Cautious welcome to debt relief deal

Business in Africa Online
September 27, 2005

Dakar: Pressure group, Jubilee USA Network has welcomed the weekend’s agreement reached by the IMF and World Bank to implement the G-8 debt relief for 18 poor countries, but raised concerns about unresolved details of the deal.

The US arm of the international movement working for debt cancellation for impoverished nations, insisted in a release, that the G-8 debt agreement “is but a first step towards the amount of debt cancellation needed to end the debt crisis and eradicate global poverty”.

Fourteen African countries are potential beneficiaries of the US$55 billion debt cancellation agreed at the G-8 summit in July, which had been under attack by some governments at the IMF and World Bank.

Jubilee USA Network expressed strong concern about the language included in the International Monetary and Financial Committee (IMFC) communiqué, which appeared to require the 18 “completion point” countries to go through one final test of compliance with IMF and World Bank conditions, including so-called “sound policies”.

Neil Watkins, national co-ordinator of Jubilee USA Network said: “While we welcome the IMF/World Bank agreement on the G-8 deal which will provide 100% debt stock cancellation for 18 countries, we are very concerned about possible additional hurdles and conditions put in the way. We call for debt cancellation – without harmful conditions – for all impoverished countries, including many left behind by the G-8.”

Adam Taylor, co-chair of Jubilee USA Network also said: the “agreement sets a precedent that needs to be expanded and applied to all impoverished countries to meet the life-saving goals”.

Jubilee USA Network further expressed disappointment that the G-8 debt deal once approved, would not be implemented immediately by the World Bank.

“The 18 initially eligible countries will not cease making debt service payments until July 2006,” it said, adding: “This will prevent the Zambian government from providing additional AIDS drugs this year to almost 100 000 infected people, an initiative the government announced in July, in response to the G-8 agreement.”

The debt agreement would cancel 100% of 18 impoverished countries’ debts to the International Monetary Fund (IMF), World Bank, and African Development Bank.

But Jubilee USA said “it excludes other impoverished nations and debt to other significant creditors such as the Inter-American Development Bank, does not address odious and illegitimate debt, and preserves economic conditionality”.

“It also leaves dozens of countries behind,” it added.

The 14 African countries listed to benefit from the debt cancellation are – Benin, Burkina Faso, Ethiopia, Ghana, Madagascar, Mali, Mauritania, Mozambique, Niger, Rwanda, Senegal, Tanzania, Uganda and Zambia.

Jubilee USA is a network of over 70 religious denominations, labour groups, environmental organisations, and community and advocacy groups working for freedom from debt for countries in Africa, Asia, and Latin America.

Categories: Africa, Debt Relief, Odious Debts

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