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United States Provides Afghanistan Full Debt Forgiveness

07 February 2006

United States joins Russia, Germany in canceling all Afghan debt

The United States announced February 7 that it would join Russia and Germany in canceling 100 percent of the debt owed to it by Afghanistan.  This amounts to $108 million in debt relief from the United States, according to a statement by State Department spokesman Sean McCormack.

McCormack said, “The solution of the debt problem through the Paris Club process will strongly contribute to the development of Afghanistan's trade, investment, and other economic ties with its major creditors and with the rest of the world.”  He called on other nations to provide Afghanistan the same 100 percent debt relief.

The Paris Club is an informal grouping of governments that have lent substantial sums to other governments around the world.  The Paris Club, which is headed by a senior French Treasury official, seeks coordinated and sustainable solutions to payment difficulties by debtor nations.

Russia and Germany, the other two members of the Paris Club that hold debt with Afghanistan, previously canceled Afghanistan's debts to them.

For additional information, see Rebuilding Afghanistan.

Following is the text of McCormack’s statement:

(begin text)

U.S. DEPARTMENT OF STATE
Office of the Spokesman
February 7, 2006

STATEMENT BY SEAN MCCORMACK, SPOKESMAN

Debt Cancellation for Afghanistan

The United States intends to cancel all of the debt owed to it by Afghanistan, approximately $108 million, subject to domestic legal requirements.  The U.S. action will be done through normal Paris Club procedures. Russia and Germany, Afghanistan's other Paris Club creditors, also intend to provide 100 percent cancellation.

The government and people of Afghanistan are working diligently to build a sustainable market economy despite many challenges.

The solution of the debt problem through the Paris Club process will strongly contribute to the development of Afghanistan's trade, investment, and other economic ties with its major creditors and with the rest of the world.  The United States calls on other bilateral creditors of Afghanistan to provide the same 100 percent relief.

(end text)

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