Poor nations’ debt relief in doubt as IMF reviews conditions
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A third of the poorest countries promised a write-off of their debts by the G8 countries at the Gleneagles summit in June may face new delays in relief, according to campaigners. Oxfam and the network Jubilee USA said that the International Monetary Fund’s executive board would today consider staff advice that six of the 18 countries - Ethiopia, Madagascar, Mauritania, Nicaragua, Senegal and Rwanda - be denied immediate debt relief until they have taken remedial action over their economic and budgetary policies. “The latest manoeuvre by the IMF is an underhand attempt to impose privatisation and further economic liberalisation on countries that have already been promised debt cancellation,” said Max Lawson, policy adviser at Oxfam. He was backed by Bob Geldof, the organiser of this summer’s Live8 concerts, who told the BBC: “If this is a way of trying to impose further conditionality on these countries, we would object strongly to that.” To let the G8 debt initiative fail would be “a catastrophic abrogation of responsibility”, Sir Bob warned. He promised that he would speak out if he felt that the process delivering on Gleneagles pledges was “going pear-shaped”. The debt relief is potentially worth $4.8bn to the countries concerned. An IMF spokeswoman defended the organisation’s approach. To qualify for the 100% debt relief, countries need to show good performance in macroeconomic policies, poverty reduction measures and public expenditure management, she said. “Which countries will benefit will only be decided by the board.” Mark Allen, a senior IMF official, said last week that the “spot check” was not meant to create new hurdles but ensure economic conditions had not become eroded since the countries passed the completion point in the initiative for heavily indebted poor countries. If the IMF board fails to approve immediate relief for all 18 countries, it is unlikely that the World Bank and the African Development Bank, to whom the bulk of the $40bn poor countries’ debts is owed, will forgive their portion of the debts. “It seems unbelievable that the IMF is now boldly undoing the debt deal … agreed at its own annual meetings in September,” said Mr Lawson. |