Poor Must Get More Debt Relief, Says Blair

Tony Blair called last night for G8 countries to boost the fund available for the world's poorest countries after the downturn in the global economy left some worse off despite the debt relief they had received.

With summit leaders discussing the state of the global economy after last year's attacks on New York and Washington, the prime minister said that, with sufficient help, there was no reason why Africa should not be as prosperous as the tiger economies of East Asia within his lifetime.

Mr Blair urged fellow members of the G8 to back proposals to strengthen the HIPC (heavily indebted poor country initiative) trust fund, which provides the money for debt relief. Britain has become alarmed that falling commodity prices and the collapse in world trade have meant that 10 of the countries granted debt relief are still finding repayments unsustainable.

Mr Blair was backed by the German chancellor, Gerhard Schröder, who said the G8 should do more to cut Africa's debt burden and help it export more.

Mr Schröder said: "Industrialised nations need a more intensive partnership with Africa, whose tremendous potential wealth stands in marked contrast to the poverty and hunger that is the lot of most of its inhabitants."

Noting that Nigeria was wealthier than South Korea in the early 1960s, the prime minister said: "It is not rocket science that is necessary. It is sound systems of governance, plus some help, plus access to markets."

Mr Blair also urged the G8 countries to step up their efforts to make progress on the new round of trade negotiations launched in Doha last year, arguing that freer trade would help growth in both the developed and developing world.

He said: "It will take a long time to get the WTO process to move, and the main thing we are going to have to fight for is keeping that process on track. Our position is that we should be opening up markets as fast as we can."

Negotiations so far have been stymied by President George Bush's decision to put tariffs on imported steel and to hand massive subsidies to the US agricultural sector.

With mid-term elections due in November, Mr Bush has refused to yield to demands from Europe to drop the protectionist measures, but was left in no doubt yesterday that the measures he had introduced were harming the prospects for the global economy when the outlook remained uncertain.

guardian.co.uk/globalisation