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13 January 2005

Major Creditor Nations Offer Debt Relief to Tsunami Countries

United States, other Paris Club members to consult on additional steps

Washington -- The Paris Club of major creditor nations says that countries affected by the Asian tsunami crises may halt their debt repayments so as to devote all available resources to humanitarian and reconstruction efforts.

In a January 12 announcement, the Paris Club said that its 19 members would not expect debt repayments from countries that request such relief until the World Bank and International Monetary Fund (IMF) have completed an assessment of their reconstruction and financing needs.

The Paris Club comprises Austria, Australia, Belgium, Canada, Denmark, Finland, France, Germany, Great Britain, Ireland, Italy, Japan, the Netherlands, Norway, Russia, Spain, Sweden, Switzerland and the United States.

More than 150,000 people are estimated to have been killed by waves generated by the December 26, 2004, earthquake centered near the Indonesian island of Sumatra.  At least 100,000 of the victims were in Indonesia.

According to news reports, Indonesia, Sri Lanka and the Seychelles are the countries most likely to accept the Paris Club offer, while India and Thailand might decline the offer to maintain their credit ratings on international financial markets.

Creditor nations also said they would consult with tsunami-affected countries on additional steps that ought to be taken to speed the relief and reconstruction effort.  Specific decisions will be taken in response to requests from individual countries, the Paris Club statement said.

The United States had earlier signaled its interest in offering debt relief to the region.  On January 10, White House Press Secretary Scott McClellan told reporters he expected the United States and other industrial powers to agree on repayment suspensions for affected countries until tsunami-related assessments were complete.

"We recognize that some countries may be unable to make debt payments," McClellan said. "We'll work on a consensus approach."

For additional information on the overall aftermath of the Indian Ocean tsunami, see “U.S. Response to Tsunami and Earthquake in Asia” at: http://usinfo.state.gov/gi/global_issues/recovery.html

(Distributed by the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)