Debt Relief

Jubilee USA network lukewarm to British debt cancellation plan

“We laud Brown to his commitment to 100% debt cancellation. But the truth is his call to finance that cancellation through G7 government appropriations threatens to scuttle a deal on debt for October 1st.”

There’s a new proposal for debt cancellation for poor nations. Britain’s Chancellor of the Exchequer, Gordon Brown, says his country would unilaterally write off their debts to the World Bank. In turn, it would make payments on the poor nations’ behalf to the World Bank and African Development Bank. The proposal comes ahead of Friday’s meeting of G7 finance ministers in Washington, DC. But it may conflict with a US debt cancellation plan.

Marie Clarke is the national coordinator for the Jubilee USA Network, an organization that’s long called for total debt cancellation. She spoke to reporter Joe De Capua about the British proposal.

She says, “We laud Brown to his commitment to 100% debt cancellation. But the truth is his call to finance that cancellation through G7 government appropriations threatens to scuttle a deal on debt for October 1st. Because several of the G7 nations have been very clear that they cannot support 100% debt cancellation if they need to contribute more than they already have and that they already do on a regular basis to the IMF and the World Bank.”

Jubilee is calling on all G7 nations to negotiate and reach a compromise on total debt cancellation. Ms. Clarke says financing for the debt cancellation can come though gold.

She says, “The IMF has a phenomenal amount of gold, over 100 million ounces that has been outrageously undervalued at about $40.00 an ounce, as opposed to the market value, which is closer to $400 an ounce. And that simple and very responsible revaluation and slow sale in order to ensure that we don’t disrupt the market could actually pay for both the IMF’s bill as well as the World Bank’s.”

As for the US plan, the Jubilee official says, “As far as we understand it, the IMF and the World Bank would actually pay for all of the debt cancellation from their own resources. On the IMF side they’d use gold in part, but they’d also draw down the Poverty Reduction and Growth Facility Fund and use that to pay for some piece of it . . . on the World Bank side in the US proposal it would come from their balance of payments reserves.”

Voice of America, September 27, 2004

Categories: Debt Relief, Odious Debts

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