The British government, which this year is the head of the G-7, said the group will stop collecting about $3 billion a year from countries affected by devastated tsunami including Indonesia, Thailand and Sri Lanka until the costs of reconstruction have been assessed by lenders such as the World Bank and International Monetary Fund.
The G-7 ministers said that they recognized that some countries would be unable to make repayments this year. On Thursday, both the World Bank and International Monetary Fund also came out in support of a debt moratorium
Extending the freeze on repayments will be taken up when officials from the Paris Club, a group of 19 creditor nations, meet Wednesday and the G-7 finance ministers convene in London Feb. 4 and 5.
The G-7 members, which comprises of Britain, Canada, France, Germany, Italy, Japan and the United States and have a system of rotating chairmanship, also called for urgent consideration of an early-warning system for tsunamis in the Indian Ocean.
According to the World Bank (WB), Indonesia and India have the biggest foreign debts, including loans from countries not part of the Paris Club nations. It said Indonesia owed $132 billion and India $104 billion in 2002, the last year for which general figures were available.
The WB said other overall debt levels were: Thailand $59 billion, Sri Lanka $10 billion, Malaysia $48 billion, Somalia $2.7 billion and the Maldives $270 million.
