Debt Forgiveness
The UK Government has been a leading proponent of the various debt reduction initiatives from the outset and was influential in achieving the G7 agreement to enhance the Heavily Indebted Poor Countries (HIPC) Initiative. The HIPCs are about 40 of the world's poorest countries with GDP per capita of less than $765 and which are eligible only for the World Bank's (external link) most concessional (low interest) loans.
UK Government policy on debt is led by the Treasury (external link), which sets policy after consultation with other government departments including the Department for International Development (DfID) (external link), the Foreign and Commonwealth Office (FCO) (external link) and ECGD.
In addition to the UK playing a full role in multilateral initiatives, in December 1999 the Chancellor announced that the UK would forgive 100% of the debts owed by HIPCs, with forgiveness to take effect at the same time as multilateral debt relief. All G7 industrialised nations have now signed up to provide 100% debt relief to the world's poorest and most indebted nations.
ECGD is the holder of most of the sovereign debt owed to the UK. Its International Debt Policy Branch of the Business Group is responsible for sovereign debt management.
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