NAIROBI, Kenya (AP) – AIDS patient Margaret Ashira, sitting in a tin-roofed shack in Africa’s largest slum, depends on private charity groups for the medicine she needs to stay alive. Her government says it can’t afford to help her because so much of its money goes to paying the interest on its huge foreign debt.

But that may be about to change. On Friday, finance chiefs from the world’s richest countries considered a proposal to alleviate the debt burden of countries like Kenya, where 2.2 million people are infected with HIV, out of a population of 30 million.

Britain, host of this weekend’s meeting of the Group of Seven most industrialized nations, says rich countries should pay the debt service obligations that poor nations owe the World Bank and the African Development Bank and that what the poor owe the International Monetary Fund be erased by reevaluating the fund’s gold reserves.

“They need to tackle this problem of debts if they really want to end poverty in the country and in Africa,” Ashira said as a mouse peered out from under her bed. “I say this because I know from experience that the HIV disaster is an epidemic that can make a person and a country very poor.”

Ashira is among the 600,000 people living in Kenya’s Kibera slum. In August, she became one of 28,000 Kenyans receiving free anti-retroviral drugs from charity groups, which get them from the U.S. Centers for Disease Control and Prevention. Many others who need treatment have no access to life-prolonging drugs.

The need is undeniably great, but debt relief is not a clear-cut solution.

Kenya spends some 40 percent of its budget to service its $9 billion debt – more than what it spends on health and education combined. But the country also loses millions of dollars every month to corruption.

Angola, for example, qualified for debt relief under an earlier international effort but was never able to collect because the government refused to open its books to international scrutiny. Human rights groups have alleged high-level corruption in Angola, oil-rich but struggling after years of civil war.

Angola, though, is among the countries that have applauded the British debt initiative.

Bastos de Almeida, the Angolan Finance Ministry spokesman, said in an interview on the eve of the G-7 meeting that while Angola has oil resources to meet debt payments, the payments are “a great burden” that divert resources from needy areas.

The debt relief plan “would help us redress the balance of our spending in favor of key social sectors, such as health and education, and economic regeneration,” Almeida said. He added that servicing Angola’s $10 billion debt devours almost 20 percent of the annual state budget of about $12 billion, while education receives 7 percent and the health sector gets about 5 percent.

Irungu Houghton, a Kenyan who advises the British charity Oxfam, played down the risk of governments squandering or stealing money saved through debt relief. He cites Malawi and Uganda as countries that benefited from earlier debt relief programs and spent the money saved to fight AIDS and other health problems.

“In fact, contrary to the concerns of the G-7 skeptics, the practice has been that where there has been debt cancellation – with the appropriate programs – it has gone directly to boosting access to health and access to education,” Irungu said.

In 2002, the world’s poorest countries paid $100 million a day, or $36.5 billion a year, to their rich country creditors, more than what they spent on health, a group of international aid agencies said in a recent report.

In the same year, the countries received only $17 billion in aid, Oxfam, Actionaid and the Catholic Agency for Overseas Development said.

Rich countries can find the money to finance debt relief, aid workers said, noting that Iraq’s debts totaling $31 billion were canceled in one day last November. That is more than all the debt relief granted in the last five years under the World Bank and International Monetary Fund’s initiative for Heavily Indebted Poor Countries.

Much of Africa’s debt dates to the 1970s and ‘80s, when poor countries borrowed to fund domestic projects on the back of the commodity price boom. According to the World Bank, the borrowing nations were hit hard when prices fell and interest rates soared in combination with oil price shocks.

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Associated Press writer Casimiro Siona contributed to this report from Luanda, Angola.

AP-ES-02-05-05 0352EST

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