| IMF to revalue its gold reserves Original Source Link: (May no longer be active) http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=7519491http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=7519491
Rock star's lobby group urges debt deal at G7 meet Wed Feb 2, 2005 08:11 PM ET WASHINGTON, Feb 2 (Reuters) - A lobby group co-founded by rock star Bono said on Wednesday a deal among rich countries to write off debts of the world's poorest nations will probably incorporate aspects of both British and U.S. proposals. Jamie Drummond, executive director of DATA -- or Debt, AIDS and Trade in Africa -- said fresh hope for a deal on debt relief was given on Wednesday by Canada's support for 100 percent debt cancellation, ahead of a meeting of Group of Seven finance ministers in London this weekend.
Canada joins France, Britain and the United States in supporting 100 percent debt relief for poor countries burdened by excessive debt. The G7, which includes the world's richest countries, is however split over how such a move should be financed.
"There is strong support for cutting a deal that resembles the British proposal, or some combination of the American and British proposals," Drummond told a conference call.
British finance minister Gordon Brown has floated a proposal that would write off all IMF and World Bank debt owed by indebted poor countries. Donors would pay for the World Bank's debt reduction, while the IMF would fund its part by revaluing some of its gold reserves.
The United States sees the World Bank funding its own debt relief by moving to more grants. Critics have warned that any plan should not affect the bank's credit ratings and should ensure the lender won't have to charge more to lend.
Bono, who has long campaigned for more debt relief for impoverished countries, met with leaders from Britain and Germany, and finance chiefs from Italy and France during a World Economic Forum in the Swiss ski resort of Davos last week.
Drummond said the Davos meetings gave him new hope that countries could close the gap at the G7 round before a deal is struck by the next G7 meeting in Washington in April.
"It could be that there is sufficient momentum this weekend to ensure that debt deal does happen by the spring meeting," Drummond said.
G7 finance ministers meet four times a year to discuss global economic issues.
According to DATA, heavily indebted poor countries have about $9 billion in IMF debt stock with average annual payments reaching $338 million between 2006 and 2008.
Indebted poor countries will owe the World Bank an average of $460 million each year between 2006 and 2008, it said.
© Reuters 2005. All Rights Reserved.
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