paid us will be spent on fighting poverty, on improving public health and education systems in these countries," he added.
The Russian Finance Minister further indicated that the country was speeding up its own debt downpayment to the so-called "Paris Club", an informal association of the world's major creditor nations. This was made possible by the very rapid and solid growth of Russia's economy, enabling the country to repay almost the entire Soviet era debt.
Russia plans to repay an estimated US$ 12 billion ahead of schedule, Minister Kudrin announced. He urged Paris Club member countries to use these funds from Russia's early repayments to bolster the World Bank and the International Monetary Fund (IMF), enabling these institutions to speed up debt cancellation for least developed countries. This could assist the British G8 proposal of enhancing debt cancellation for poor countries, he held.
Friday's meeting of G8 Finance Ministers marks the first time this event is arranged in Russia. Moscow yet has to become a full-fledged member of this club of the world's main industrial economies and still needs to reform and open up its economy further to stand as an equal. Minister Kudrin's initiative to speed up Russia's downpayment of old debts and increasing debt cancellation for poor countries is seen as one step to demonstrate that Russia is taking on greater responsibilities for the world economy.
This is however not the first time Russia writes off the debt of poor countries - most of which was accumulated during the cold war. According to Russian Deputy Minister of Foreign Affairs Alexander Yakovenko, Russia is "among the leaders as regards absolute figures for the volume of debt write-off for the poor countries of the world."
Russia also belong to the Paris Club of creditor nations and has contributed to many of this institution's African debt cancellations. The countries that mostly have enjoyed Russian debt cancellations are however former Soviet republics ans Asian countries. Afghanistan alone has been promised a Russian debt cancellation of around US$ 10 billion.
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