<html>
<head>
<meta name="Generator" content="Corel WordPerfect 8">
<title>AXWORTHY ANNOUNCES DEBT RELIEF CONTRIBUTION</title>
</head>
<body text="#000000" link="#0000ff" vlink="#551a8b" alink="#ff0000" bgcolor="#c0c0c0">
<p><font face="Courier"></font><font face="Univers" size="+2"></font><font face="Univers" size="+2">June 9, 1998 No. 152</font></p>
<p align="CENTER"><font face="Univers" size="+2">AXWORTHY ANNOUNCES DEBT RELIEF CONTRIBUTION</font></p>
<p><font face="Courier">Foreign Affairs Minister Lloyd Axworthy today announced a Canadian contribution
of $30 million toward debt relief among the world's most heavily indebted poor
countries. Mr. Axworthy made his announcement in Ouagadougou, Burkina Faso, where
he is attending the Organization of African Unity Summit. This is Mr. Axworthy's
first official trip to Africa.</font></p>
<p><font face="Courier">"International debt is one of the most critical obstacles to progress for
emerging economies, and Canada has been a leader in helping to relieve developing
countries of this burden," said Mr. Axworthy. "Since 1978, Canada has forgiven $3
billion in international debt, much of which was owed by African countries. In
fact, since 1987, all Canadian development assistance has been provided in the
form of grants." </font></p>
<p><font face="Courier">In 1975, the World Bank established the Interest Subsidy Fund (ISF) through
voluntary contributions from Canada and the governments of 14 other OECD
(Organization for Economic </font></p>
<p><font face="Courier">Co-operation and Development) and oil-exporting states. It was established to
provide interest rate subsidies on loans made by the Bank to low income countries
suffering from rising oil prices.</font></p>
<p><font face="Courier">Despite providing nearly US$292 million in subsidies since 1975, the ISF has
accumulated US$170 million in unused resources. Canada's share is just over US$22
million, or about C$30 million at current exchange rates.</font></p>
<p><font face="Courier">Canada will contribute its share of this surplus to the World Bank's Heavily
Indebted Poor Country (HIPC) Trust Fund. The HIPC Initiative stems from appeals
made by the G-7 at the Halifax Summit in 1995 to further ease the debt burdens of
the world's poorest and most heavily indebted countries.</font></p>
<p><font face="Courier">As most of these countries are in Africa, Canada has decided to use the bulk of
its ISF refund (C$20 million) to help the African Development Bank write down its
claims against HIPC-eligible member countries. African countries that have so far
benefited from the HIPC initiative include: Uganda, Burkina Faso, Mozambique and
Côte d'Ivoire. Mali and Guinea-Bissau are expected to qualify shortly. In March
1998, Canada, through the Canadian International Development Agency, contributed
$8 million to Mozambique to help it reduce its debt under the HIPC.</font></p>
<p><font face="Courier">Funding for the projects announced today was provided for in the February 1998
federal budget and is therefore built into the existing fiscal framework.</font></p>
<p align="CENTER"><font face="Courier">- 30 -</font></p>
<p><font face="Courier">For further information, media representatives may contact:</font></p>
<p><font face="Courier">Debora Brown</font></p>
<p><font face="Courier">Office of the Minister of Foreign Affairs</font></p>
<p><font face="Courier">(613) 995-1851</font></p>
<p><font face="Courier">Media Relations Office</font></p>
<p><font face="Courier">Department of Foreign Affairs and International Trade</font></p>
<p><font face="Courier">(613) 995-1874</font></p>
<p><font face="Courier">This document is also available on the Department's Internet site:
http://www.dfait-maeci.gc.ca</font></p>
</body>
</html>
