The Government today raised concerns over the economic sustainability of the World Bank/IMF’s debt relief policy for poor countries.
In a review by Ireland Aid and the Department of Finance, the Government questioned the adequacy of debt relief and the implementation of the ‘Heavily Indebted Poor Countries (HIPC) Initiative’.
The Minister of State at the Department of Foreign Affairs, Mr Tom Kitt, called for a link between debt cancellation policies and efforts by poor countries to fight corruption and strengthen their governments.
The Minister said there was also a need to help HIPC's to improve their debt management and to borrow prudently.
Mr Kitt expressed reservations about what he called "over-optimistic" projections used to decide debt levels.
"The result is that some countries qualifying for debt relief under the current system are not having their debts lowered to a level which is sustainable. Instead they continue to have high debt service payments," the Minister said.
He said too much focus was being placed on economic indicators instead of indicators that take human development into account.
"The debt burden continues to be an obstacle to the efforts of poor countries to reduce the number of people living in extreme poverty," he said.