G8 fails to cancel debts of World's poorest countries by Christopher Swann Jubilee Research 9:16am 10th Jun, 2004   Washington: June 11 2004    The G8 heads of state have disappointed international campaigners by failing to agree a full cancellation of the debt of the world's poorest countries.    Reports earlier this week suggested that the US Treasury and the National Security Council along with Tony Blair, the British prime minister, had been pushing for a total write-off of multilateral debt.    Instead G8 heads of state yesterday agreed to a two year extension of their long running initiative to relieve the debt burden on the world's most impoverished countries, which had been due to expire at the end of the year. This was seen as a bare minimum after a preliminary agreement by G8 finance ministers in New York last month to extend the scheme.    The Highly Indebted Poor Countries (HIPC) initiative was set up eight years ago with the aim of eliminating $100bn (£59.5bn) of the debt of the lowest income countries. So far about a third of the debt has been cancelled. Some estimates suggest HIPC countries still have about $90bn in debt stock.    "At this critical moment, when every minute another African child dies of aids, the global community needs 100 per cent cancellation of multilateral debt without harmful conditions," said Marie Clarke, national co-ordinator of the Jubilee USA Network, a campaign for debt forgiveness. "By failing to seize the opportunity, the G8 has once again chosen baby steps over bold action."    But the final communiqué of the meeting left open the prospect of further progress by calling on G8 finance ministers to engage in further work on debt sustainability before the end of the year.    "It is a great shame that the French and the Germans could not be brought round on this," said Jamie Drummond, executive director of DATA, the debt relief pressure group. "But the communiqué suggests we still have a shot at 100 per cent debt forgiveness."    The 27 countries that have entered the HIPC process continue to pay $700m a year in debt payments to the International Monetary Fund and World Bank. Of the countries eligible for HIPC assistance, 11 have not been allowed to enter the process mostly because they are affected by armed conflict.    Even some countries that have completed the process still have levels of debt that are unsustainable according to the definition used by HIPC - that debt stock should not exceed 150 per cent of annual exports.    11 June 2004    "UN Envoy on AIDS in Africa urges IMF to ease Debt requirements on Zambia", by Stephen Lewis.    Following serious attempts to pay its debts, Zambia will test the recent pledge by the Group of Eight (G-8) rich countries to help poorer nations when it seeks flexibility from the International Monetary Fund (IMF) next week, the United Nations Special Envoy spotlighting HIV/AIDS in Africa said today.    The IMF had extended the gruelling austerity programme it imposed on Zambia to the first quarter of next year instead of ending it in December, even though Zambia’s economic crisis was having a grave impact on the spread of HIV/AIDS in the country, Stephen Lewis said in a statement.    “I appeal to the IMF Board to introduce the tiny quotient of flexibility being requested by the Government of Zambia,” he said, warning that, “To do otherwise is to give continued momentum to the pandemic.”    Mr. Lewis noted that members of the G-8 had yesterday pledged to implement more fully the Highly Indebted Poor Countries (HIPC) Initiative on debt reduction and extend it for another two years. The IMF Board is dominated by the G-8: Canada, France, Germany, Italy, Japan, the Russian Federation, the United Kingdom and the United States.    “There was much self-congratulation amongst G-8 members,” he observed. “As it happens, the decision can now be put to an immediate test; a test of integrity, a test of the ringing G-8 rhetoric.”    Looking towards Monday’s IMF meeting, he said, “Zambia is in desperate straits, and it all revolves around the IMF and HIPC.”    The IMF has failed to grasp the human and economic carnage caused by HIV/AIDS, he said. “The poorest sectors of society: the extended families, the women, the children, the orphans … they have all made incredible sacrifices to keep life going in Zambia in the face of wrenching austerity.”    Zambian incomes have dropped so low that people are barely surviving, he said, noting that the imposed macroeconomic policy had forced the Ministry of Health to stop hiring staff, though fully 20 per cent of the municipal districts have no doctors or nurses.    The average pupil-teacher ratio was approaching 56:1, fatally undermining the quality of the country’s education, Mr. Lewis added. Visit the related web page
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