[stop-imf] Germany To Write Off Debts Worth 5 Billion Dollars (fwd)

[Robert Weissman]

       Copyright 2000 InterPress Service, all rights reserved.
          Worldwide distribution via the APC networks.

                      *** 06-Jan-0* ***

Title: DEVELOPMENT: Germany To Write Off Debts Worth 5 Billion Dollars

By Ramesh Jaura

BONN, Jan 6 (IPS) - Responding to strong campaigning pressure by
the global Jubilee 2000 Coalition, Germany's Development Minister
Heidemarie Wieczorek-Zeul has confirmed that the Berlin government
will write off 100 percent of the bilateral debts of some 30
poorest countries of the world.

The initiative will begin to be translated into action this
year, said Wieczorek-Zeul in a statement made available to IPS
this week. "We plan to cancel debts worth about 9 billion marks
(five billion dollars)".

The figure includes commercial loans that have yet to be paid
back. In addition, Germany will back the 15-nation European
Union's debt cancellation initiative, contributing about 360
million dollars, said Wieczorek-Zeul.

While she did not name the countries whose debts will be
cancelled, an official at the development ministry said, countries
which would benefit from the debt write-offs are those included in
the Heavily Indebted Poor Countries initiative (HIPC).

HIPC is the international vehicle for debt rescheduling and
cancellation, managed by the International Monetary Fund (IMF) and
the World Bank. 41 of the world's poorest qualify for HIPC, but
they have to prove their ability to meet stringentic
conditions before any debt cancellation.

Countries enjoying debt forgiveness are required to put into
place a comprehensive and participatory poverty reduction
strategy, said Wieczorek-Zeul.

"We want to ensure that wide sections of the population in
developing countries really gain from debt cancellation - by way
of better opportunities for education, improved health care and
proper counselling for family planning," she added.

The rationale behind debt forgiveness was to give highly
indebted countries a "room for financial manoeuvre The affirmation
of Germany's vow to write off the debts of
world's poorest countries came within three months of President
Bill Clinton pledging cancellation for poor-countrmeetings in
Washington last September.

Earlier, Canada had committed similar pledges to writing off
the debts of world's poorest countries.

Last month, Britain followed suit, with the Jubilee 2000
Coalition of some 1,800 church and other non-governmental
organisations, praising the "magnanimous gesture", but warning
that it was "not yet clear cut" whether Britain's actions will
make a difference and save children's lives. 19,000 children a day
are dying because of the debt burden, claims Jubilee 2000 drawing
upon the latest annual report of the UN Children's Fund
(Unicef).

The world-wide Jubilee 2000 Coalition has emerged from years of
campaigning by southern movements on debt and the ternal debt
burdens and new credit agreements.

Jubilee 2000 in the south comes out of many of those struggles,
says Friedel Huetz-Adams of Erlassjahr 2000, Germany chapter of
the Jubilee 2000 Coalition.

As the developing ith offers of big loans at very low rates of
interest. Many
countries in Latin America took up the offer and soon found that
with interest rate rises and commodity price decreases they
couldn't keep up the repayments.

Countries in Africa, which proclaimed independence later, were
forewarned about the pitfalls of the debt trap butt. Still lacking
control over their own resources, they
were desperate for credit to match the high expectations of their
people and inevitably took the loans eagerly offer conditions
attached to these loans became
onerous to the population, who found they were not benefiting from
the international lending process.

>From Argentina to Zambia, initial resistance took the form of
strikes and demonstrations when the first price rises for basic
goods followed the implementation of various programmes based on
the adjustment models of the IMF and World Bank. As debt and
adjustment continued, a more coordinated people's response
emerged.

This mass opposition has prompted policy-makers in the
developing world to propose various alternatives to the IMF's
Structural Adjustment Programmes (SAPs). For example, the African
Alternative Framework to SAPs (AAF-SAP) was put forward in 1989 by
the U.N. Economic Commission for Africa under the bayo Adedeji who
later became an Under Secretary-General of the
world body.

Later adopted by the Organisation of African Unity (OAU) and
receiving the support of the U.N. General Assemblyk and IMF and
western leaders.

An official at the German development ministry dismissed
suggestions that Germany - which claims the third largest poor-
country debt, amounting to 6.1 billion dollars, after France's
11.7 billion dollars and Japan's 10.5 billion dollars - was
dithering on implementing the debt cancellation initiative.

The plan was first agreed at the Cologne summit of the Group of
Seven (G-7) major industrial countries.

"This was very much an initiative taken by us,reen Party - in
power
since October 1998 - has been leading the debt cancellation
initiative.

Nevertheless, because of complicated mechanisms involved, most
of the 41 countries considered to qualify - in principle - for the
HIPC initiative will have to wait for some time to enjoy the
benefit of debt cancellation.

Until now seven countries - Bolivia, Burkina Faso, Cote
d'Ivoire, Guyana, Mali, Mozambique and Uganda - have qualified for
debt relief under the HIPC initiative totalling about 3.4 billion
dollars in Net Present Value (NPV) Terms.

The sustainable level.(END/IPS/raj/mn/00)