G8 Cancels Debt

LONDON, England -- Finance ministers from the world's wealthiest nations have agreed to an historic accord to cancel $40 billion worth of debt owed by the world's poorest nations.

The Group of Eight (G8) ministers -- meeting for a second day Saturday in London -- backed a deal that includes an immediate scrapping of 100 percent of the debt belonging to 18 countries to the World Bank, the International Monetary Fund and the African Development Bank.

As many as 20 other countries could be eligible if they meet strict targets for good governance and tackling corruption, leading to a total debt relief package of more than $55 billion.

British Finance Minister Gordon Brown called the accord a "new deal" for relations between the rich and the poor countries.

"What we have decided today, conscious of the poverty that we face, is a decision of 100 percent debt cancellation for the poorest countries backed up by greater trade justice, by a doubling of European aid, by a commitment to provide AIDS treatments for people by 2010," said Brown.

Finance ministers from the United States, Britain, Japan, Canada, Russia, Germany, Italy and France agreed to the package ahead of a G8 summit July 6-8 in Gleneagles, Scotland.

Hopes of an accord on debt relief were raised Friday with reports of an agreement between the United States and Britain on writing off debt owed by the 18 countries.

The countries are Benin, Bolivia, Burkina Faso, Ethiopia, Ghana, Guyana, Honduras, Madagascar, Mali, Mauritania, Mozambique, Nicaragua, Niger, Rwanda, Senegal, Tanzania, Uganda and Zambia.

Sub-Saharan Africa owe about $68 billion to international lending agencies.

Saturday's accord is aimed at helping countries free up funds used for debt repayment in redirect the money to health care, education and other needs. One of the major issues that these countries face is the AIDS crisis.

"A real milestone has been reached," U.S. Treasury Secretary John Snow told reporters. "Lifting the debt burden from the poorest countries in the world brightens their prospects enormously."

Snow added: "This is an achievement of historic proportions."

Forty BILLION in debt has been lifted to help provide funds for fighting poverty and health care crises in the poorest nations.

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