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50 Years Is Enough: U.S. Network for Global Economic Justice

Solidarity Africa Network in Action (Kenya)

FOR IMMEDIATE RELEASE :: December 15, 2005

CONTACTS:

Washington: Hope Chu +1 202 463 2265 / +1 303 667 6613 (mobile) [GMT –5]

Hong Kong: Sameer Dossani +852 6744 2546 [GMT +8]

Nairobi: Njoki Njehu / Soren Ambrose +254 723 229 426 / +254 723 151 541 [GMT +3]

ACTIVISTS CONDEMN IMF FOR BETRAYING G8 PLEDGE ON DEBT CANCELLATION

IMF Board Plans to Deny Cancellation to One-Third of Countries Promised Relief

This week, organizations critical of the International Monetary Fund (IMF) and World Bank have uncovered plans by the IMF to make substantial changes to the debt cancellation plan announced with considerable fanfare at July's G8 Summit in Gleneagles, Scotland. Critics say that these changes will undermine the proposal and retract many of the promises made by the G8.

Multiple reliable sources have confirmed that IMF staff are recommending that the IMF board, at its December 21 meeting, decide that six of the 18 countries scheduled to benefit be denied debt cancellation until unspecified "remedial actions" are implemented and re-approved by the IMF. The countries are: Ethiopia, Madagascar, Mauritania, Nicaragua, Rwanda, and Senegal. This comes days after the IMF announced its plan for implementation of the G8 debt cancellation deal.

"The IMF wants to insure that no country getting cancellation will be without an in-force IMF program," said Soren Ambrose, policy analyst with Solidarity Africa Network in Action, "Four of the six countries (Ethiopia, Madagascar, Mauritania, and Nicaragua) for which cancellation is in jeopardy either have no current IMF program or have one which will expire by the end of 2005. The main function of the debt system is to maintain control over countries' economic policy so it makes sense that the IMF would make sure that no country finds a way to escape IMF oversight."

In addition, IMF staff propose to add macroeconomic criteria to the debt cancellation plan, which previously had only been linked to the controversial Heavily Indebted Poor Countries (HIPC) initiative. If adopted, the World Bank and the African Development Bank, also implicated in the deal, are likely to follow the IMF's lead. IMF and World Bank critics expressed concern that the institutions would extend policies that have led to economic decline and increased poverty in developing countries.

"What kind of game does the IMF think it's playing?" asked Sameer Dossani, Executive Director of the 50 Years Is Enough Network, "They've taken an approved proposal which allowed for no delays or new conditions on the countries slated to have their debts cancelled, and devised a new set of conditions and potential delays. And now they're going to announce an indefinite postponement for one-third of the countries that are desperately in need of cancellation!"

"After decades during which dozens of countries struggled under insurmountable debts contracted by dictators and corrupt officials for questionable purposes, the wealthiest countries have finally acknowledged that their debt system is unsustainable, and that 100% multilateral debt cancellation is absolutely necessary to reduce poverty. Now, all too typically, the IMF - largely controlled by the same G8 that came up with the plan - is trying to quietly reverse that landmark decision," said Njoki Njehu, Executive Director of Solidarity Africa Network in Action in Nairobi, Kenya.

The 50 Years Is Enough Network and the Solidarity Africa Network in Action yesterday issued an urgent alert asking activists around the world to contact their Finance Ministries and board representatives at the IMF in advance of the December 21 meeting to demand that the promises made by the G8 be kept and that debt cancellation go through fully and immediately.

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For further analysis: http://www.50years.org/cms/updates/story/315