The controversial subject of a total debt cancellation for the world's poorest countries is a matter which I feel very strongly about. Current approaches to deliver debt alleviation for highly indebted poor countries (HIPC) are not sufficient at all. Despite all the apparent 'good will' by the international community, the HIPC are still forced to allocate on average 40% of their annual budgets to debt servicing, which reduces their ability to offer their citizens the most basic social services such as healthcare and education. Ironically, the development aid provided by the EU and its Member States to the world's poorest countries is often not even sufficient to cover the cost of servicing their external debt - a vicious circle.

I therefore call for the proper implementation of the so-called Barcelona commitments, made by the European Union in March 2002, which aim to ensure "that developing countries, and especially the poorest ones, can pursue growth and development unconstrained by unsustainable debt dynamics". I fully agree with the United Nations Development Programme (UNDP) that poverty reduction should be at the heart of the debt analysis and that a country's debt servicing capacity should be assessed relative to its needs for achieving the Millennium Development Goals (MDGs - internationally agreed development targets to halve poverty by 2015). According to recent studies by both the UN and international relief agencies, the world's poorest countries will thus require a 100% debt cancellation as well as further aid flows if they are expected to reach the MDGs.

I strongly support the call for the World Bank and the IMF as well as bilateral and international private creditors to cancel the outstanding debts owed to them by low income countries whose own revenues and levels of donor aid are not sufficient to reach any kind of sustainable development. Moreover, as expressed above, this (total) debt cancellation should be additional to current aid money and must not be financed out of development aid budgets.

As the UK Conservatives' Spokesman for Overseas Development in the European Parliament, I will continue to support policies, which will enable the developing countries to overcome poverty and eventually succeed in the global economy.

Notes To Editors:

Nirj Deva is a Conservative MEP for the South East of England and is Spokesman on the Committee for Overseas Development and Co-operation as well as the European Parliament's ‘rapporteur’ on the WTO and poverty eradication