Geoffrey Lamb
July 6, 2005

A presentation based on a leaked report by World Bank senior officials Geoffrey Lamb and Danny Leipziger claiming the G-8 debt relief proposal for poor countries, most of which are African, lacks sufficient compensation to the World Bank’s low-interest lending arm most affected by the debt relief plan, has now been posted [anotherPDF here] to the Odious Debts Web site.

The report highlighted in the August 7 edition of Odious Debts Online said the deal lacked any specifics for future funding for the World Bank’s International Development Association (IDA) lending facility, which raised doubts as to whether there would be proper compensation for the institution to distinguish it from the debtors.

Meanwhile, leaked International Monetary Fund (IMF) documents have revealed plans by some European representatives at the IMF to weaken the debt cancellation deal proposed by the G-8 governments, the Jubilee Debt Campaign reports [PDF] .

The Belgian Director at the IMF, Willy Kiekens, suggested in a statement that the IMF should not give “full, irrevocable and unconditional debt relief” when countries complete the Heavily Indebted Poor Countries (HIPC) program. Instead, he suggested the debts should not be cancelled at all, which flies “in the face of what campaigners had been calling for and what the G8 had promised to indebted countries,” Jubilee said in response. Mr. Kiekens suggested that the countries concerned should continue to service their debts, but be given extra grants from the IMF equal to the amount of their debt service.

According to the Jubilee Debt Campaign, this would enable the IMF to “strengthen its hold and reinforce its interference over the policies of poor countries” by:

• Giving grants only “on condition of the implementation of adequate policies.” The Jubilee campaign notes that “this is not only undemocratic, but past experience has shown that the policies considered ‘adequate’ by the IMF have been extremely damaging to poor countries.”
• Threatening poor countries that if their policies go “off track” then the IMF “would have to serve the debt.”

However, the leaked documents also show that the three directors representing sub-Saharan Africa opposed the suggestions, pointing out that countries which complete HIPC have already complied with many conditions, and that the G-8 proposal implied irrevocable cancellation, without further conditions. They also highlight the fact that further conditions would “delay the benefits” of any debt relief or cancellation.
www.odiousdebts.org/odiousdebts/images/StatementbyWillyKiekens.pdf [anotherPDF here]