| 1. | The G8 at Cologne stated explicitly for the first time, with strong support from the UK Government, that the central purpose of debt relief was to free up resources for investment in programmes to tackle poverty. We welcome this statement and the role of the UK in securing a renewed high-level commitment of the world's leading industrialised nations to poverty eradication in the poorest countries in the world (paragraph 5).
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| 2. | We join the UK Government in welcoming the recent steps taken towards an improved poverty-focus and greater emphasis on developing country ownership of IMF-supported economic reform programmes (paragraph 8).
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| 3. | The replacement of the ESAF with the PRGF as the vehicle for conditionality attached to debt relief must not lead to unnecessary delays in the provision of debt relief to Heavily Indebted Poor Countries. The PRGF must be supported by programmes to assist in the building of negotiation and policy expertise within developing country governments in order that they can play a full and effective role in the process (paragraph 10).
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| 4. | We are concerned that there appears to be conflict between the incentive for speedy attainment of reform targets, upon which the timing of debt relief will depend under the 'floating completion point' system, and the requirement for full consultation with civil society representatives in the design of reform programmes under the Poverty Reduction and Growth Facility. It does not take a great leap of imagination to see which of these will be likely to be sacrificed in practice, with HIPCs rushing the consultation process in order to receive debt relief quickly. We invite DFID to comment upon the ways in which HIPCs will be encouraged, under the new Poverty Reduction and Growth Facility, to carry out genuine broad-based consultations with civil society in the preparation of the Poverty Reduction Strategy Papers (paragraph 13).
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| 5. | In its response to this Report, we recommend that DFID comment upon the relationship which is envisaged between the United Nations Development Assistance Framework, the World Bank Comprehensive Development Framework, the new Poverty Reduction Strategy Paper, and DFID's own Country Strategy Papers (paragraph 14).
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| 6. | The Government stated in its response to our Report on Debt Relief and the Cologne G8 Summit that "the reduction in the export ratio from a range of 200-250 per cent to 150 per cent greatly improves the prospect of countries achieving a sustainable exit from their debt problems". We agree, and we congratulate the Government on its role in securing it. We also share the disappointment of the Government that the reduction in the fiscal ratio did not go far enough (paragraph 19).
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| 7. | We believe that the loss of flexibility resulting from the decision to set a single sustainability target for all HIPCs, rather than a range of targets, will be outweighed by its benefits of the increased amount of debt relief to be provided, and the improvements in the simplicity, clarity and speed of the process (paragraph 21).
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| 8. | The provision of a deadline for entry into the HIPC Initiative is crucial to its status as a final and contained solution. To extend it repetitively would undermine that status. We do not recommend that the UK approve any further extension to the Sunset Clause of the HIPC Initiative. Instead, we call again on those involved to work to ensure the entry of all eligible countries into the Initiative by the end of 2000 (paragraph 23).
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| 9. | In order for the Mauritius Mandate target for three quarters of eligible countries to have reached their Decision Points by the end of 2000 to be met, a further 18 countries must reach their Decision Points before the end of 2000. We call again on the UK Government to press for the full and rapid implementation of the HIPC Initiative (paragraph 24).
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| 10. | We welcome the agreement at the annual meeting of the IMF and World Bank to an off-market transaction between the IMF and its member states to revalue fourteen million ounces of gold. However we invite the Government to comment upon the impact on the enhanced HIPC Initiative of the decision by US Congress to allow the sale of only nine million ounces of gold. We also note, and invite DFID to comment upon, the concerns raised by the Bretton Woods Project about the proposal that the proceeds from the sale of IMF gold be shared between the contribution of the IMF to the HIPC Initiative and the funding of the Enhanced Structural Adjustment Facility (paragraph 30).
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| 11. | We welcome the role of the UK in calling for voluntary contributions to be made to the HIPC Trust Fund, and the £221 million which the UK Government has itself pledged to the Fund. We reiterate our previous recommendation, however, that debt relief under the HIPC Initiative should be additional to existing aid resources (paragraph 32).
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| 12. | We welcome the allocation of _954 million of unspent European Development Fund resources to the contribution of the European Community to the HIPC Initiative (paragraph 34).
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| 13. | We welcome the pledges made at the G8 Cologne Summit of increased relief of bilateral debts. We call on the Government to press for the maximum amount of relief of bilateral debts for HIPCs within the Paris Club forum (paragraph 35).
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| 14. | We welcome the commitment by the UK Government to go beyond what is required by the terms of the HIPC Initiative and to write off all aid debt, and up to 100 per cent of export credit guarantee debt, owed to it by individual HIPCs (paragraph 37).
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| 15. | We welcome the permanent ban on the provision of export credits guarantees to the poorest countries for unproductive expenditure; the definition of unproductive expenditure which has now been provided by the Government; and the veto of the Department for International Development over projects to be supported by ECGD in the 63 poor countries covered by the ban. We note, however, that there have been few such projects in those countries during recent years. We request that DFID inform us of any projects which, having been proposed for support, are then not supported as a result of it exercising its right of veto (paragraph 40).
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| 16. | Over the past two years, significant progress has been made towards the elimination of unsustainable debt. The UK Government must work to secure the full implementation of the enhanced HIPC Initiative, in particular the spirit of consultation and poverty-focus which is promised by the new Poverty Reduction and Growth Facility, and the provision of funds to provide the necessary relief under the revised terms of the Initiative. We congratulate the Government on its work so far, and look forward to further progress being made at the G7 Summit later this year (paragraph 41).
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