BRITAIN'S Chancellor of the Exchequer, Gordon Brown, has warned poor countries that his proposals to ease their debt burden by 2000 will only work if the countries undergo economic reform. Mr Brown said last night the proposals had won an encouraging response from Britain's partners in the Group of Seven. 'My colleagues understand the seriousness with which we are planning to pursue this initiative in the next few months,' he said. He said there was an 'agreement on the part of our colleagues that they do want to see progress and this will form a major part of our discussions' in the run-up to the G7's Birmingham summit next year. The Mauritius Mandate, drawn up by Mr Brown and supported by Commonwealth finance ministers, aims to reduce the programme for easing the debt burden of highly indebted poor countries like Laos, Burma and Vietnam from six years to three. 'This is a mandate that will have achieved change by the millennium,' he said yesterday. It calls for greater flexibility in the application of the debt-relief initiative - which currently costs the International Monetary Fund, World Bank and a number of Western donors US$7.4 billion - and seeks to enable all countries in the 'highly indebted poor' category to have embarked on the process of securing a sustainable exit from debt by 2000. The mandate also calls on the World Bank to look at the position of severely indebted countries whose debts are owed primarily to multilateral institutions 'so that they have as much chance as others of early and full debt relief'. But Mr Brown warned the offer of help - the UK will also write-off bilateral debt owed to it by low-income countries - was not unconditional. 'The objective for the year 2000 can only be met if these countries embark on the necessary policy of reform,' he said. 'One of the points we make very strongly is that it is not just about the openness of procedures so it can be seen very clearly where the money is going, but also that productive expenditure rather than unproductive expenditure ought to be financed.' World Bank president James Wolfensohn on Friday called on Mr Brown to put his money where his mouth was, after he accused the World Bank of making slow progress on debt relief to poor countries. Mr Brown acknowledged that eventually the sale of International Monetary Fund gold holdings would have to take place if poor countries' debts were to be erased. 'The case for gold sales remains but it is also possible in the shorter term to make progress by the year 2000 by untying these conditions,' he said.