Tsunami and debt relief

United Nation Secretary-General Kofi Annan has welcomed New Zealand's contribution to the tsunami disaster relief fund

That's unsurprising since most of it is channeled through the United Nations, whereas Australia's contribution is channeled to those directly in need in Indonesia. It is well known that Miss Clark would like a job at the UN if she loses the election and being on Kofi Annan's good books is a step in the right direction. Helen Clark would rather be chummy with Kofi than with John Howard or Dubya, which is why there is no coordinated Australasian effort. Australia doesn’t need NZ's comparative paltry aid effort and NZ likes the UN rather than Australia.

New Zealand also agreed with the call to relieve debt to assist Tsunami-stricken victims, while Australia has not supported the move. Of course, debt relief is no substitute for emergency aid. Yet a debt moratorium would free up three billion dollars a year to assist these stricken countries, and is a plan mooted by leaders of G8 countries Britain, France and Germany. Indonesia owes about $132 billion dollars in debt. The greatest proportion of the debt is multilateral debt - that is, owed to the IMF, World Bank and other development banks.

The downside of a moratorium is that when it is lifted, payments are bunched up and the cost of borrowing could rise, meaning countries will find it even harder reduce their debt. The moratorium could even be seen by some agencies as a default on debt payments.

The G8 is composed of Britain, Canada, France, Germany, Italy, Japan, Russia and the United States.

But the G8's record of debt relief is not that great. The debt in the worlds 52 poorest countries is $375 billion, and over half of these countries spend more than 15% of their Government revenue on servicing debt. The G8 leaders have promised $100 billion of debt relief and have granted $46 billion - less than half what was promised. The next G8 summit is in Edinburgh, Scotland in July