World Bank Announces debt Relief package to 17 countries

from The St Petersburg Times

World Bank member nations on Tuesday approved a long-awaited $37 billion debt relief package for 17 impoverished countries that included ways to compensate the development lender for the write-off.

The approval brings to an end months of tough negotiations among the World Bank’s biggest donors over how to fund future loans by the bank’s low-interest lending arm, the International Development Association.

The 40-year term of debt cancellation will begin on July 1. It will cover debt service payments of the 17 countries to the World Bank on debt accumulated to the end of December 2003, allowing governments to increase spending on programs that reduce poverty.

“This is a historic agreement combining increased financing with debt relief, which will help poor countries meet the Millennium Development Goals,” World Bank President Paul Wolfowitz said.