[stop-imf] Jubilee Zambia: HIPC HAS NOT DELIVERED

[Robert Weissman]

PRESS RELEASE                           =09=09=09=09=09=09=0910 October 200=
2

HIPC HAS NOT DELIVERED

The IMF-WB sponsored Highly Indebted Poor Countries (HIPC) initiative
meant to provide debt relief to developing countries has failed to
deliver. Instead HIPC has left many developing countries commiting
scarce resources to debt servicing instead of meeting the needs of their
people, the majority of whom live in desperate poverty.

This is the conclusion of 44 participants representing eight African
countries and several major Jubilee cooperating partners from the North
who gathered in Lusaka, Zambia, 8 and 9 October 2002 to address the
question, "Will the Current Creditor Arrangements on Debt Make a Difference=
?"

Our experience of the impact of  HIPC answers that question with a
resounding NO!  HIPC has failed to make a difference primarily because
its focus is on economic measures to assure continued debt servicing
rather than on social measures to meet the enormous needs of the poor.


Other related reasons for HIPC=92s failure: debt sustainability estimates
are based on unrealistic estimates of economic growth (e.g., increased
trade);  the conditionalities it imposes are replays of the discredited
elements of the Structural Adjustment Programmes (SAP); it lacks an
impact assessment of what is actually happening through its
implementation; and both the International Financial Institutions (IFIs
such as the World Bank and the IMF) and our governments are not
practising good accountability regarding priority setting, management,
expenditure practices, etc.

We are aware from the recent meetings of the Boards of the  World Bank
and the IMF in Washington DC that these institutions are not in fact
interested in reform of HIPC but simply in increasing the funds
available for its implementation.  This is not a realistic approach to
debt relief that is consistent with their stated objective of meeting
the Millennium Development Goals (MDG) of cutting the levels of poverty
in half by 2015.

While there are a few HIPC success stories (e.g., increased primary
school enrollment, better access to water resources), the fact is that
debt relief under HIPC is not benefiting the people as a whole.  This
can be seen in the many examples we shared from our experiences.  We
have learned that, contrary to Northern creditors=92 claims, Uganda is not
a "show case" of HIPCs=92 success, having fallen three times into
unsustainable debt levels and now paying almost as much in debt
servicing as before HIPC.  Similarly, Mozambique has found itself
borrowing more since debt relief was offered to it, and 60% of its
national budget depends on external credit.  Under the HIPC
arrangements, Zambia still spends more on debt servicing than on health
and education.

An additional major fault we noted in our deliberations was that three
heavily indebted African countries facing serious poverty situations =96
Kenya, South Africa and Zimbabwe =96 are not included in the HIPC
arrangements.

What do we say, then, must be the way forward?  We make the following deman=
ds:

To the IFIs and creditor countries:

Be responsible and honest enough to admit that HIPC in its present form
is not meeting the objectives for which it was established, namely, to
achieve "a robust exit from unsustainable debt."

Be ready to move to alternative approaches that tie the sustainability
of debt to the ability of governments to meet the Millennium Development
Goals (MDG) endorsed by the international community.

Recognise that debt cancellation is in fact the fastest and most
effective way of financing poverty eradication programmes.

To our Debt Campaign partners in the North:

Do not let your governments and your citizenry get distracted from the
goal of debt cancellation, since the debt problem has not been solved
and is still the major block to sustainable development that enables
poverty eradication.

Push your governments to push the World Bank and IMF on whose Boards
they sit to deliver debt cancellation that focuses on debt
sustainability based on the achievement of the MDGs.

Advocate for an independent, fair and transparent arbitration system
that ensures just debt solutions that must be accepted by all creditors
and debtors.

Keep close contact with Jubilee partners in the South so that our
concerns and issues are effectively represented in your campaigns.

To our African Governments:

 Acknowledge that the current HIPC initiative is not only not
sustainable but also is not working to promote the well being of the
majority of our people.

Improve your negotiating capacities in order to move away from reacting
to foreign proposals toward setting initiatives to protect our national pri=
orities.

Put in place transparent, accountable and participative mechanisms to
assure that any available debt relief goes to poverty eradication
programmes and safeguards against future irresponsible borrowing
patterns.

Be readily open to listen to civil society=92s experience and analysis so
that our national programmes will have true ownership.

To Ourselves, African Jubilee partners:

Renew our motivations to be involved in this debt cancellation campaign
on the basis of our commitment to the poor in our midst.

Recommit ourselves to a debt cancellation campaign that mobilizes people
in the widest sense to demand the justice of debt cancellation.

Cooperate with each other more effectively with information and resource sh=
aring.

Demand that our governments put in place transparent, accountable and
participative mechanisms to assure that any available debt relief does
go to our PRSPs or other poverty eradication programmes.

Commit ourselves to the hard analysis that demonstrates that the current
HIPC arrangements are not adequately working in our countries.

Pledge ourselves to monitor our fulfillment of our plans, with specific
evaluation in six months.

[Countries represented:  Kenya, Mozambique, Malawi, Zambia, Zimbabwe,
Angola, South Africa, Uganda, South Africa, Belgium, United Kingdom, Brazil=
.

For further information, contact Charity Musamba, Jubilee-Zambia,
Lusaka, 260-1-290410.]