[stop-imf] G8: No Debt Relief

[Robert Weissman]

Date: Mon, 14 Jun 2004 10:01:09 -0400
From: World Bank Press Review <devnews@worldbank.org>

=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D
G8 Fails To Write Off Africa's Debt But Promises Help For AIDS Vaccine
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D

The leading industrial powers plan to help Africa by developing an
anti-AIDS vaccine and training thousands of new peacekeepers, but did not
come up with the hoped for breakthrough on forgiving debt for the world's
poorest countries, almost all of them in Africa, reports The Independent
(UK, 06/11) following the end of the three days of G8 talks at the Sea
Island resort.

To further the battle against AIDS, which is now killing 6,300 people in
Africa every day, the US is to contribute $15 million to a worldwide drive
to speed up development for a vaccine against the disease. At the same
time, the G8 is launching a multiyear scheme to train African troops for
peacekeeping missions in the continent. The aim is to have 75,000 troops
trained by 2010. Britain's contribution to the project will rise to $12
million annually when the scheme is in full swing.

But there will be anger that the summit failed to come up with the
debt-relief package for which non-government organizations and aid groups
were hoping, involving a 100 percent cancellation of multilateral debt
owed by the Highly Indebted Poor Countries (HIPC), and the conversion of
all borrowings into grants. Instead, the G8 has merely approved a "top-up"
of funding for the existing scheme to help the HIPC countries, and a
two-year extension to December 2006 of the period in which the poorest
countries can apply for assistance under the scheme. Total cancellation of
official debt to the HIPC countries has been strongly backed by Britain,
but it appears to have run into continuing objections from Japan and
Germany and fallen foul of the argument raging over precisely how much of
Iraq's Saddam-era debt of $120 billion should be forgiven. The US and
Britain had been pressing for almost total cancellation of Iraqi debt, but
France insists that Iraq, with its oil riches, should not be treated any
more favorably than the poorest Third World nations. As a result both
initiatives have stalled, temporarily at least, to the dismay of the NGOs.

The Bangkok Post (Thailand, 06/12) writes in an editorial that the US
showed little interest in forgiving Africa's debt, instead pushing its own
barrow in seeking a substantial reduction in the $120-billion Iraq owes
the world and in particular the G8. French President Jacques Chirac was
correct in his summation of the US proposal to forgive Iraq's debt. He
said it would not be decent and make no sense to do for Iraq in three
months what the G8 has failed to do in the past 10 years for heavily
indebted poor African countries, adding that, after all, Iraq was a
resource-rich country.

The Atlanta Journal =96 Constitution (US, 06/13) and The Guardian (UK,
06/12) meanwhile note that if British Prime Minister Tony Blair has his
way, the focus of the Group of Eight summit next year in Scotland will
return to economic matters, particularly two issues some think were given
short shrift in Sea Island: Africa and climate change. Blair wants the
summit's leaders to focus on reducing the debts of many Third World
countries. Leaders of those countries say the debts soak up vast portions
of their national budgets that could be better spent on education, health
care and infrastructure. Blair also is expected to unveil an innovative
financing plan that would leverage existing foreign aid from developed
countries to perhaps double the amount of aid underdeveloped countries
receive in the early years of the program.

On AIDS, The Guardian (UK, 06/11) further explains that "global HIV
vaccine enterprise" scheme was described as a "virtual consortium"
allowing greater collaboration and coordination among scientists around
the world searching for a vaccine for the virus that causes AIDS. The
proposal is to further engage scientists from developing countries by
encouraging the setting up of a series of vaccine development centers
around the world, with the headquarters in the US. Other aims include
standardizing laboratories' measurement systems and parameters so advances
in one country can be used in others, as well as building an integrated
clinical trials system.

Meanwhile, Larry Elliot of The Guardian (UK, 06/11) comments that the
intended centerpiece of the summit was Bush's greater Middle East
initiative, and there the lack of real achievement highlighted the
intrinsic weaknesses of the G8 framework. The exclusivity of the club
means that non-members bridle when they are lectured by the rich and
powerful. Arab feathers were predictably ruffled by the clumsiness of
Bush's initiative, which looked like an attempt to foist American values
on the region.

The Financial Times (06/11) adds that the American plan to promote reform
in the Middle East has evoked a mixed reaction in the region. A Jordanian
statement, issued at the summit, welcomed the plan as "reflective of the
priorities of the region", but warned that reform imposed by outsiders
could backfire. The initiative - targeting the "broader Middle East and
north Africa" =96 is a watered down version of an earlier US plan that
provoked the anger of Arab rulers because it was drawn up without
consulting them, and made no mention of resolving the Arab-Israeli
conflict.

Nonetheless, as the FT writes in Friday's editorial, behind the G8's
wordily titled "Partnership for Progress and a Common Future with the
Region of the Broader Middle East and North Africa" lies a historic shift,
particularly for the US. Probably the last time Washington came out so
openly on the side of "progressive" forces in the Middle East was in 1956,
in order to oppose the combined British, French and Israeli attack on
Egypt's Suez canal. Now, at least on paper, democratic opposition forces
in the Arab world can expect a sympathetic hearing from the US and other
G8 countries that in the past tended to cold-shoulder them in order to
secure oil and arms contracts.

In other G8 news, This Day (Nigeria, 026/11) also notes G8 leaders
launched four transparency compacts with Nigeria, the Republic of Georgia,
Nicaragua, and Peru to provide assistance in achieving high standards of
transparency in public financial management, procurement, the letting of
public concessions, and the granting of licenses. This comes following a
report by the World Bank which identified corruption as "the single
greatest obstacle to economic and social development." Through this pact,
the G8 will provide technical assistance to partner countries and support
their efforts to combat corruption and increase transparency; work with
countries to develop action plans to achieve measurable results in
fighting corruption; and work with these four governments to meet the
specific needs and priorities of each country. Participants would also
Enlist the support of private companies, civil society, and international
institutions, such as the World Bank, to enhance public financial
management and accounting.

Kyodo (Japan, 06/11) further reports that to break the cycle of famine in
the Horn of Africa, the leaders agreed to support efforts by African
nations to raise farm productivity and promote rural development. They
also agreed to cooperate on improving the global mechanism to better
evaluate and respond to needs for emergency aid and on promoting a second
green revolution in Africa.

The Age (Australia, 06/11) writes the G8 nations further supported a US
plan to help develop a wide range of bond markets for developing countries
as part of measures to bring private sector techniques into the fight
against poverty. Under the plan, Western countries would support setting
up sub-sovereign bond markets in developing countries, particularly aimed
at providing finance for water and sanitation projects.

Finally, The Associated Press notes German Chancellor Gerhard Schroeder
said Thursday that China would be a good candidate for inclusion if the G8
industrial countries decides to take in a ninth member. Other possible
candidates for inclusion in the G-8 would be India and Brazil, Schroeder
said. British Prime Minister Tony Blair also mentioned the possibility of
a G-9, but was more reserved, saying that the group's structure should
probably change "at some point in time."