Algeria to settle Paris Club debt

Algeria to settle Paris Club debt

BBC, 11 May 2006

Algeria is to pay back all of the $8bn (£4.3bn) debt it owes to the Paris Club group of rich creditor nations.

Under the deal, the African nation will pay the debt over six months, starting in June.

The Paris Club said the move reflected Algeria’s economic recovery in recent years. Rich in oil and gas, it has benefited from high energy prices.

It was also announced that Russia is to begin talks on the reimbursement of its $22bn Paris Club debt.

Fossil fuel rich

Driven by its fossil fuel resources, Algeria’s economy grew 5.1% last year, and by an average of 5% from 2000 to 2004.

Its energy revenues reached $45.49bn in 2005, up from an estimated $31.55bn in 2004 and $23.99bn in 2003.

Economist Koceila Maames said that sales of oil and gas meant Algeria’s foreign exchange reserves had jumped from $4bn in 1998 to more than $60bn today.

He added that Algeria was paying its Paris Club debt back early to improve its image before international investors.

Russia talks

Talks between Russia, which is a member of the Paris Club, and the other 18 nations in the organisation will start in June.

Russia, another country rich in fossil fuels, has also benefited from higher energy prices.

The Paris Club said in a statement that a majority of its members agreed in principle to Russia’s proposal.

Russia’s largest creditors are Germany, Italy, the US and France.

The Paris Club’s permanent members are Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Japan, the Netherlands, Norway, Russia, Spain, Sweden, Switzerland, the United Kingdom, and the US.