Giving special consideration to credit worthy low-income countries

Financing and cost-evaluation: An increase in official development assistance to 0.7% of GDP funding would amount to approximately a doubling of current levels, which are in the order of US$ 55,000 million to US$ 110,000 million per annum.

Debt relief: On the basis of a study by the World Bank, it should be possible to reduce debt owed to private banks by developing countries by about US$ 200,000 million for a cost of about US$ 25,000 million, through coordinated action. Debt owed to bilateral official creditors by severely indebted low-income countries amounts to some US$ 40,000 million. It has been suggested that most or all of this debt should be written off. Debt owed to bilateral creditors by severely indebted middle-income countries is in the order of US$ 80,000 million. A reduction of some US$ 40,000 million should be given consideration in order to make a substantial positive impact on the economies of debtor countries. Arrears owed to multilateral creditors suggested for clearing amount to some US$ 3,500 million. An annual subsidy of some US$ 2,000 million could be considered in order to reduce substantially debt service to be paid by severely indebted low and middle-income countries to multilateral creditors. In total, a one-time payment of US$ 28,500 million, a recurrent interest rate subsidy of US$ 2,000 million a year and a write-off of US$ 80,000 million are suggested. The budgetary cost associated with the suggested write-off would be significantly lower than the amount of the write-off when account is taken of the actual amounts due for repayment in the medium-term, the likelihood of default and other such factors.