April 1, 2005
Possible actions in the report’s Annex 9 are
closer to the actual proposals being debated by G7 finance ministers:
some additional debt service relief until 2015 and reinforcement of IMF
and World Bank conditionality for African countries.
A recommendation calling for 100 per cent cancellation of sub-Saharan
Africa’s multilateral debt by British Prime Minister Tony Blair’s
Commission for Africa last month, would only provide some additional
debt service relief until 2015 while reinforcing International Monetary
Fund and World Bank conditionality for African countries, claim social
In their analysis of the Commission’s final report on Africa, KAIROS
– a social justice organization of 11 Canadian churches and church
agencies – says the possible actions described in Annex 9 of the
Commission’s report “are closer to the actual proposals” being debated
by the Group of Seven industrialized nations.
Although, the Commission’s general call for “100 per cent debt
cancellation as soon as possible” has been widely cited by NGOs as a
“positive breakthrough,” it only would be “if it were
ever implemented,” said KAIROS.
“However, there is no timeline attached to the ‘as soon as possible’
and there are no details concerning which countries might have debts
cancelled, which kinds of debt would be covered and how it could be
achieved,” they said.
The KAIROS report also looks at the Commission’s second and third
recommendations. It found that the Commission backed away from the
universal promise of its first recommendation of 100 per cent relief
because it only applied to “low-income countries” and “up to 100 per cent” debt cancellation, where it is necessary to achieve the MDGs (Millennium Development Goals).”
A third recommendation that would put in place financing to provide
100 per cent multilateral debt service cancellation builds on
“proposals already on the table at the G7 Finance Ministers’ meetings.”
“It would apply only to ‘multilateral debt service’; only be available
to countries needing more debt relief to achieve MDGs and only last
until 2015 ‘to avoid the risk of new loans being taken with the
expectation that they subsequently will be written off.'”
It is only the discussion of “Possible Actions for Further Debt
Relief” contained in Annex 9 of the Commission’s report that provides
a “clearer picture” of what is being put on the table, said KAIROS.
“It is important to note that far from freeing these countries from
IMF and World Bank conditionality, these proposals would reinforce it
by dangling the carrot of having some debt service payments paid or
rebated if the countries adhere to IFI conditionality long enough to
meet all the requirements” of the Heavily Indebted Poor Countries
Although the Commission report refers to “strong resentment in many
parts of Africa over . . . debt obligations . . . incurred by
unelected leaders supported by the very countries [now collecting
debt] service,” and acknowledges that many Africans feel these
countries “are now using debt as a lever to dictate policy to the
continent,” it does not address the illegitimate origin of the debts.
“There is no discussion of how many debts were illegitimate from the
very beginning. Nor is there a discussion of writing off ‘odious
debts’ even in the discussion of stolen assets (section 4.5.3),
where it is acknowledged that these stolen assets are equivalent to
half the continent’s external debts. Nor is there any mention of
apartheid debts,” KAIROS noted.
Categories: Africa, Essays and Reports, Multilateral Development Banks, Odious Debts
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