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Australia’s upfront payment under the multilateral debt relief initiative

Today in South Africa the Treasurer announced a $A136.2 million payment to relieve the debts of some of the world’s poorest countries to the World Bank.

Releasing poor countries from unsustainable debt positions is a key part of the plan to reduce poverty.  Today’s payment fulfils Australia’s commitment for the first 10 years of the Multilateral Debt Relief Initiative (MDRI).  It reduces the debt burden of heavily indebted poor countries and ensures that the World Bank’s work in fighting global poverty is not reduced.

Australia is one of only a handful of countries in the world to have made an up-front payment to the World Bank to cover the costs for the first decade of the MDRI.  This payment is in addition to the $A112 million that Australia has already provided to the World Bank and the International Monetary Fund (IMF) for debt relief. 

The MDRI will cancel the debts of eligible poor countries to the IMF, World Bank and African Development Bank.  Australia was one of the first to support the MDRI and has taken a leading international role in implementing this important initiative. 

Today’s payment reaffirms the Australian Government’s commitment to the fight against global poverty and its longstanding support for the Heavily Indebted Poor Countries initiative that is already providing debt relief to 29 impoverished nations, including 25 African countries. 

In 2006-07 Australia will deliver almost $A3 billion in foreign aid, an increase of $A300 million on last financial year.

Johannesburg, South Africa

12 September 2006

Contact: Renae Stoikos

02 6277 7340