Africa, the G8, and the Blair Initiative [Updated June 14, 2005]   [open pdf - 74KB]

"The Bush Administration is reacting cooly to the proposed IFF on grounds that it lacks a means of assuring that new aid funds would be well spent. IFF supporters note that the funds would be passed through existing aid agencies with their own monitoring mechanisms. The U.S. share of the initial $25 billion aid boost has been estimated at $6 billion. Over the long term, Blair sees the IFF as a way of 'frontloading' aid as the G7 move toward a U.N. goal of giving .7% of GDP in development assistance. For the United States to reach an interim .5% would require about $40 billion annually, which some see as unrealistic. Others argue that the G7, working together, could readily afford the IFF. U.S. officials maintain that a pledge to repay IFF bonds after 2015 would unconstitutionally bind future Congresses; others point out that the United States routinely agrees to repay debt in the future. On June 10-11, 2005, G7 finance ministers reached agreement, pending ratification at Gleneagles, on debt forgiveness for 18 of the worlds poorest countries, including 14 in Africa. The donors are to compensate the World Bank and the African Development Bank for the lost repayments. The IMF will fund the loss from its own resources, but not sell gold. The Bush Administration supports reducing trade barriers, but many see them as an important protection for U.S. interests."

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CRS Report for Congress, RL32796
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