PARIS, June 14, 2006 (AFP) – The Paris Club of the world’s richest lending nations marks its golden anniversary Wednesday, facing questions over its role in a new era of growing wealth in many debtor nations. Created in 1956 during a meeting in Paris of creditor nations for Argentina, the 19 Paris Club members, covering the globe from Germany and Switzerland to Japan and the United States, have some 400 agreements worth about 500 billion dollars in its 50-year history.
But at the half century mark, the leading government creditors find themselves confronting a challenge from the growing power of emerging nations — along with the trend toward debt cancellation of the poorest nations.
Rather than seek loans from the Paris Club, more countries are turning to the new economic powerhouses, such as Brazil and China, which are ready to open their purses.
At the same time, the newly rich nations are paying off their debts.
Profiting from soaring oil prices, Algeria and Russia for example have recently been able to make early repayment of part of their debt to the Paris Club, depriving their creditors of interest payments.
The new era has started raising questions about the club’s usefulness, acco