IMF clears debt relief for 19 countries

Mail & Guardian Online
December 22, 2005

The International Monetary Fund (IMF) on Wednesday agreed to cancel $3.3-billion owed by 19 of the world’s poorest countries, after reports that it was back-tracking on the debt-relief plan sparked an outcry.

The IMF, which had previously said it wanted one last “spot check” of the nations’ economic policies, said its board has now approved them for relief under a global debt-cancellation plan unveiled by the Group of Eight (G8) powers.

“We are on track to deliver 100% debt relief within the coming weeks to 19 of the 20 countries,” IMF spokesperson Thomas Dawson told reporters after a two-hour board meeting chaired by MD Rodrigo Rato.

The G8 powers in July announced their plan to cancel the debts of 18 of the world’s poorest countries owed to the World Bank, the IMF and the African Development Bank.

The IMF added two countries to the G8 list – Cambodia and Tajikistan – but dropped one, Mauritania. Dawson said the IMF hopes to qualify Mauritania in the coming months after reviewing its public spending plans.

He said the $3.3-billion in debts owed by the 19 nations will finally be cancelled once the IMF has the approval of all 43 rich countries that have contributed to an anti-poverty trust set up by the fund.

“So far, we have 37 consents. We’re quite hopeful we’ll get remaining the six in the next few weeks,” Dawson said.

Asked to name the six trust-fund holdouts, he said: “We’re not in the name-and-shame game at this point. We view this as something we need to get done but not, quote unquote, a problem.”

Along with Cambodia and Tajikistan, the 19 countries set to benefit are Benin, Bolivia, Burkina Faso, Ethiopia, Ghana, Guyana, Honduras, Madagascar, Mali, Mozambique, Nicaragua, Niger, Rwanda, Senegal, Tanzania, Uganda and Zambia.

Debt-relief campaigners had caused consternation among some of the intended recipients by warning that the IMF was set to drop six countries from the list because their macroeconomic policies did not conform to fund dictates.

Their warnings prompted a letter to Rato from six United States lawmakers last week expressing deep concern that the IMF was “back-tracking” on the commitment announced to great fanfare by the G8 nations.

Dawson said the IMF board had given in-depth study to each of the 19 recipients, but dismissed the speculation as “simply not true”.

“Life is too short for me to try to be figuring out where inaccurate news stories are coming from,” he said when asked to explain what had got campaigners so alarmed.

Oxfam, one of the activist organisations that complained forcefully against rumours of an IMF U-turn, welcomed Wednesday’s board verdict.

“It’s good that the IMF realised that they couldn’t wriggle out of promised debt cancellation during a closed-door session in Washington DC,” it said. “The IMF must now deliver the funding quickly and without any further delay.”

Categories: Africa, Debt Relief, Odious Debts

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