Annan Says Wealthy Nations Should Fulfill Debt Promises

UNITED NATIONS -- Secretary-General Kofi Annan said Tuesday it was time rich nations fulfilled promises of debt relief to poor countries as well as give them the means to become part of the new information age.

In a letter to the Group of Seven industrial nations plus Russia, Annan noted that only five countries had qualified for debt relief, and of those only 35 percent had had their debt canceled.

"Meanwhile, in Africa, the world's poorest region, 40 percent of government revenues are now being allocated to servicing a total debt of some $350 billion f to the detriment of health, education and other essential social services," Annan wrote.

The G-7 is made up of Britain, Canada, France, Germany, Italy, Japan and the United States.

The United States, especially the U.S. Congress, has been blamed for hesitancy in releasing the funds. Other rich nations fear the money would be used to buy weapons.

In response to these concerns, Annan said donor countries and international financial institutions should cancel official debts of the Heavily Indebted Poor Countries in return for those nations "making demonstrable commitments to poverty reduction."

He also proposed that:

-requirements for the HIPC plan should be relaxed so that countries like Nigeria could apply for relief;

-debts owed by countries that have suffered major conflicts or natural disasters should be canceled;

-debt repayments should be pegged at a maximum percentage of foreign exchange earnings;

-a debt arbitration process should be set up to balance the interest of creditors and debtors, thus introducing more discipline into their relations and resolving some of the disputes impeding progress.