A/HRC/2/SR.12 The meeting was called to order at 1.55 p.m. Implementation of General Assembly resolution 60/251 of 15 March 2006 entitled “Human Rights Council” (agenda item 2) (continued) Presentation of reports followed by interactive dialogue on the report by the Independent Expert on the effects of economic reform policies and foreign debt on the full enjoyment of all human rights (E/CN.4/2006/46 and Add.1) Presentation of reports followed by interactive dialogue on the report by the Special Rapporteur on the sale of children, child prostitution and child pornography (continued) (E/CN.4/2006/67 and Add.1-3) 1. Mr. Mudho (Independent Expert on the effects of economic reform policies and foreign debt on the full enjoyment of all human rights), introducing his report (E/CN.4/2006/46 and Add.1), said that the situation of the heavily indebted poor countries had improved only slightly over the past year and their overall debt was still estimated at US$ 500 billion. Debt-servicing continued to undermine poor countries’ ability to use internal and external resources in order to further the implementation of human rights and the Millennium Development Goals (MDGs). Some progress had been made through the approval of debt-service relief of US$ 56 billion for 28 countries under the Heavily Indebted Poor Countries (HIPC) Initiative. The relief operation was expected to reduce those countries’ debt-service payments by US$ 1 billion annually. 2. In addition, the Multilateral Debt Relief Initiative (MDRI) endorsed by the Group of Eight in July 2005 provided for the cancellation of 100 per cent of debt which the world’s most indebted poor countries owed the International Monetary Fund (IMF), the World Bank and the African Development Bank. The total amount of debt relief granted under the MDRI was estimated to be about US$ 50 billion. Although the amount of debt cancelled was modest compared with the US$ 500 billion still owed and the initiative only extended to a limited number of poor countries and three financial institutions, it was an important first step and provided participating countries with some US$ 1.2 billion for MDG-related spending that would otherwise have been paid to multilateral creditors. 3. If debt-relief initiatives were to yield the expected results, it must be ensured that gains from debt relief were not simply offset by a reduction in future official development assistance. According to statistics from the Organization for Economic Cooperation and Development, that principle had not always been respected in the past. Donors should consider broadening the scope of the initiative to include a greater number of developing countries, all multilateral credit institutions, and all bilateral and private creditors. He reminded the Council that, despite all debt relief efforts and calls for increased aid, net resource outflows from developing countries had continued in 2004. 4. States had primary responsibility for their own development, the realization of the human rights of their people and the management of additional policy space created by debt relief. Beneficiary States needed to invest the resources derived from debt relief in a manner conducive to the implementation of human rights and the achievement of MDGs. Good governance, accountability and transparency were also crucial conditions for realizing the benefits accruing from debt relief. Country-owned poverty reduction strategy papers were increasingly seen as a basis for debt relief operations; the integration of a human rights perspective was essential in that context. 5. Civil society and independent national human rights institutions should be actively involved in monitoring budget processes in order to ensure that the resources freed under the HIPC and MDRI initiatives were used in accordance with human rights and MDG priorities. 2 GE.09-17372