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WASHINGTON (AFP) –
The United States Wednesday welcomed a decision by Paris Club creditors to cancel Afghanistan's debt owed to members as "a crucial step" toward economic sustainability.
The State Department said in a statement the move by the 19-member club is a "great achievement" for Afghanistan and shows how the world recognizes that Afghanistan has taken "great strides" to strengthen its economy.
"Lifting the debt burden inherited by the Afghan government marks a crucial step on Afghanistan?s road to economic sustainability," it added.
"The accord reached today will implement Afghanistan?s completion point treatment under the Enhanced Heavily-Indebted Poor Countries Initiative," the statement said.
"The accord also recognized Afghanistan's performance under its International Monetary Fund (IMF) program and its progress on adopting and implementing economic reforms in a tremendously challenging environment," it said.
The informal group of industrialized nations said in a statement it was erasing 585 million dollars of debt on a bilateral and voluntary basis after the Afghan government vowed to allocate the freed resources to combat poverty.
The Paris Club said it also decided to cancel an additional 441 million dollars representing the club's share of an IMF and World Bank initiative that provides low interest loans to the world's poorest countries.
The 1.026-billion-dollar debt forgiven by the Paris Club represents about half the public external debt that Afghanistan owed in March 2009, or 2.104 billion dollars, the group said.
