We Can't Cancel Debt, or We'll Have to Close

From: Per I. Mathisen (Per.Inge.Mathisen@idi.ntnu.no)
Date: Tue Feb 27 2001 - 10:08:59 MET

  • Next message: Per I. Mathisen: "IMF spat could cost Indonesia more than $400 million"

    En interessant artikkel om IMF/Verdensbanken. Callisto Madavo, World Bank
    vice president for Africa: "It is the shareholder perspective that is the
    bottom line"...

    Mvh,
    Per

    ---------- Forwarded message ----------
    Date: Mon, 26 Feb 2001 11:10:15 -0500 (EST)
    From: Robert Weissman <rob@milan.essential.org>
    To: stop-imf@venice.essential.org
    Subject: [stop-imf] WB: We Can't Cancel Debt, or We'll Have to Close

    February 24, 2001

    Leaders Can't Cancel Nation's Debt

    By THE ASSOCIATED PRESS

    Filed at 1:12 a.m. ET

    DAR ES SALAAM, Tanzania (AP) -- The heads of the World Bank and
    International Monetary Fund told 12 African leaders it would be
    impossible to cancel the entire debt of the world's poorest nations,
    as many have asked.

    IMF director Horst Kohler and World Bank President James Wolfensohn
    said total debt would leave the two institutions cash-strapped and
    unable to provide the new loans to developing nations, said G.E.
    Gondwe, director of the IMF's Africa department.

    ``You would look at the issue of closing the bank,'' Gondwe told
    reporters Friday at the beginning of a two-day IMF-World Bank summit
    to discuss how their agencies can help countries alleviate seemingly
    never-ending poverty.

    Callisto Madavo, World Bank vice president for Africa, said the
    interests of the bank's shareholders ruled out debt cancellation.

    ``It is the shareholder perspective that is the bottom line,'' he said.

    The World Bank, which provides nearly $16 billion in loans each year,
    is owned by more than 180 member countries.

    Rwanda, Uganda, Mozambique and Tanzania, which sent representatives
    to the 12-nation summit, are among 18 sub-Saharan nations that
    qualified for partial debt relief last year as long as they met
    certain conditions set by the lending institutions.

    But most African governments say the continent will only develop if
    the billions of dollars of debt the countries have accumulated in
    their post-independence years is unconditionally canceled.

    Some of the poorest countries in sub-Saharan Africa spend 25 percent
    of their revenues servicing debt.

    African Forum and Network on Debt and Development, a Zimbabwe-based
    group, said African countries owed the IMF and World Bank $41.6
    billion.

    The international bankers have said they are using the summit, the
    penultimate leg of a tour to west and east Africa, to listen and
    learn from African leaders, many of whom have vociferously criticized
    the institutions' policies in the past.

    Other issues discussed at the summit included how Africa's economic
    growth could catch up with the rest of the world, as well as how to
    fight the AIDS epidemic -- perhaps the continent's biggest crisis.

    Nearly 24 million Africans are infected with the HIV/AIDS virus.

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