Jubilee USA relieved that IMF board approves debt cancellation for countries promised by G-8

Jubilee USA Network

December 21, 2005

PRESS RELEASE: Following today’s announcement by the International Monetary Fund (IMF) Executive Board, Jubilee USA Network breathed a sigh of relief that 19 impoverished countries will see their debts cancelled in early 2006. Jubilee USA urges the World Bank Board to also approve debt cancellation without delays when it meets in early 2006. However, Jubilee USA reiterated its view that the G-8 debt agreement is but a first step towards conclusively addressing the debt crisis faced by impoverished countries.

Neil Watkins, National Coordinator of Jubilee USA Network said: “We are relieved that today the IMF board reversed a terrible proposal that would have delayed $650 million in debt cancellation for some of the world’s most impoverished nations. Pressure from debt campaigners across the US and the globe and supportive governments led to this important reversal. We welcome the decision. We also serve clear notice that this agreement is only a first step on a long journey and we will continue to pressure world leaders to cancel the debts of all impoverished countries in the months and years ahead.”

The IMF side of the debt cancellation agreed at the G-8 summit in July had been under attack by some governments and IMF staff in recent weeks. The announcement by the IMF today was that 100% debt stock cancellation beginning early 2006 had been approved by the IMF Executive Board. In early December the IMF had released its plan for implementing the G-8 debt deal. The IMF had announced that there would be a final economic test for impoverished countries to meet to receive debt cancellation in 2006. This move threatened access to debt cancellation for six countries, including Ethiopia, Madagascar, Mauritania, Rwanda, Senegal and Nicaragua. According to press reports, Mauritania will not see debt cancellation at this time due to not having a program with the IMF and for what the Fund called a “substantial deterioration” in public expenditure management since the country became eligible for debt cancellation in 2002. The IMF will also cancel the debts of Cambodia and Tajikistan, who were not included in the G-8 deal.

While Jubilee USA welcomes this outcome, given the recent threats to this debt cancellation agreement, the organization reiterated its concern that additional countries will have to implement further harmful economic conditions to qualify for this debt cancellation. The G-8 debt agreement will cancel 100% of 17 impoverished countries’ debts to the International Monetary Fund (IMF), World Bank, and African Development Bank in 2006. The G-8 deal excludes dozens of 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. Jubilee USA will continue its campaign on these issues in 2006 and beyond.

Categories: Africa, Debt Relief, Odious Debts

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