“The world has come together,” said British FM Gordon Brown who has championed the debt write-off and chairs the IMF’s steering group, the International Monetary and Financial Committee. The plan will be in operation by the end of the year.
The World bank share holder’s will follow the IMF’s lead and also cancel the 18 countries which are included in the above list, which are mostly African countries, debts to it. Initially the amount is expected to be $ 40 bn but it can go upto $ 55 bn as more countries become eligible for the debt write off.
African nations welcomed the deal but wanted to ensure there would be no extra strings attached to receiving the money and called for more nations to become eligible.
Aid campaigners were relieved that the plans that have been floated for years finally appeared to be turning into reality
The World Bank said the debt deal could boost recipients’ annual economic growth by half a percentage point. The deal that has been sealed by the Fund this weekend will provide urgently needed money for education and health care,”
Now only World Bank has to approve the deal since IMF has already crossed the barrier.