Brown demands new deal for poorest countries

Gordon Brown called today for a new deal between the richest and poorest countries and a "shared resolve" to do everything possible to help victims of the Asian tsunami.

Gordon Brown called today for a new deal between the richest and poorest countries and a "shared resolve" to do everything possible to help victims of the Asian tsunami.

The Chancellor praised the "unprecedented" demonstration of generosity in response to the disaster and said there was a once-in-a-generation opportunity to deliver a new deal for the world's poorest countries.

As Mr Brown began his speech in Edinburgh to an audience including aid workers, the Prime Minister held his regular Downing Street press conference, fuelling suggestions from supporters of the Chancellor that the Prime Minister was deliberately trying to grab the media spotlight from his Cabinet colleague.

Mr Brown called for a modern-day Marshall Plan along the lines of the original scheme set up by the United States to help Europe recover after the Second World War.

"Let me start by expressing on all our behalfs not only our sorrow at the tragic consequences of the biggest and most devastating earthquake the modern world has ever witnessed but also our shared resolve to do everything in our power to help the victims, to tend the sick, to support the needy and to assist the reconstruction.

"The true test of the international community will be how we can fund and assist both the immediate day-to-day emergency services needs but also the long-term reconstruction of these countries.

"We must ensure that countries affected by the tsunami are not prevented from paying for essential reconstruction because they are having to fund the servicing of their debts.

"So, for afflicted countries that request it, we and other governments are proposing an immediate moratorium on debt repayments.

"And just as we are proposing more generally that we widen and deepen multilateral debt relief, we are also proposing 100% multilateral debt write-off for Sri Lanka - and unilaterally we, Britain, will pay ourselves 10% of that debt write-off."

The Chancellor said leading countries should consider "all options" for further help, pledging to raise the issue at the G7 finance ministers' meeting next month.

He said the world would have to do more to help set up early warning systems aimed at preventing future natural disasters, as well as develop health care, sanitation systems, infrastructure and emergency services in the world's poorest countries.

Britain would do everything it could to assist with the aftermath of the disaster, said Mr Brown, who used his speech to press for a campaign to address the underlying causes of poverty.

"So, while 2004 was a year which ended in the horror of a natural disaster, 2005 is a year that can start with the hope of human progress.

"The urgency and scale of the agenda I am going to propose for debt relief, for new funds for development and for fair trade is now even more pressing given the tragic events of recent days.

"It is because I want a world that does not have to choose between emergency disaster relief and addressing the underlying causes of poverty and injustice, between advancing first aid and advancing fundamental change, that the proposals I am putting forward today to advance the interests of all the developing world will, the Government believes, find support in all parts of the world."

The Chancellor said there was a clear case for a modern Marshall Plan, which involved developing countries as partners.

He called on all countries to deliver full debt relief for debt-burdened countries and to deliver a world trade round to benefit the poorest countries.

A new international finance facility should also be launched to offer immediate, long-term aid for investment and development.

Mr Brown said 2005 was a year of challenge on whether the world could provide enough emergency aid to victims of the Asian crisis as well as tackle global poverty.

"With the public reaction to the tsunami showing the mood of the British people, I believe this support is growing wider and deeper with, already, in Making Poverty History more than 100 aid, development, and trade organisations and anti-poverty organisations coming together in demonstrations, campaigns, petitions, in challenging Government to make poverty the issue of the year."

The Chancellor said he will propose to next month's finance ministers' meeting that other countries should contribute to a World Bank trust fund as part of plans to write off debts.

Urgent progress was needed on fair trade and an end to the "hypocrisy" of developed country protectionism as well as ending unjust tariffs and barriers.

Mr Brown's speech came ahead of a week-long trip to the African states of Kenya, Tanzania, Mozambique and South Africa to underscore the UK's commitment to assist the continent.

But his call for international action threatened to be overshadowed by Prime Minister Tony Blair's press conference.