Brown 'victory' over £30bn world debts

GORDON BROWN unveiled a £30bn debt write-off for the world's poorest countries yesterday. The Chancellor beat off last-minute objections from France and Germany to claim that the impoverished nations' heavy borrowing had been consigned to history.

Brown, acting as chairman of the Group of Eight world powers, said: 'This is not a time for settling for second best but for aiming high.'

Earlier in the day at the G8 finance ministers' summit in London, both the French and the Germans raised objections that could have scuppered the deal.

France is understood to have feared the write-off would drain resources from the International Monetary Fund, while Germany objected to general debt forgiveness on the grounds that it could reward bad countries as well as blameless ones. But intensive behind-the-scenes negotiations clinched the deal.

The money was owed to the IMF, the World Bank and the African Development Bank. Some of the write-off will be funded by IMF gold sales some years ago, while G8 countries have pledged to make up any shortfall. Eighteen nations benefiting immediately are Benin, Bolivia, Burkina Faso, Ethiopia, Ghana, Guyana, Honduras, Madagascar, Mali, Mauritania, Mozambique, Nicaragua, Niger, Rwanda, Senegal, Tanzania, Uganda and Zambia.

Another nine countries are expected to have their debts cancelled within the next 18 months. Ultimately, it is understood, more than 40 countries could be involved.

World debt campaigner Sir Bob Geldof said last night: 'Tomorrow 280m Africans will wake up for the first time in their lives without owing you or me a penny from the burden of debt that has crippled them and their countries for so long.'

But some experts claim the deal will have little impact. One econimist said: 'The actual reduction in debt payments by African countries is little more than £1bn a year, worth roughly £1 per year for each African.'

The Chancellor's moment of triumph was clouded by failure on two other fronts. The International Finance Facility, his pet scheme to lend poor countries immediately the money rich countries have promised in aid in future, remains effectively blocked by American objection. And his long-running campaign to persuade the 11-nation Organisation of Petroleum Exporting Countries to pump more oil and help reduce petrol prices has yet to bear fruit.

OPEC meets this week to discuss production levels but there is no imminant sign its membercountries will do what Mr Brown would like.

The Chancellor said yesterday that a voluntary trust fund was being set up to which oil producers and other countries would be invited to contribute. The fund would be used to help poor countries affected by volatile oil prices.