A call for Zimbabwe to stop paying debts

A debt forgiveness advocacy coalition says that debt repayments are preventing Zimbabwe's women from getting essential health care. The coalition called ZIMCODD says that Zimbabwe should stop getting loans from the big international lending institutions and stop paying of the loans they already made.

From the IPS, writer Stanley Kwenda tells us more about how debt affects health in Zimbabwe.

Indications are that many Zimbabwean women opt to give birth at home, with some children being born HIV positive because their mothers cannot afford the maternity fees or the fees charged at hospitals and clinics for the prevention of mother to child transmission of HIV, according to the Zimbabwe Coalition on Debt and Development (ZIMCODD).

ZIMCODD is a coalition of organisations working on social and economic justice issues in the politically beleaguered southern African state. Its calculation of Zimbabwe’s debt as being 8,3 billion dollars includes interest costs.

Hospitals and clinics in Zimbabwe’s urban areas charge 250 and 50 dollars respectively in maternity fees. Delivering a baby at state hospitals with the help of a professional midwife costs 173 dollars.

Given that even civil servants mostly earn less than 200 dollars a month, the charges put health services out of reach for most citizens.

Says Tariro Chikwanha: "We cannot get AIDS drugs or drugs for opportunistic infections because they are too expensive." Even the tests to determine whether an HIV-positive person should go on to antiretroviral drugs are out of reach, costing 10 dollars each at state hospitals.

Chikwanha, who has lived with HIV for 13 years, is increasingly worried about the inaccessibility of health services in Zimbabwe. She founded DREAMS, an organisation that works with youths who are living with HIV and AIDS or are affected by it.

"Because of the cost most people give up and wait for death at home," explains Chikwanha.

She blames the country’s unsustainable debts levels for the dearth in state funds for public healthcare. The government has a so-called "social dimension fund" which is supposed to take care of these needs but it is virtually non-existent.

"Government debts are killing us as women. The government should stop getting more loans," Chikwanha told IPS. "We have enough money to look after ourselves. We have diamonds, platinum and gold. They should sell these minerals and get us money to live a better life."

France urged to pay back Haiti

A letter sent to France President Nicolas Sarkozy urges the country to repay a 200 year old debt. When Haiti became independent from France they imposed a payment on Haiti which is now valued at 22 billion dollars. France imposed the payment because they felt they would lose money because their Haitian slaves were now free and would no longer work for France. Haiti was still making payments on this debt in up until 1947.

From Al Jazeera, we find out more about the letter.

Campaigners, including Noam Chomsky, the US linguist, and Naomi Klein, the Canadian author, described the debt as "patently illegitimate ... and illegal".

"The 'independence debt', which is today valued at over 17bn euros illegitimately forced a people who had won their independence in a successful slave revolt, to pay again for the freedom," the letter, published in Britain's Guardian and France's Liberation on Sunday, said.

Haiti launched a lawsuit in 2004 to recover the money, but it was abandoned after France backed the overthrow of Haiti's government.

The letter said such actions were "inappropriate responses to a demand that is morally, economically, and legally unassailable".

"In light of the urgent financial need in the country in the wake of the devastating earthquake of January 12, 2010, we urge you to pay Haiti, the world's first black republic, the restitution it is due," it said.

Haiti six months later, a round-up

Six months have passed since the Haitian earthquake. This may be a good thing for the people of Haiti who are still sleeping in tents. This occasion will force the western media to turn their attention back to the impoverished country. At least three items have caught our eyes this afternoon.

First in our round-up, a video from ABC News. Reporter David Muir talks to Hans van Dillen of Medecins Sans Frontieres on the progress in Haiti.



Next from FRI, writer Amanda Morrow takes a look at some of the promised, but as of yet undelivered Haitian aid.

Six months after an earthquake killed 250,000 people in Haiti, an estimated 1.5 million people remain homeless, the government faces criticism for not doing enough and much promised foreign aid has not been delivered.

Local people complain that they have seen little progress since the 12 January quake levelled 60 per cent of buildings in the capital, Port-au-Prince. Earlier this year there were angry protests.

Thousands of families throughout the country live in plastic tents under sweltering temperatures, and are at risk of crime, exploitation and abuse.

International aid donors have been criticised for not following through on pledges, with a US Senate report last month finding that of the 5.3 billion dollars (4.2 billion euros) promised, only two per cent has been received.

The UN World Food Program (WFP) says that its emergency operation has a shortfall of more than $200 million (160 million euros).

Finally the blog at the ONE Organization updates Haiti's debt situation. Writer Brie O'keefe details all of the debt cancellations since the earthquake, and tells us who else should get with the program.

That leaves Haiti’s only outstanding debts at the moment being held by Taiwan and the IMF. Taiwan is difficult as many of these debts are held by commercial creditors who are unwilling to forgive them. The IMF, however, is currently working on a process to cancel Haiti’s remaining debts, though this hasn’t happened as yet.

Global Witness asks for transparency from Congo Republic to add to debt relief

The anti-corruption advocate Global Witness says another step needs to be taken to make the recent debt forgiveness to the Republic of Congo effective. Last week the International Monetary Fund and the World Bank decided to forgive 12.3 billion dollars of the Congo's debt. Global Witness conducts investigations to expose corruption that hurts natural resources and international trade.

Last week’s long-awaited decision by the World Bank and International Monetary Fund to forgive $12.3 billion of the Democratic Republic of Congo’s debt is to be welcomed, but a raft of transparency reforms are urgently needed in the mining and oil sectors if the country is to truly benefit from the decision, said campaign group Global Witness today.

The country has vast natural resource wealth – timber, minerals and oil – but so far Congolese people have not benefited because of widespread corruption and mismanagement over decades.

“Congo being granted debt relief on the 50th anniversary of independence is a unique chance to break with the destructive behaviour of the past,” said Lizzie Parsons, campaigner for Global Witness. “However, we have seen recent worrying developments in the natural resource sector which go against the progress of debt relief being granted.”

Within Congo’s lucrative mining and oil sectors, various shadowy deals have been signed in recent months without any public scrutiny. The ownership of companies gaining rights to important resources is kept hidden behind offshore companies. The transfer of oil and mining rights without clear international bidding raises questions about respect for due process.

A mysterious British Virgin Islands-registered company, Highwind Properties Ltd., was awarded the rights to the Katanga-based copper mine Kingamyambo Musonoi Tailings in January 2010. It is unclear on what basis the allocation of rights to Highwinds was made. The mine had previously belonged to Canadian miner First Quantum Minerals Ltd., which invested $750 million in the project before it was forcibly shut by the government in September 2009 after a review of dozens of mining contracts. Earlier in the year, First Quantum had paid $55 million in tax – the largest tax payment ever made to the government according to the company’s chief executive.

Two previously unknown oil companies, Caprikat Ltd. and Foxwhelp Ltd., both also registered in the British Virgin Islands, were granted rights to two untapped oil blocks in northeastern Congo by a June presidential decree. It is unclear on what basis the two companies were selected. The decision came despite the government already awarding the blocks multiple times to other companies, with signature bonuses totalling $3 million, though Presidential decrees ratifying the earlier awarding of oil blocks were never made. A nephew of South African President Jacob Zuma is widely reported to own Caprikat and Foxwhelp.

“At present there is no way for Congolese citizens to know whether deals being done by the government are in the country’s best interest. The government should make it absolutely clear who is involved in the latest deals and on what basis they were selected as partners,” said Parsons. “The ability for citizens to understand and scrutinize the agreements is vital for the country to turn the page on its past.”

Congo Republic relieved of 90 percent of its debt

This week, the Democratic Republic of Congo is celebrating it's fiftieth anniversary of independence. The DRC has also just received some good news from the big lending institutions. The World Bank and the International Monetary Fund have agreed to relieve the DRC of 90% of it's debt amounting to 12.3 billion dollars.

From the BBC, we learn more about this new reason to celebrate in the Congo.

DR Congo currently pays around $300m (£198m) every year in debt repayments.

The African country has been hard hit by violence and bad governance.

An estimated 5m people died in what was dubbed "Africa's world war" between 1998 and 2003, and areas of the country remain in conflict.

Despite having a multitude of valuable minerals, most of its citizens are poor.
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The country itself is among the group known by the IMF and World Bank as the Highly Indebted Poor Countries.
Continue reading the main story map DR Congo: Celebrating 50 years of chaos

The debt relief plan comes under their initiative to help these countries escape their debts in return for economic and government reforms.

The new debt relief could see as much as 90% of DR Congo's external debt erased, the BBC's Thomas Fessy reports from Kinshasa.

Debt relief plan announced for Liberia

A new plan to give debt relief to Liberia was announced yesterday. The World Bank and the International Monetary Fund launched a plan to relieve Liberia of 4.6 billion dollars of debt.

From the AFP article that we found at South Africa's News 24 we read more on the joint statement on the relief, and some reaction from OXFAM.

In a joint statement, the boards of the International Monetary Fund and the World Bank said the impoverished African nation, which is only just recovering from the ravages of a protracted civil war, "has successfully implemented its poverty-reduction strategy and maintained a stable macroeconomic environment, despite the global economic crisis".

They said that Liberia's course toward economic and social stability would be eased by the debt relief.

"We welcome the concerted efforts made by Liberia to obtain this debt relief. This will help attract new investment and generate much needed opportunities," Chris Lane, IMF mission chief for Liberia, said in the statement.
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"Debt relief for Liberia is a step in the right direction, as it will open up fiscal space for spending on desperately needed social services," said Oxfam policy advisor Pamela Gomez.

"Oxfam along with our partners in Liberia recently conducted a research study which found that Liberia is facing a public health crisis - three out of four people have no access to safe water, and lack of water and sanitation cause 18% of deaths in that country," she said.

So "the Liberian government itself is going to have to act fast to budget more for water and sanitation to halt the scandal of preventable disease and deaths", Gomez said.

World Bank cancels Haitian debt

The World Bank has taken more of Haiti's debt off of the books as repayments were made by other countries. 13 different countries contributed to pay 36 million dollars of Haitian debt to the bank. Haiti is no longer indebted to the World Bank with this cancellation.

From Reuters, we receive more details on the cancellation and a quote from Bank president Robert Zoellick.

Canceling the debt will free up funds -- which would have been spent on servicing the IDA debt -- for rebuilding after Haiti's devastating Jan. 12 earthquake.

The Bank said funding to write off the debt was received from Belgium, Canada, Finland, France, Germany, Ireland, Italy, Japan, the Netherlands, Norway, Spain, Sweden and Switzerland.

"Relieving Haiti's remaining debt is part of our effort to pursue every avenue to help Haiti's reconstruction efforts," World Bank President Robert Zoellick said.

IADB forgives Haiti's past debts

Last night the Inter-American Development Bank announced that they world forgive Haiti all of it's past debts. The IADB held $479 million of the earthquake ravaged country's debt.

From this Associated Press article that we found at Forbes, we read more about the announcement.

Bank President Luis Alberto Moreno said the bank's board of governors voted to forgive the debt and will offer $2 billion in financing to the Caribbean nation over the next 10 years.

"This commitment is good news for all Haitians, and will help heal the wounds caused by the earthquake," Moreno said at the inauguration of the bank's annual meeting in the Caribbean coast resort of Cancun.

The IADB debt was the biggest single chunk of the $1.2 billion Haiti owed as of late January, according to figures of the International Monetary Fund.

US Congress moves on Haitian debt relief

Haitian President Rene Preval will be in Washington DC tomorrow to meet with President Barack Obama. Ahead of the meeting, the U.S. Congress is moving to get the big lending banks to forgive all of Haiti's debt.

The Inter-American Development Bank actually holds the most Haitian debt out of the big lending organizations. The IADB holds 420 million dollars, followed by The International Monetary Fund with 165 million.

Haiti will need every single dollar it's been given to rebuild the country instead of paying off debts. Most of those loans were made to Haiti for prior disaster recovery efforts from recent floods and hurricanes.

From the IPS, writer Jim Lobe reports on the debt relief efforts.

The Senate Friday approved a resolution urging the U.S. representative at major international lending institutions to push for the cancellation of all of Haiti's outstanding multilateral debt – about 700 million dollars – or about two-thirds of the country's total outstanding debt of some 1.2 billion dollars.

The resolution also calls for Washington and other donors to provide significant assistance to help the country recover and rebuild from the earthquake, in which more than 200,000 people are estimated to have died.

In early projections based on other recent natural catastrophes released last month, the Inter-American Development Bank (IDB) estimated that reconstruction costs in Haiti are likely to range from eight billion dollars to 14 billion dollars. The same study predicted that the earthquake "is likely to be the most destructive natural disaster in modern times, when viewed in relations to the size of Haiti's population and its economy."
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Meanwhile, the House of Representatives is planning to vote on a similar resolution during Preval's visit here Wednesday morning, according to Congressional staff members.

The House's subcommittee on International Monetary Policy and Trade approved the pending measure by voice vote last Thursday, and the House leadership has put it on a fast track for a floor vote, which is expected to be bipartisan.
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Preval's visit, his first here since the devastating Jan. 12 earthquake, comes as U.S. troops have accelerated their withdrawal from the country where they helped deliver humanitarian assistance and maintain security, along with some 10,000 U.N. peacekeepers who were already stationed in Haiti and will remain there.

At their peak in early February, more than 16,000 U.S. soldiers and sailors were deployed in and around Haiti. "Our mission is largely accomplished," said Gen. Douglas Fraser in a press call Monday. He said less than 8,000 troops will remain in the area – most of them off-shore – by the end of this week.

Wednesday's White House meeting is designed in major part to demonstrate continued U.S. interest in the recovery of what was already, before the quake, Latin America's poorest country.

US Lawmakers call for Haitian debt forgiveness

97 US lawmakers signed a letter to ask the G-7 to forgive Haiti's debt. The finance ministers of G-7 countries are about to gather in Canada. The letter was sent to ahead of the meetings to hopefully force Haiti debt forgiveness onto the agenda.

California Democratic Congresswoman Maxine Waters and Florida Republican Ileana Ros-Lehtinen led the letter writing campaign. The two are also involved in legislation efforts on Haiti's debt along with Connecticut Democratic Senator Christopher Dodd and Indiana Republican Richard Lugar.

From IPS, reporter Jim Lobe talks about the letter's request and details the amount of Haitian debt. Debt forgiveness organization Jubille USA also wrote a blog post about the effort.

On the eve of Friday's meeting by G7 finance ministers in Iqaluit, Canada, 94 members of the House of Representatives sent a letter to Treasury Secretary Timothy Geithner that also called for "the provision of assistance to Haiti in the form of grants so that the country does not accumulate additional debts."

That call was echoed by a several non-governmental organisations (NGOs), including Oxfam, Jubilee USA, and Avaaz, which said they plan to deliver hundreds of thousands of individual signatures on petitions appealing for debt cancellation from across the world to this weekend's ministerial meeting.
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The push on the G7, which, in addition to the U.S., includes Canada, France, Britain, Germany, Italy, Japan, and the European Union (EU), comes as Haiti struggles to clean up and begin recovering from the cataclysmic Jan. 12 earthquake that is estimated to have killed at least 150,000 people, and possibly tens of thousands more.

In addition to damaging much of the country's infrastructure, the quake, the most lethal in the Americas' recorded history, also rendered nearly one million of its nearly 10 million people homeless, creating unprecedented challenges for the government of President Rene Preval, humanitarian NGOs and foreign aid groups, and more than 10,000 U.S. troops and U.N. peacekeepers.
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Last June, 1.2 billion dollars in Haiti's external debt, including that owed to the Washington-based International Monetary Fund (IMF), World Bank, and Inter-American Development Bank (IDB), was cancelled after the Preval government completed a three-year Heavily Indebted Poor Countries (HIPC) programme.

Over half of that debt had been incurred by Haiti's dictatorships, notably the Duvalier dynasty that ruled the country from 1957 to 1986.

But the cancellation covered debt incurred by Haiti only through 2004. In the last five years, the country has received new loans – some of them to help it recover from the floods and other hurricane damage – totalling another 1.05 billion dollars.

Some two-thirds of that total is owed to multilateral agencies, including some 447 million dollars to the IDB, 39 million dollars to the World Bank, and some 165 million dollars to the IMF.

The remainder is bilateral debt, most of it owed to Taiwan (92 million dollars) and Venezuela (167 million dollars). Haiti also owes the Rome-based International Fund for Agricultural Development (IFAD) another 58 million dollars.

While the terms of the multilateral loans are concessional – most of them carry only nominal interest rates and can be repaid over as much as 50 years - servicing of the IMF and IDB loans by themselves alone would normally require Haiti to pay more than 100 million dollars over the next decade, a sum that it can ill afford in the wake of last month's earthquake, according to the NGOs.

World Bank waives Haiti's debt payments

Actually some good news today, we hope that there is more to come on this issue.

The World Bank issued a statement saying that they waive all payments on Haiti's debt for the next five years. The Bank points out they only represent 4 percent of all of Haiti's external debt, so many more lenders and countries will need to follow suit.

From the World Bank's press release comes details of the debt forgiveness.

The World Bank fully supports debt relief for Haiti. In June 2009, the World Bank, along with the IMF and other donors, granted Haiti $1.2 billion in debt relief through the Heavily Indebted Poor Countries initiative and the Multilateral Debt Relief Initiative. Since 2005, the World Bank’s financial support for Haiti ($363 million) has been carried out through grants. This does not include the $100 million in grants announced on January 13, 2010, in response to the earthquake.

Currently, Haiti's debt to the World Bank, which is interest-free, is about $38 million—about 4% of Haiti’s total external debt. Due to the crisis caused by the earthquake, we are waiving any payments on this debt for the next five years and at the same time we are working to find a way forward to cancel the remaining debt.

A history of Haiti's debt

A very good commentary from The Nation asks the question: What is Haiti Owed? Writer Richard Kim goes beyond talking about the rescue or even the restoration of Haiti. Instead, Kim talks about what measures do international banks and governments need to take to make Haiti a more stable nation, and one that is on the same economic playing field as other countries.

Kim begins with some history as to how Haiti got into it's miserable state in the first place. With folklore and biased opinions being heard last week we made that history a focus on for our snippet. Kim goes into some possible solutions for Haiti to finish his piece, and it is well worth reading the whole commentary.

Haiti's vulnerability to natural disasters, its food shortages, poverty, deforestation and lack of infrastructure, are not accidental. To say that it is the poorest nation in the Western hemisphere is to miss the point; Haiti was made poor--by France, the United States, Great Britain, other Western powers and by the IMF and the World Bank.

Now, in its attempts to help Haiti, the IMF is pursuing the same kinds of policies that made Haiti a geography of precariousness even before the quake. To great fanfare, the IMF announced a new $100 million loan to Haiti on Thursday. In one crucial way, the loan is a good thing; Haiti is in dire straits and needs a massive cash infusion. But the new loan was made through the IMF's extended credit facility, to which Haiti already has $165 million in debt. Debt relief activists tell me that these loans came with conditions, including raising prices for electricity, refusing pay increases to all public employees except those making minimum wage and keeping inflation low. They say that the new loans would impose these same conditions. In other words, in the face of this latest tragedy, the IMF is still using crisis and debt as leverage to compel neoliberal reforms.

For Haiti, this is history repeated. As historians have documented, the impoverishment of Haiti began in the earliest decades of its independence, when Haiti's slaves and free gens de couleur rallied to liberate the country from the French in 1804. But by 1825, Haiti was living under a new kind of bondage--external debt. In order to keep the French and other Western powers from enforcing an embargo, it agreed to pay 150 million francs in reparations to French slave owners (yes, that's right, freed slaves were forced to compensate their former masters for their liberty). In order to do that, they borrowed millions from French banks and then from the US and Germany. As Alex von Tunzelmann pointed out, "by 1900, it [Haiti] was spending 80 percent of its national budget on repayments."

It took Haiti 122 years, but in 1947 the nation paid off about 60 percent, or 90 million francs, of this debt (it was able to negotiate a reduction in 1838). In 2003, then-President Aristide called on France to pay restitution for this sum--valued in 2003 dollars at over $21 billion. A few months later, he was ousted in a coup d'etat; he claims he left the country under armed pressure from the US.

Republic of Congo eligible for debt relief from IMF

The Democratic Republic of Congo has finally received a loan from the International Monetary Fund. The loan will also make the DRC eligible for debt relief from the IMF.

What stood in the way of receiving the loan was the Congo's plans to do infrastructure for copper deals with China. The IMF said those deals would only put Congo deeper in debt. Meanwhile, the DRC has been negotiating with India on similar trades which the IMF said they would monitor.

From Reuters, writer Lesley Wroughton describes the loan further and the negotiations that led to it.

The debt relief, which will cut the DRC's overall stock of public and publicly-guaranteed debt, will be reduced to about $4 billion from $13 billion, a senior IMF official said.

At Friday's dollar-SDR exchange rate, the loan is worth about $551.45 million.

The IMF-backed economic program aims to generate economic growth, reduce inflation to single digits, strengthen public financial management and accelerate reforms in the DRC, which is emerging from a 1998-2003 war, the Fund said.

The loan was approved after the IMF pressured the DRC to renegotiate an infrastructure-for-minerals agreement with China, which the Fund argued would have increased Congo's debt burden.

The size of the deal was cut in August to $6 billion from an original plan of $9 billion, and Congolese government guarantees connected with the commercial mining aspect of the agreement were taken off the table.

The Fund delayed approval of the loan and the debt relief pending a revision of the China deal.

IMF mission chief to DRC, Brian Ames, said without debt relief the country "is not sustainable from a fiscal or from a debt perspective, China notwithstanding."

Vultures of third world debt

A coalition of 50 advocacy groups are calling on the U.S. Congress to stop the practices of Vulture Funds. The funds buy countries debt at pennies on the dollar but charge them huge interest on the purchases. Once the payments are late, the funds sue the governments for what they feel is owed to them.

From Afrik.com, writer Muritala Bakare gives us a further description of the vulture funds practice.

According to the group of fifty advocacy institutions which discovered the “unscrupulous loan transfer” called VULTURE funds, Highly Indebted Countries’ debt are purchased at pennies to dollar and the financial firms "aggressively pursue their claims through the seizure of assets, litigation and political pressure, seeking repayments that are far in excess of the amount that they paid for the debt," the group say.

For instance, FG Hemisphere Fund based in the United States was successful in its court case against the Democratic Republic of Congo for US$105million for a US$30million loan borrowed in 1980 by the government of Mobutu Sese Seko. The DRC was ordered to pay nearly US$80,000 a week by a US judge.

"The DRC is being forced to siphon these desperately needed resources from initiatives like healthcare, education, combating HIV/AIDS, and access to clean water to its impoverished citizens to pay off wealthy corporations such as FG Hemisphere," said Melinda St. Louis, deputy director of the Jubilee USA Network.

"This runs totally counter to the progress made by the U.S. and the international community on debt cancellation, through the World Bank’s Highly Indebted Poor Country (HIPC) effort," St. Louis added.

Renowned experts have been campaigning hard against financial aid to Africa and have argued it does more harm than good. Dembisa Moyo in her controvercial book: Dead Aid, warned that aid damages and impoverishes Africa’s economies.

Michael Stulman, associate director of policy and communications at Africa Action said: "Since 1996 donor countries - including the U.S. - have committed 90 billion dollars in bilateral and multilateral debt relief to over 30 countries. VULTURE funds profit from this debt relief.”

2/3rds of Haiti's debt canceled

$1.2 billion dollars of Haiti's debt was canceled yesterday by the World Bank and the International Monetary Fund. The two mega banks have an debt cancellation program, where a country can have their debts forgiven as long as they do mandated changes to the way the country operates.

Haiti had to do some audits, adopt new laws and change debt reporting. Haiti did all of this while suffering through food riots and four tropical storms last year.

From the St. Augustine Record, Jonathan Katz tells us more on how the debt forgiveness will ease Haiti's situation.

The actions erased nearly two-thirds of Haiti's outstanding debt. As of April, Haiti owned more than $1.9 billion, according to the Washington-based Center for Economic and Policy Research.

"This is a pretty big victory, definitely. This is what we've been wanting," said Dan Beeton, an analyst with the center, said by phone from Washington. "It's a shame it had to take so long."

Until now, the desperately poor country, where more than 80 percent of its approximately 9 million people live on less than $2 a day, has been paying about $1.6 million each month to the World Bank, according to debt relief advocates at the Jubilee USA Network.

A significant portion of the debt forgiven Tuesday dates back to loans that lined the pockets of Haiti's dictators, especially Francois "Papa Doc" and Jean-Claude "Baby Doc" Duvalier, whose father-son dynasty ended in a 1986 popular rebellion.

Comment: Same ol' Same ol' for the IMF

Here in the states, President Obama requested money from Congress to give to the International Monetary Fund to the tune of 108 billion dollars. Obama wants to give the IMF the money to help the under-developed world through the global recession.

Critics of the IMF say that this is a time to demand better operation of the IMF, so the money can be used without any stipulations set upon the loan recipient. Stipulations that the critics say have hurt the economies of the under-developed world.

From the blog God's Politics, Jubilee USA Network coordinator Hayley Hathaway lays out her critique of the IMF, and asks Congress to make demands of the IMF.

Ask the IMF’s Managing Director, Dominique Strauss-Kahn, and he’ll say the IMF has seen the light and has reformed its ways – but look at the institution’s loans given out during the financial crisis, and you’ll see the same old pattern. The IMF just keeps imposing conditions that restrict governments’ spending instead of allowing them to do what the U.S. and Europe are doing – stimulating their economies by investing in jobs, education, and health care. Instead, many countries with new IMF loans are having to freeze spending. Thanks to continued pressure from activists, civil society, and Global South governments, the IMF has improved on some of its policies and rhetoric, but recent loans show they have a long way to go.

Now Congress might give the infamous institution a blank check. If anything’s going to change, new money for the IMF must only come with significant reforms – reforms which will allow countries around the world to respond to the crisis with stimulus spending (and not restrict health care and education spending). To avoid the debt trap, money should come in the form of grants or debt relief, not new loans. To make sure the IMF is doing its job, Congress must also require key improvements on the institution’s transparency and accountability.

Nigerian president says the IMF and World Bank are "impoverishing" Africa

Nothing like some controversy to start the morning with. But, these are comments that need to heard.

Nigerian President Olusegun Obasanjo says the International Monetary Fund and the World Bank has played a part in "impoverishing" millions of Africans. He claims that the organizations are doing this by not putting enough attention into debt forgiveness for African countries.

The story comes from All Africa as writer Judith Achieng attended a summit where Obasanjo made the comments.

"The question is begged:" Has the World Bank and IMF perhaps unwittingly made Africa poorer through unwholesome policies? "wondered Obasanjo.

He told the plenary session of the Social Summit that it was pointless for developed nations and international financial institutions to demand eradication of poverty and promotion of social justice if they failed to address the issue of external debt, and protectionism in the north, which are marginalising the world's poor .

"Developed countries must commit themselves to debt remission for developing countries, so as to provide these countries with the basis of economic renewal and social advancement," Obasanjo said .

Citing the latest World Bank report, which indicates that the heavy flow of aid to developing countries has done little to improve social development in the countries, Obasanjo, who also is president of the Group of 77 said, as a result of the discriminatory policies, some 48 African countries have a collective economic output that does not surpass that of Belgium .

The report, 'New Paths to Social Development : Community and Global Networks in Action' the World Bank notes that rich countries collectively spent $300 billion to subsidise and protect their markets against foreign competition, a figure which equals Africa's total annual output.

He said poor governments are constrained by policies of fiscal and budgetary austerity which were imposed on them by the international financial institutions, leaving them without resources to initiate job creating programmes that will lead to gainful employment for their youths," he said .

Sub-Saharan Africa whose population of 700 million people is most affected, he said, is suffering double jeopardy, first from the burden of debt which leaves them no resources for social renewal, and secondly, from the protectionist policies of the advanced countries against imports from developing countries .

'The world has a capacity to eradicate poverty, and this summit should give us the opportunity to reaffirm the commitments to give our peoples hope and assurance of enhanced quality of life," he said .

Calls for debt relief amid the credit crisis

The organization Jubilee USA issued a statement yesterday that called on the international community to help Haiti and Liberia. The group says that delays in granting debt relief to the two countries have gone on long enough.

Jubilee USA asks the World Bank and the International Monetary Fund to act quickly, just as they did to help the banks with the credit crisis.

Here are some quotes from leaders of Jubilee USA, clipped from their blog Blog The Debt

Neil Watkins, National Coordinator of Jubilee USA Network, said: “After four hurricanes in a month and an escalating food crisis it is outrageous that Haiti is being told it must wait six more months for debt relief. This is like Hank Paulson telling Wall Street he will get back to them in the New Year.”

“Haiti has been dealing with multiple crises in recent months. As a result it is still spending $1 million a week on debt service while its people starve. As we’ve seen this month, when Wall Street bankers are affected, they get fast tracked for debt relief. But the people of Haiti don’t seem to matter very much in Washington. Haiti needs the immediate debt cancellation of its illegitimate debt that it has long been promised now,” said Watkins.

Nick Dearden, Director of Jubilee Debt Campaign UK, said: “Liberia has a large, illegitimate commercial debt burden and both the government and its creditors are ready to make a deal via the Debt Reduction Facility, but are being held up by delays in the World Bank bureaucracy. The people working on the DRF should stop crisis-watching on CNN and get on with releasing funds that will save people’s lives.”

“Liberia is on the front line of the global food crisis, and yet it is still being told it must wait until 2010 for debt relief to be delivered. In such a rapidly-changing world, the Heavily Indebted Poor Countries initiative is increasingly looking like an outdated process. It’s time for an urgent injection of political will to get some liquidity back into debt cancellation, and bail out the world’s poor from a mess they had no part in creating,” said Dearden.

[comment] Taking to the Streets for the Poor

from Blog the Debt

by Fran Quigley
Indianapolis Star

Last week, I participated in a day-long downtown Indianapolis fast and demonstration asking Senator Bayh to join Senator Lugar in co-sponsoring the Global Poverty Act and Jubilee Act. By committing the U.S. to help reduce extreme poverty and cut the debt burden of struggling countries, these two pieces of legislation would address the obscene fact that 16,000 children die each day simply because they are poor.

We took to the streets in the hopes of educating Hoosiers about global poverty. As it turned out, we were the students, too. Even in the age of blogs, Facebook and cell phones, there are still a few lessons best understood by talking with people face-to-face.

We learned about messaging. Some people we spoke with about our issues gestured to the homeless people sitting near our vigil on west Market Street, and asked, “What about the poverty here at home?”

With deeds instead of words, most of the activists at our demonstration eloquently answer that question every day. The folks who held signs asking Senator Bayh to help hungry children in Haiti and Kenya also volunteer at the local food pantries, care for the sick, and empower the struggling right here at home. Responding to domestic and global poverty is not an either-or proposition, and that message has particular credibility when it comes from those who work for justice and peace every day in Indiana.

Of the few thousand passers-by we approached with our signs and flyers over the course of the day, most were courteous and welcoming. A comparative few had their personal spam filters turned on high, and were suspicious or even hostile. Perhaps because of a richer cultural history of advocacy for social justice, people of color were the most likely to accept our outreach and engage in discussion.

We learned about politics, too. Few passers-by were previously aware of the legislation we promoted, but many were unsurprised by the contrasting positions of our Indiana senators. Senator Lugar provided early and vocal leadership on the poverty bills, but Senator Bayh has sat on the fence. In response to over a thousand letters by Hoosiers on this legislation, Bayh has responded by offering neither support or opposition, or even an explanation for failing to take a position.

That didn’t seem to surprise the folks we spoke with. White-haired men in dark suits, women pushing baby strollers and young men walking to the Illinois Street bus stop all shook their heads and offered variations on the same observation: “Bayh doesn’t take a stand on anything.” It was a ground-level echo of the verdict widely pronounced by national and local pundits, but we hope our junior senator defies that reputation by becoming a leader in fighting poverty.

Finally, we learned about grace. Several people passed by, accepted a flyer and walked on, only to double back a few minutes later to offer sincere thanks to demonstrators for speaking out for the least of our brothers and sisters. A political science teacher took photographs to show her class that citizen participation in government isn’t limited to complaining about our own property taxes or 401(K)’s. The many kind “God bless you’s”’ we received made less positive reactions fade into the background.

Link to full article. May expire in future.

More Debt Relief in Sight for Poorest Nations

from IPS News

By Emad Mekay

WASHINGTON - Anti-debt campaigners say legislation passed by a U.S. Congressional committee this week that would expand debt cancellations to an additional 25 poor nations could prove effective in fighting poverty, stopping environmental degradation and easing the traditional strict economic conditions that accompanied loans and often led to economic chaos.

The Senate Foreign Relations Committee, which supervises U.S. funding for international financial institutions, passed the Act for Responsible Lending and Expanded Debt Cancellation on Tuesday.

The act, known both as the Jubilee Act and the Casey Bill for Democratic Senator Bob Casey of Pennsylvania, paves the way for the approval by the full Senate.

Some 25 low-income countries that are not eligible for debt cancellation under current debt-forgiveness initiatives, such as Mongolia and Georgia, stand to benefit from the bill.

The legislation takes the unusual step of instructing U.S. officials at international financial institutions such as the World Bank, the International Monetary Fund (IMF) and the Paris Club of bilateral creditors not to seek to impose the traditional conditions that have often been blamed for economic crises in many developing nations.

Critics say that international financial institutions have typically imposed conditions that were slanted towards multinational companies and local elites. These included user fees for water, sanitation, primary education and health care, including treatment for HIV/AIDS, tuberculosis and malaria.

Those institutions, with enormous influence on borrowing governments in the most impoverished nations, have also urged the passage of laws undermining workers' ability to organise and deterred government spending on essential healthcare or education expenditures by imposing national budget caps.

The new act takes those institutions to task on a number of other issues, including creditor transparency and responsible lending.

It warns, for example, against pushing poor nations back in the red through new loans. Instead, it says that future external financing needs should be met mainly through grants. It also warns of so-called vulture funds, which have traditionally sought to buy sovereign debt at a discount with the intent to litigate collection at a large profit.

Under the bill, the U.S. Government Accountability Office (GAO), a congressional oversight agency, will audit the debt portfolios of previous governments in certain countries, including South Africa and the Democratic Republic of Congo, where there are allegations that odious loans were made to the government. The GAO report will be made public in two years.

The act was hailed as "live-saving" and "historic" by anti-debt campaigners who have long argued that debt penalised poor people and increased hunger around the world.

"We are thrilled to see such strong bipartisan support for the Jubilee Act in the Senate Foreign Relations committee," said Neil Watkins, national coordinator of the Jubilee USA Network, a coalition of development groups that is now lobbying for passage of the act by the full Senate.

The bill does require beneficiaries to manage their economies better. Countries receiving debt relief will have to allocate at least 20 percent of their national budget towards poverty-alleviation programmes such as the provision of basic health care, education and clean water services.

The U.S. treasury secretary will certify annually as to how the savings from debt cancellation were used in poor nations.

"In other words, the debt relief cannot go towards benefits for the wealthy elites or unnecessary military expenditures in these nations," said a statement from Senator Casey's office.

Countries that are classified as terrorism sponsors or are engaged in weapons of mass destruction proliferation, or involved in human rights abuses are excluded from benefiting from the bill.

The international debt crisis has made headlines over the past several years with mounting evidence of its impacts on poor families across the globe.

After extensive campaigning by debt activists, the United States and other Group of Eight (G8) industrialised nations reached an agreement to cancel 100 percent of the debts owed by eligible poor nations to Paris Club members, the IMF, the World Bank, and the African Development Bank. The Inter-American Development Bank (IDB) reached an agreement in early 2007 to provide similar treatment.

Link to full article. May expire in future.