[stop-imf] Total Debt Cancellation Is Not a Sustainable Solution - World Bank

[robert weissman]

chutzpah

n : (Yiddish) unbelievable gall; insolence; audacity [syn: chutzpa, hutzpah]

----

Total Debt Cancellation Is Not a Sustainable Solution - Madavo

The Post (Lusaka)
NEWS
August 13, 2004
Posted to the web August 13, 2004

By Mwila Nkonge
Lusaka

WORLD Bank vice president for Africa Dr. Callisto Madavo has said total
debt cancellation was not a sustainable solution to Africa's debt problem.

And Dr. Madavo has said the bank was worried that the poverty situation
in Zambia had continued to deteriorate over the past decade.

Speaking on arrival at Lusaka International Airport yesterday, Dr.
Madavo said African countries could not develop while shut out of the
international financial system.

"African countries want to deal with the issue of debt but not while
shut out of the world financial system. We should all ensure that the
solution to today's debt problem does not compromise tomorrow's
prospects," he said.

On suggestions that Africa refuses to pay back its foreign debt, Dr.
Madavo said such unilateral action would be inappropriate.

He noted that while Africa's debt burden was a hindrance to the
continent's development, there was need for "a negotiated and shared
approach to the issue" rather than unilaterally deciding not to pay.

"We all need to ensure that the debt overhang is removed so that African
countries can free enough resources to invest in growing their economies
and thereby reduce poverty," Dr. Madavo said.

He said this was why the World Bank was calling for reforms in the
global economic system to allow African and other developing countries
to participate fairly in international trade.

Dr. Madavo said giving African products guaranteed access to markets in
developed countries would enhance the continent's drive for sustainable
development and reduce its dependency on borrowing.

"We strongly believe that Africa should have unrestricted access to
international markets for all products from agricultural produce to
manufactured goods," Dr. Madavo said. "This will help reduce the
continent's dependency on borrowing because it will be able to earn the
resources needed for investment."

On Zambia's poverty situation, Dr. Madavo urged all stakeholders to
double their efforts at poverty reduction.

"Our statistics indicate that over 70 per cent of Zambians live below
the poverty baseline of US$1 per day, and this has deteriorated over the
last decade," Dr. Madavo said. "This signals a requirement to strengthen
the effort Zambia is making to get the economy growing so that the poor
are lifted from poverty.

"And I am happy that over the last three years, we have seen encouraging
signs from Zambia. Since more needs to be done to diversify and
strengthen the economy further, we are committed to working with the
government in resolving the current economic challenges."

Dr. Madavo was confident that Zambia would meet the targets to qualify
for the Highly Indebted Poor Countries (HIPC) completion point given its
performance since January.

"It is like the Olympics. Zambia is coming to the finishing line and the
trick is to stay on course. I am confident that the HIPC completion
point targets will be met by the end of this calendar year," said Dr.
Madavo.