Global financial leaders have approved a landmark plan to cancel an estimated £22 billion worth of poor countries’ debt. In Washington, the 184-nation International Monetary Fund and the World Bank held weekend sessions while seven of the world’s biggest industrial powers met on Friday.
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Financial officials from around the world agreed to write off the money owed to them by the poorest countries. Their plan was outlined at a media briefing on Sunday by Development Committee chairman Trevor Manuel, World Bank president Paul Wolfowitz and IMF managing director Rodrigo de Rato.

“The [debt] agreement now carries the full weight of support of all member states of the IMF and the World Bank and sets the basis for the next moment. These agreements are premised firstly on 100 percent debt relief” Manuel said.

The World Bank's committee endorsed the debt cancellation deal on Sunday, one day after the IMF announced theirs late on Saturday.

"The path to complete debt relief has now been cleared," bank president Paul Wolfowitz said. He said that the action represents "significant progress in fulfilling our promise to the world's poorest people."

The debt cancellation plan could allow poor nations to spend more on fighting poverty, improving education and treat HIV/AIDS or malaria. At least 18 poor countries, most of them in Africa, would benefit from the plan which relieves them of £22 billion worth of debt.

|QUOTE|The 18 are: Benin, Bolivia, Burkina Faso, Ethiopia, Ghana, Guyana, Honduras, Madagascar, Mali, Mauritania, Mozambique, Nicaragua, Niger, Rwanda, Senegal, Tanzania, Uganda and Zambia.

Last night, US Treasury Secretary John Snow revealed the World Bank’s development committee had "strongly endorsed the proposal for 100 percent cancellation".

“We expect the executive boards of the IMF and World Bank to swiftly give final approval and move on to implanting it," he said.

"It's gratifying to see our persistence and commitment pay off,” said Snow.

Leaders of the G8 nations – Britain, the US, Japan, Italy, Germany, France, Canada and Russia - have vowed to underwrite the debt plan in covering the loan payments that have been lost.

If certain conditions are met, as many as 20 are eligible to get debt relief, which would push the total amount of debt cancellation to over US$55 billion to spread over the course of decades.

"Alleviation of that debt will help achieve a substantial poverty reduction," IMF chief Rato said.

|TOP|The action has been praised by anti-poverty groups. "This debt deal will benefit tens of millions of the poorest people on the planet," said Irish rocker and anti-poverty campaigner Bob Geldof. He had organised the "Live 8" concerts earlier this year to highlight the fight against global poverty.

"This, as we have always said, is only a beginning. But, what a beginning. The deal should be implemented without delay," Geldof said.

The framework for the debt deal was agreed at the G8 meeting in July in Gleneagles, Scotland. But details of implementing it were left mostly to the World Bank and IMF. About 70 percent of the debt is owed to the World Bank, with the remainder owed to the IMF and the African Development Bank.

The G8 drafted a proposal and issued a written pledge on Friday to cover the full cost of the scheme over concerns that cancelling repayments would disable the World Bank to continue lending to poor countries.

Oxfam International has estimated that poor countries spend US$100 million a day on debt repayments.