Russia wants former Soviet republics to pay debts to G8

Russian President Vladimir Putin on Monday said the poorest former Soviet republics should be included in a G-8 debt forgiveness package that was agreed at last year's summit of the leaders of the world's richest nations. "We agreed from the start that we have very serious problems that are analogous with those of African countries, connected to education, the fight against infectious diseases, and with poverty," Putin was quoted by Russian news agencies as saying.

Photo: Russia wants former Soviet republics to pay debts to G8

"We must ... reach an agreement with our partners that a significant part of the funds intended for aid to the poorest countries to go to support our neighbors in the post-Soviet space," Putin said. Finance Minister Alexei Kudrin noted that the poverty-wracked Central Asian nation of Tajikistan had already been included in the list of countries whose debts to the World Bank and the IMF would be waived.

The comments came after finance ministers from the G-8 convened in Moscow on Saturday for talks focussing on the effects of high oil prices on the global economy as well as efforts to implement a US$37 billion ( Ђ 31 billion) debt write-off brokered at the Gleneagles summit last year.

In a statement Saturday, the World Bank said it was on track to complete "technical work" to begin the so-called Multilateral Debt Relief Initiative by midyear.

Under the agreement, World Bank shareholders agreed to write off 100 percent of debts owed by 28 countries, as well as agreeing to replenish the World Bank's trust fund for poor countries to make up the US$14 billion ( Ђ 12 billion) cost.

The International Monetary Fund, owed a smaller share of the debt, began writing off debts at the end of 2005. Keen to flex its new-found financial muscle, oil-rich Russia announced ahead of the Saturday meeting that it would write off US$688 million ( Ђ 575 million) of debts owed by 16 African countries, as well as pay down a further US$12 billion ( Ђ 10 billion) in Soviet-era debts to the Paris Club of rich nations, reports the AP.

N.U.