Listen to Melton report (Real Media)

U.S. Secretary of State Condoleezza Rice says the United States is canceling the multimillion-dollar debt owed to it by Liberia. Speaking at a Liberia donors conference in Washington Tuesday, she said she hopes the move will inspire other nations to do the same. VOA's Marissa Melton reports from Washington.

Spontaneous applause broke out at the conference at World Bank headquarters, when Secretary Rice announced the United States will forgive Liberia's $391-million debt, run up during years of dictatorship and civil strife in the West African nation.

"We will cancel that debt, all of it, under the framework for highly indebted countries," said Condoleezza Rice. "We hope that this will help to relieve Liberia's crippling debt burden, a debt burden that today's leadership and today's people of Liberia do not deserve. We hope that it will enable the government to direct more of its resources toward reconstruction and development."

Rice said the United States will also work closely with other donors, such as the World Bank, the African Development Bank, and the International Monetary Fund, to help resolve Liberia's debt to those international institutions. She said neither the Liberian people nor their current leadership deserved to shoulder the nearly $4 billion of international debt run up under the dictatorships of Samuel Doe and Charles Taylor.

She added that President Bush is asking Congress for an additional $200 million in aid for Liberia for 2007 and 2008.

World Bank President Paul Wolfowitz said the need to resolve Liberia's debt issues is urgent. "The $3.7- billion debt is an unacceptable burden for a country of only three million people. If Liberians fail to see improvements in their lives, the forces of violence could engulf their country once again, Liberia could slide back into chaos that threatens not only its own people but its neighbors, and an historic opportunity would have been lost," he said.

Wolfowitz said the annual income in Liberia is about $120 a year. Liberia's debt is about eight times the size of its yearly output.

Liberian President Ellen Johnson Sirleaf is in Washington this week to attend the donors' conference and meet with President Bush to discuss Liberia's progress during the year she has been in office.

President Johnson Sirleaf is lobbying hard for debt relief, but has cautioned the funds for such a move should not come out of existing aid for Liberia. She says her country is striving to be a success story that will inspire other struggling African nations. "Our overarching aim is to build a new nation that is peaceful, secure, and prosperous, with democratic and accountable governance, based on the rule of law, and with vibrant economic opportunities for all Liberians. We must respond to the deep wounds of the civil war while taking steps to establish the foundation for sustained stability and peace in the future. At the same time we must establish a strong economy with robust job growth and a vibrant public sector," she said.

Ms. Johnson Sirleaf meets with President Bush on Wednesday. She is expected to brief him on the progress of Liberia's reform programs over the past year.