Debtor Nations Freed of Burdens

The decision by the Group of 8, the world's leading industrial nations and Russia, fulfilled a decades-old dream of anti-poverty activists, who have argued that payments on old loans drain the limited resources of the world's poorest nations, most of which are in Africa, keeping millions of people mired in poverty.

British Chancellor of the Exchequer Gordon Brown, the major force in putting together the debt-relief package, announced that the poor nations' debt to the World Bank, the African Development Bank and the International Monetary Fund would be wiped out. Richer countries have agreed to replenish the reserves of the funding organizations as necessary.

Brown said the debtor nations would be relieved of $15.6 billion in payments on the $40 billion over the next 10 years, and the savings would be funneled to urgent needs in health, education and infrastructure development.

The decision qualifies 14 countries in Africa and four in Latin America for immediate debt forgiveness. An additional 20 countries could qualify over the next two years. Brown said the total size of the debt relief package could eventually reach $55 billion, believed to be the largest such initiative in history.

U.S. Treasury Secretary John W. Snow, who was in London for the finance ministers' meeting at a conference center near Westminster Abbey, hailed it as "an achievement of historic proportions."

Although some African countries that will not immediately benefit questioned the value of the agreement, a spokesman for South African President Thabo Mbeki declared the agreement "good news" for the continent.

"We are really encouraged by this decision and want to thank the British government and all the countries involved in this agreement," said the spokesman, Bhelo Khumalo. "It will go a long way to enriching the African continent."

The action by the finance ministers was spearheaded by Britain as part of a drive by Brown and Prime Minister Tony Blair to aid Africa and help fulfill United Nations goals to cut world poverty in half by the year 2015. Many parts of the world have made progress in recent decades, but people in many sub-Saharan countries are poorer than they were decades ago and are dying younger.