Asean members support RP’s debt relief proposal

NEW YORK CITY — The Association of Southeast Asian Nations (Asean) is helping push in the United Nations the Philippine initiative for a global large-scale debt relief.

Ambassador Lauro Baja, the country’s permanent representative to the UN, told visiting Filipino journalists that an Asean working committee has drafted a communiqué endorsing and pushing for the proposal of Speaker Jose de Venecia Jr. for a program to convert half of billions in dollars of debt payment receipts of creditors into equity in development projects of debtor-countries.

He said the communiqué would be adopted during the Asean-UN council meeting that President Arroyo will preside over on Wednesday (New York time, Thursday in Manila).

"We are now working out the language of the statement with our UN counterpart group, but we don’t expect any problem from them," Baja said.

UN Secretary General Kofi Annan is among several world leaders who have already expressed their support for De Venecia’s proposal, whose principal objective is to unlock funds to enable poor countries to achieve the UN Millennium Development Goals (MDG) that are geared toward cutting world poverty in half by 2015. Baja said another working committee, in which he also sits, is drafting the declaration that would be approved by heads of state and government of about 190 nations during their World Summit at the UN headquarters that ends on Thursday (Friday in Manila). "There are three paragraphs pushing for our debt-for-equity proposal in the draft statement. The US representatives have some objections on the language (of the declaration), but we hope to iron that out shortly," he said.

De Venecia formally presented his proposal to his counterparts who attended the second world conference of heads of parliaments at the UN last week.

He said in the case of the Philippines, the debt relief program, if approved by creditors, would free up more than $2 billion in annual debt payments, which should be invested in MDG-related projects.

De Venecia said the political statements to be made by world leaders would increase the pressure from creditor governments and banks to grant debt relief to poor nations, a large part of whose resources is eaten up by debt payments.

"In our case, a third of the national budget, or about P300 billion, goes to interest payments alone. An additional P370 billion goes to principal amortization," he added.

He stressed that the political statements should be transformed into decisions by creditor governments and banks.

Next week, De Venecia is proceeding to Washington D.C. where he will be presenting his proposal to the World Bank and the International Monetary Fund upon the two financing agencies’ invitation.

"That is what is critical — the decision of the World Bank and the IMF and other creditors," he said.