The Group of Seven wealthy nations pledged to increase Third World debt relief today but a deal struck after major disagreements fell short of proposals floated by British Chancellor of the Exchequer, Mr Gordon Brown.
"We are willing to provide as much as 100 per cent debt relief on all multi-lateral debt for individual HIPC countries," Mr Brown told a news conference, referring to dozens of Highly Indebted Poor Countries, most of them in Africa.
"It is the rich countries hearing the voices of the poor...showing that no injustice can last forever," he said.
Mr Brown, who chaired the G7 talks, had pushed for a complete write-off of African debt and a doubling of aid to $100 billion a year but the latter proposal ran into US opposition and there was no agreement on it.
Sub-Saharan Africa owes around $70 billion to multilateral lenders such as the World Bank and International Monetary Fund and Brown said these public agencies would now have to come up with plans on how to deliver on the debt relief pledge.
Washington had also objected to his proposal to use IMF gold reserves to fund the debt write-off and to a new financing mechanism that would double aid. A G7 communique said the IMF would produce ideas on this front by April.
US Treasury Under Secretary Mr John Taylor said he disagreed with the Brown plan, under which rich countries would provide guarantees to raise money in the capital markets, and use gold reserves to fund a debt write-off.
In the wake of the US opposition, Italy and Germany pushed for something less ambitious but backed the principle. The G7 comprises the United States, Japan, Germany, Britain, France, Italy and Canada.