GSUM01a
Supplementary memorandum submitted
by the Department for International Development
The proportion and amount of the new aid resources
that will go towards debt relief.
The G8 commitment at Gleneagles, together with the
commitments of the EU will mean annual increases in aid, to result
in almost $50 billion extra in 2010 compared to 2004 levels. This
is an increase in global aid from $79 billion in 2004 to $129
billion by 2010. Half of this increase ($25 billion) will go to
Africa, doubling aid to the continent.
By 2007-08, total UK Official Development Assistance
will rise to nearly £6.5 billion a year, representing 0.47%
of GNI, a real terms increase of 140% since 1997. A large proportion
of this is the annual increases in DFID's budget from £4.5
billion in 2005/6 to £5.3 billion in 2007/8 announced in
the last spending review. This is the first step towards achieving
our target of 0.7% ODA/GNI by 2013.
A proportion of the increased aid resources will
be spent on debt relief, in particular as part of our existing
commitments under the Heavily Indebted Poor Countries (HIPC) Initiative
and our share of the costs of the new G8 proposal (under which
donors will fund 100 per cent debt stock cancellation in the concessional
financing arms of the World Bank (IDA) and African Development
Bank (AfDF) of countries that have completed the HIPC Initiative).
The costs of similar debt stock cancellation at the IMF will be
met from internal resources, although the G8 might be called upon
to cover some of these costs to ensure that the IMF's immediate
financing capacity is not reduced (for example, where other existing
and projected debt relief obligations cannot be met from existing
IMF resources).
A central element of the G8's proposal is maintaining
the financing capacity of the IFIs by providing additional donor
resources to match dollar-for-dollar the payments foregone on
cancelled IDA and AfDF loans. The G8 have committed to a fair
burden share to cover these costs, and we will be asking other
donor nations to commit their share. Based on fair burden sharing
the G8 will contribute 70% of the debt cancellation financing
for IDA, in line with their total contribution to IDA 14. Donors
will make additional IDA and AfDF contributions in the existing
three-year replenishment cycles. For the current three year period
(July 2005-2008) donors will be making contributions additional
to those already agreed in the replenishment).
When agreed by the Boards of the World Bank, IMF
and African Development Bank (AfDB), debt relief under the new
proposal could be worth up to US$55 billion to 38 countries. Once
approved, 18 countries would become eligible for relief worth
US$40 billion. And this number will rise as more countries progress
through the HIPC Initiative.
Whilst the exact details are impossible to predict,
as cut off and implementation dates are not yet known, it is likely
that the UK share of this multilateral debt relief up to 2008
will be around $130-150 million. This will be funded using some
of the additional resources allocated to DFID in the recent Spending
Review. Our multilateral debt assistance will be in addition to
generous UK contributions to the IDA 14 and AfDF X replenishments,
as well as to our debt relief under HIPC and continued support
under the Multilateral Debt Relief Initiative for countries not
covered by the new G8 proposal.
In 2010 the resources freed up by the G8 debt proposal
would be about $1.7 billion, in comparison to the additional aid
of $48-50 billion a year in 2010 on top of 2004 levels.
Universal AIDS treatment
The G8 have declared their intention to aim for as
close as possible to universal access to AIDS treatment to all
those who need it by 2010. Limited health care capacity is a major
constraint to achieving this. Without major improvements to existing
health care services, it will not be possible to scale up good
quality AIDS treatment and care, including access to antiretrovirals.
More effective services will help remove bottlenecks in drug production
and supply. They will rely on more doctors and nurses being employed,
establishing reliable and accountable supply chain management
and reporting systems, better efforts to promote awareness and
availability of services, NGO mobilisation to make treatment effective,
and a massive scaling up of voluntary and provider-initiated HIV
testing facilities so people can find out if they need treatment.
The G8 have committed to working with our partners in Africa to
address these needs.
The G8 have also committed to working with WHO, UNAIDS
and other international bodies to establish the best way forward.
It has asked the international bodies to develop and implement
a package for HIV prevention, treatment and care, which will help
build universal access to treatment by 2010 into countries' AIDS
programmes. To begin this process on 2 September, the UK convened
a small group of experts (our G8 partners, international organisations
including UNAIDS, WHO and World Bank, and representatives of African
governments and civil society) in an informal meeting to progress
the G8 commitments on AIDS.
At the Millennium Review Summit the outcome document
included the commitment to "develop and implement a package
for HIV prevention, treatments and care with the aim of being
as close as possible to the goal of universal access to treatment
by 2010 for all those who need it." UNAIDS were asked to
develop a plan to deliver this package. Progress on this process
will be reported to the 2006 UNGASS, and we will monitor developments
along the way.
Arms Trade Treaty
The Committee asked about the prospects of progress
on an Arms Trade Treaty in advance of the 2006 UN Review Conference
in relation to stemming the proliferation of small arms. At Gleneagles,
G8 governments identified international standards in arms transfers
as an important step towards tackling the undesirable proliferation
of conventional arms. Nevertheless, it is clear that we have a
long way to go before such a treaty is agreed. We will continue
to work to build broad-based support for an Arms Trade Treaty
as an important contribution to conflict prevention, governance,
respect for human rights and development.
In our view, a legally binding treaty that regulates
all conventional arms is the best way to stop the flow
of illegal arms to Africa and other regions caught up in a cycle
of violence and destruction. Although we are at a very early stage
in this process, we believe that there is a real chance to secure
agreement at the 2006 UN General Assembly on the need to start
treaty negotiations, and we will be working towards this medium
term goal.
As noted by the Secretary of State in his evidence,
it is small arms and light weapons that have been most commonly
used to wreak havoc and destruction in Africa. This is why we
are also trying to strengthen the existing UN Programme of Action
on small arms and light weapons through the Transfer Controls
Initiative. When the Programme of Action is reviewed at the UN
in July 2006, we hope member states will to sign up to stronger
controls over the transfer of small arms and light weapons. Combined
with our efforts through the Global Conflict Prevention Pool to
take weapons out of circulation, such an initiative will help
stem the uncontrolled flow of weapons both to, and within the
African continent.
September 2005
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