[stop-imf] Report from Washington: Actions & Policy News from the IMF/World Bank 2004 Annual Meetings (50 Years is Enough report)

[robert weissman]

From: 50 Years is Enough:

Report from Washington: Actions & Policy News from the IMF/World Bank
2004 Annual Meetings.

1. Developments on Debt
2. Developments on Expansion of IMF powers
3. Rally & Vigil events
4. News Articles on these topics

The IMF/World Bank annual meetings have now concluded in Washington,
apart from a few seminars and cocktail parties. Below are brief reports
on the three subjects we were most concerned with, followed by news
articles on each of them.

1. Developments on Debt

We=92ve been reporting on this listserv about recent negotiations among
the G7 countries on debt, including a proposal to provide 100%
multilateral debt cancellation for about 30 of the most impoverished and
indebted countries. The issue was on the agenda of the Group of 7
Finance Ministers=92 meeting, which as usual immediately preceded the
formal meetings of the IMF and World Bank. It was commonly acknowledged
that this was the crucial forum =96 ratification by the institutions=92
boards would be assured if the G7 agreed on a proposal; if it did not,
the issue was unlikely to be discussed seriously.

The U.S. was supporting a plan to accomplish the cancellation without
needing to raise additional money from donors). Instead the IMF and
World Bank would balance their books by drawing on various funds they
control, including those designated for low-interest loans to the most
impoverished countries. The U.K. was supporting a plan that called for
new allocations by each of the G7 countries, a challenge which Japan,
Germany, and the U.S. were very unlikely to meet. The U.K., however,
pushed for sale of IMF gold reserves as a way to satisfy those who
wanted to be sure that cancellation would not impair the institutions=92
finances. The U.S. said that might be a good option. Despite a study
showing that gold sales would be painless for all involved, governments
like Canada and Germany were not convinced.

The 50 Years Is Enough Network supported doing whatever it took to get
to the 100% cancellation, largely because an international agreement on
that would be a major precedent-seeking achievement, and could be a
first step to restoring desperately-needed resources to those who most
need them, and to free Southern governments from the dictates of the IMF
and World Bank. Sales of IMF gold would be very acceptable to us, and
likely to satisfy the most parties (which is not to suggest that those
parties were waiting to hear what our position would be).

We, along with many others (including other G7 governments), assume that
the U.S.=92s motivation in proposing 100% debt cancellation is, at least
in part, the desire to persuade the French and others to make
concessions on debt relief for its puppet state in Iraq. U.S.
negotiators insist the two issues are not related, but the French have
done a good turn in insisting that any talk of debt reduction for the
Iraqis is off the table if the HIPC (low-income) countries are not dealt
with also. That said, it now appears that the French might be resisting
going along with any proposal made by the Bush administration =96
understandable, but in this case perhaps counter-productive.

So, the G7 finance ministers failed to reach an agreement. We don=92t know
what all the circumstances were =96 whether it was British Chancellor
(Finance Minister) Gordon Brown=92s penchant for seeking credit and
publicity, the French government=92s refusal to do anything with Bush, the
German/Japanese reluctance to see any new resources devoted to debt
relief, the Bush administration=92s high-handedness, or Canadian and
others=92 discomfort with gold sales (out of a misguided fear that their
gold industry would be negatively affected) =96 or some combination of thes=
e.

We are of course disappointed that the G7 communique contained all of
two sentences on debt, with only vague pledges to study the issue
further. The IMF/WB meetings, which immediately followed offered no
further news on debt.

The good news is that the issue became quite prominent =96 indeed, it was
the main issue the media focused on at these meetings. We were
pleasantly surprised that Treasury Secretary John Snow made clear
statements about the need for and viability of plans to cancel 100% of
impoverished country multilateral debt. That Gordon Brown, the chair of
the IMF=92s policy-making committee, devoted so much attention to the
issue =96 making a major speech the week before the meetings with a
counter-proposal to the U.S.=92s, and saying after the Finance Ministers=92
meeting that he felt an agreement, including gold sales, was just =93weeks
away=94 =96 is also encouraging. Brown=92s government (U.K.) seems determin=
ed
to make development a central theme of the G8 summit it is hosting in
June 2005, and UK NGOs are gearing up to make debt a signficant focus.

A few weeks ago we viewed this past weekend=92s meetings as perhaps a
unique opportunity to make significant progress toward the goal of 100%
debt cancellation. We=92re unhappy with the result, but mollified somewhat
by the attention the issue received. It seems more possible now that the
issue will not go away, and G7 governments will remain under pressure to
make substantial progress soon. That means a lot of work for
campaigners, so you=92re likely to be hearing more and more about debt in
the weeks and months to come.

The collection of news articles below includes a message and press
release from the Jubilee USA Network with further details. The 50 Years
Is Enough Network and Jubilee worked closely on this issue over the past
months, and will continue doing so.


2. Developments on Expansion of IMF Powers

The encouraging remarks by Snow we mention above were not without their
flip side. In the same speech, he spoke about his hopes that the G7
finance ministers and IMF/WB could agree very soon on the creation of a
new facility =96 the Policy Monitoring
Agreement =96 which would offer to certify countries=92 economic programs i=
n
the absence of actual IMF lending. In the run-up to these meetings we
had heard reports that the U.S. proposal for 100% debt cancellation
might include a provision like this. Our fear was that this would
formalize the IMF=92s =93gate-keeper=94 function, which is the root of the
IMF=92s power. The IMF, in essence, is looked to by other creditors and
aid agencies to provide a seal of approval; without it (usually meaning
a formal IMF lending program that has not gone =93off-track=94 because of
the country=92s failure to adhere to IMF rules), the country finds it
difficult, if not impossible, to get credit or capital from any other
multilateral, bilateral, or private source. Because one of the main
reasons we advocate debt cancellation, in addition to recovering
resources for vital needs, is the imperative of liberating governments
from IMF control of their economic policies, we worried that such a
facility could have the effect of preserving the IMF=92s gate-keeper role
even if the IMF no longer had substantial funds to lend. It would
probably mean that every bit of aid would be explicitly conditioned on
the IMF=92s on-going approval of a country=92s policies.

The proposal was brought up at the meetings, but all news reports that
mention it indicate that it was subjected to a hostile reception from
the whole range of developing countries. This of course is not always
enough to deter the G7, but it appears to have at least stalled the
proposal for now. It may appear again as talks on debt cancellation
continue.


3. Rally & Vigil Events

U.S. activists decided back in November 2003 that the primary
mobilization on the IMF/WB in 2004 would be for the spring meetings in
April, where we turned out about 3000 people for a rally and march and
other events. Our plans for the fall meetings were low-key: small
rallies focused on the debt talks at the G7 finance ministers=92 meeting,
and an overnight vigil in the park outside the World Bank. The Friday
rally, sponsored by Jubilee USA Network, at the Treasury Department
(where the ministers were meeting) attracted about 120 people, and the
vigil, which 50 Years took the lead on along with Religious Working
Group on the World Bank and IMF, Jubilee, and Pax Christi DC, and which
started soon afterward and continued for 27 hours attracted about that
number over its length. There were liturgies and speeches on both days
at 4 pm, and a handing over of thousands of postcards demanding debt
cancellation to a World Bank official on Saturday morning.

A lot of press stopped by over the period of the vigil. At its lowest
point =96 a torrential rain at 5 am Saturday =96 four people valiantly
protected the groups=92 literature, placards, etc.

The Washington events were part of coordinated events around the world
for the week (plus) of actions called for October 1-12. News on events
in other countries can be found at www.ifi-out.org.


PRESS RELEASES / NEWS ARTICLES

Debt

Excerpt from Secretary Snow=92s speech to Bretton Woods Committee:

I believe the Bretton Woods Institutions have a responsibility to
continue their own reforms, for example doing more to reinforce debt
sustainability in poor countries. That requires private investment,
but also a commitment to not making loans when it is highly probable
that they will be forgiven. Grants and debt relief must be
significantly increased =96 we are considering more options to do so,
including those that would provide up to 100 percent debt relief and
grants from the international financial institutions. Employing both
grants and debt relief together would give the poorest countries a
chance to reach their international development goals of the
Millennium Declaration without adding to debt burdens. I am working
with my colleagues in the G7 and other donors, with the institutions,
and with recipient countries to achieve a consensus on the best way to
solve the debt sustainability problem and ensure that our reforms only
result in greater, not fewer, resources to poor countries.

I am pleased to see that the introduction of grant assistance at the
World Bank, the African Development Bank and the Asian Development
Bank is already proving to be successful and popular in recipient
countries.

I also feel strongly that a new, non-borrowing facility ought to be
established at the IMF, aimed at promoting strong country ownership
and leadership in economic program design. This Policy Monitoring
Arrangement would allow the IMF to signal its approval of countries'
own economic policies in the absence of a funded program, and provide
donors and markets with a regular assessment of policies. This would
strengthen the IMF as an institution of international economic
cooperation where each country assumes its responsibility for growth
and stability. I welcomed the IMF Board's discussion on this issue
last week, and I hope the IMFC can reach agreement this weekend to
urge the IMF to move quickly to put this mechanism in place.

New York Times editorial: Ending the Cycle of Debt

The New York Times
October 1, 2004 Friday

Ending the Cycle of Debt

One of the biggest reasons that very poor countries can't provide decent
education and health care is that they are stuck in a cycle of debt owed
to the International Monetary Fund, the World Bank and regional
development banks, much of it dating to the 1970's. Most have paid back
in interest more than they originally borrowed but haven't been able to
touch the principal, and the cycle continues. Nigeria, for example,
borrowed $5 billion, has paid back $16 billion and still owes $32
billion on the same debt.

Everyone involved agrees that this is unjust, and the members of the
club of nations known as the G-8, whose finance ministers are meeting in
Washington on Friday, have endorsed the concept of debt relief. But
concrete proposals have been lacking until very recently. Now the United
States is proposing to cancel the debts of the world's 30 poorest
countries, and Britain has joined in. The rest of the G-8 should endorse
this plan.

One motivation for President Bush's efforts in this area is that he
wants the world to greatly reduce Iraq's debt. He has run into
objections from other nations who rightly do not want to see a country
like Iraq, with the world's second-largest oil reserves, treated better
than, say, Burkina Faso. But Mr. Bush's proposal is also consistent with
his longstanding campaign to get the banks to give money, rather than
lend it, to the poorest nations.

Current efforts to reduce these debts are failing. The Heavily Indebted
Poor Countries Initiative began in 1996, and was expanded in 1999, with
the purpose of eliminating $100 billion in debt from dozens of poor
nations. But it has been too slow and limited. It has not reduced debts
to manageable levels.

Poor countries deserve more help to get out from under loans made by
banks awash in oil money; a great deal of that loan money went to
corrupt dictators. Today, sub-Saharan Africa pays $1.30 in debt service
for every dollar it gets in aid, four times what it spends on health care.

Rich countries have yet to agree on who should pay. Britain has offered
to contribute 10 percent of the needed money, but other G-8 countries
are not likely to be similarly generous. The Bush administration's
solution, that the I.M.F. and the World Bank cover the costs, is the
best one. Surprisingly, leaders of those institutions, who had
previously opposed financing debt cancellation, now say they are
willing. One reason is that the I.M.F. owns more than 103 million ounces
of gold, a holdover from the gold standard days that it values at about
10 percent of the market price. By selling a small part of that gold at
market rates or by simply revaluing it, the I.M.F. could finance debt
cancellation painlessly.


US Snow: Sees Efficient Ways To Forgive Sovereign Debt

DOW JONES NEWSWIRES
September 30, 2004 11:05 a.m.

WASHINGTON -- U.S. Treasury Secretary John Snow said Thursday debt
forgiveness of up to 100% for poor countries that can't repay loans can
be achieved without overburdening donor countries or multilateral lenders.

Snow said the details of the debt forgiveness can be worked out in
meetings planned Friday through Sunday of the Group of Seven wealthy
countries, the International Monetary Fund and the World Bank.

"...Of course the United States supports continued strong funding (for
the IMF and World Bank), but I think this can be done in ways that are
not highly costly, either to donor countries or to the (multilateral
lending) institutions themselves," he said following a speech to the
Bretton Woods Committee.

For now, the details of the debt forgiveness are less important than
agreeing with other donor countries to "get out of this bad paradigm
where we're piling debt on (poor countries) - and it's not sustainable -
and denying them therefore access to private markets," Snow said

The Treasury secretary said movement to grants rather than unsustainable
loans is critical. He said he expects to discuss proposals in this
regard with other G7 representatives, particularly those from the U.K.
and France.

Snow said the private sector has an important role in sovereign debt
restructuring.

"We need to put in place, though, the conditions that will make that
happen, that will make the private sector want to engage with these
developing and poor countries," he said.

In this regard, the IMF and World Bank are making important strides in
improving the rule of law and good governance in developing countries,
Snow said. "Capital's a coward for good reasons," he said. "It only goes
where it's respected."

Asked about the potential for developing countries to "dollarize" their
economies, Snow said the U.S. considers that a sovereign choice but
generally prefers free currency exchange rates.

"Our broad view is fluctuating exchange rates are a good thing," he
said. "You can get those results with dollarization and so on, but the
basic concept of a currency that reflects underlying fundamentals, that
moves in accordance with those fundamentals, is very important."

Snow agreed that problems can arise when countries with sound
macroeconomic policies aren't able to engage in stimulative,
counter-cyclical spending during slowdowns the way the U.S. can.

He said the problem can be seen now in the Euro Zone which is
questioning whether it has "boxed itself in too much" with its stability
pact and from "any number of ministers from developing countries that
have talked to me ... about the need for counter-cyclical macroeconomic
policy."

Stimulative spending is a valid approach if "it's in this context of
fiscal responsibility," he said.

The U.S. government's current record nominal fiscal deficits are
fiscally responsible in the long-term, Snow said. "I think we're on a
path now to reduce that deficit, to cut it in half over the course of
the next five years and bring it to a level that's low by historical
standards," he said.

"I'm not one to argue that economies should put themselves in
straightjackets," he said. "I think they need some flexibility to
respond to the conditions they find themselves in."

-By Campion Walsh; Dow Jones Newswires; 202 862 9249;
campion.walsh@dowjones.com

Debt Relief Plan Eludes IMF Group
Issue Likely to Be Resolved Next Year

By Paul Blustein
Washington Post Staff Writer
Sunday, October 3, 2004; Page A28


Rich nations failed to agree at meetings this weekend on a plan for
canceling the debts the world's poorest countries owe to the World Bank
and International Monetary Fund. But top U.S. and British officials
voiced confidence that an accord will be struck next year to
dramatically expand debt relief for several dozen nations in sub-Saharan
Africa, Latin America and Asia.

The IMF's top policy-making committee issued a statement yesterday
pledging only "further consideration" of large-scale debt forgiveness
for poor nations, underlining that sharp differences remain over major
problems such as how to cancel debts without hurting the fund and the
bank. Nevertheless, Gordon Brown, Britain's chancellor of the exchequer
and a leading debt-relief champion, contended that the meetings had
helped to advance the cause of extending debt reduction for poor
countries well past the current levels of about 50 percent.

"There's a growing consensus that the next step is [to give poor
countries] up to 100 percent debt relief," Brown said at a news
conference, adding that although "there's a lot of work to be done," it
concerns "the detail" rather than the principle, and is likely to be
resolved in 2005. Britain, he said, chairs the Group of Seven major
industrial nations next year and will host the annual summit of leaders
from those countries plus Russia.

The Bush administration, which has been working on a debt-relief
proposal that departs from Brown's, also thinks that 2005 offers a
particularly promising time to forge a deal, said a senior U.S. Treasury
official who briefed reporters on condition of anonymity. He noted that
negotiations are scheduled then to discuss how much rich countries
should contribute over the following three years to the World Bank's
lending program for poor countries. The administration has used such
negotiations as leverage to change bank policies on previous occasions.

Granting 100 percent forgiveness to the world's "heavily indebted poor
countries" would go much further than previous plans that were launched
in 1996 and expanded in 1999 for nations such as Uganda, Bolivia and
Cameroon. Those plans, although initially hailed by aid advocates as
major breakthroughs, have failed to lift many of the two dozen or so
countries that qualified out of their debt traps. In some cases, as soon
as countries' debts were reduced, they experienced a new economic shock,
such as a drop in the price of an important export, so their debt
burdens remained high relative to their economic output.

Aid groups fervently lobbied for a new agreement at this weekend's
meetings, but even though that didn't happen, "we now think 100 percent
is inevitable," said Seth Amgott, a spokesman for Debt AIDS Trade
Africa, an organization founded by the rock star Bono to promote aid for
Africa. "We will be out of tinkering with a broken system. The existing
initiative, while it's generated substantial savings, doesn't free poor
countries from the cycle of debt."

But German Finance Minister Hans Eichel told reporters, "I do not agree
to proposals that the multilateral institutions should forgive debt."

Moreover, it is far from clear how the gap will bridged between the
approaches being promoted by Washington and London. Brown's plan would
involve billions of dollars in firm commitments by wealthy nations to
ensure that the World Bank has the funds to keep providing aid. The
commitments envisioned in the U.S. plan are much flimsier, and
Washington's proposal also includes the idea of replacing many World
Bank loans with grants, which some critics fear would weaken the bank.

On the related issue of forgiving Iraq's debt, the United States
remained at odds with other nations, particularly France, over how much
of Baghdad's roughly $120 billion debt should be written off. The Bush
administration contends that a write-off of between 90 and 95 percent is
required to give the Iraqi economy a chance to flourish, while major
creditors such as France, Russia and Germany have said a reduction of
about 50 percent is in order.

Formal negotiations between Iraq and its creditors haven't begun yet
because to get such debt relief a country needs to have struck an
agreement on its economic policies with the IMF, and the fund only
approved Iraq's program on Wednesday. Reiterating previous U.S.
assertions that a debt deal for Iraq is possible by year's end, Treasury
Secretary John W. Snow told a news conference yesterday, "I sense broad
agreement on the large proposition" that the bulk of the debt must be
forgiven. French Finance Minister Nicholas Sarkozy told reporters that
differences have narrowed.

The issue of debt forgiveness for Iraq is different from the questions
surrounding poor nations because Iraq owes almost all of its debt to
individual governments while the vast bulk of the debt burdening poor
nations is owed to the IMF, the World Bank and other multilateral
lenders. But politically, the two issues have become linked, with France
and Germany in particular questioning why Iraq should get much greater
relief than countries whose people are much poorer. Resolving the
poor-country debt problem would help address that objection, although
U.S. officials assert that the two issues should be treated separately.


 From Jubilee USA Network:
Dear supporters and friends of Jubilee USA --

It is with some disappointment that I report to you that the G-7 have
failed to take action on debt cancellation today. The section on debt
from the statement just released by G7 Finance Ministers is just two
lines, and it reads as follows:

"We are now committed to addressing the sustainability of debt of the
poorest countries by making progress on debt relief and grant financing.
We will prepare a progress report on these efforts by the end of the year."

See the full statement at:
http://www.treas.gov/press/releases/js1979.htm

It is a vague statement, and the G7 have failed to act today on full
debt cancellation for impoverished nations. This was not wholly
unexpected -- news reports in recent days highlighted strong
disagreements within the G7 on how to proceed.

But before we get too discouraged, we must remember two things:

(1) The debate on debt has moved forward incredibly in the past 4
months, thanks to you and all of our work. What have we gotten?
* A public, written commitment from the US and UK governments in support
of 100% debt cancellation;
* Support from both Presidential candidates in the US for 100%
multilateral debt cancellation for impoverished countries;
* A bill introduced in the US Congress which would legislate what the G7
and others failed to act on today;
* A national discussion -- in the media and elsewhere -- on debt
cancellation at a level not seen since the year 2000. Today's excellent
editorial in the New York Times is just one example of the media
coverage that this issue has received in the past few weeks;
* Not to mention tons of new interest and energy among organizers and
activists across the country and around the world...

(2) We are going to keep the pressure on. We've come too far to stop
now. The US retains the presidency of the G8 through the end of the
year. G7 Finance Ministers meet again in February 2005. These are dates
around which we will push forward. We will see 100% debt cancellation.
The delay is a real setback. But it will not stop us.

Below, you will find Jubilee USA's statement in response to the G7's
failure to act today. You will also find a report from today's wonderful
and energetic rally in Washington outside the US Treasury department.
You can see photos at www.jubileeusa.org.

Thanks to everyone for your incredible work in this Countdown to Freedom
from Debt campaign. The countdown may be over, but our work is not, and
our commitment is no less.

- Neil Watkins, for all the Jubilee USA staff -- Marie, Jakeya, and Morriga=
n

Below:

1) Jubilee USA Statement on G7 Failure to Take Action
2) Jubilee USA Release on Rally Held Outside the G7 Finance MInisters
meeting today. Pictures at www.jubileeusa.org.


+++++++++++

JUBILEE USA NETWORK

For Immediate Release =96 October 1, 2004

Contact: Neil Watkins 202-421-1023
Marie Clarke 202-255-7849


G7 Ministers Fail to Take Action on Poor Country Debt Cancellation

G7 Must Return to Negotiating Table: Impact of Debt Crisis on Human Life
Too Great to Delay

WASHINGTON =96 G7 Finance Ministers ended their meeting in Washington
today without coming to an agreement on debt cancellation for
impoverished nations.

=93It is outrageous that the G7 have failed to answer the moral imperative
of debt cancellation in the face of the HIV/AIDS pandemic and especially
as progress towards meeting the Millennium Development Goals diminishes
each day,=94 said Marie Clarke, National Coordinator of Jubilee USA Network=
.

The Financial Times and other media reports in recent days had indicated
that though G7 nations agree that more must be done to cancel poor
country debt, negotiations had bogged down over questions of how to
finance a deal, over differences in approach between the UK and the US
governments, and political considerations.

=93It is a real shame that the richest nations were divided over how to
cover the minimal cost of impoverished country debt to wealthy creditors
like the IMF and World Bank, especially when the IMF is sitting on a
mountain of unused gold,=94 said Clarke. A report released by Debt and
Development Ireland on Wednesday found that responsible sale of IMF gold
could raise $30 billion for poor country debt cancellation.

The G-7 communiqu=E9 states that G-7 leaders will issue a progress report
on debt relief by the end of the year. Jubilee USA Network calls on the
G-7 to remember the costs, in human lives, of the debt crisis, and to
take urgent action.

=93Efforts to provide full, multilateral debt cancellation for all
impoverished nations must be measured in days, rather than weeks or
months,=94 said Clarke. =93Each day the G-7 delays, 8,000 people die due to
HIV/AIDS, and 30,000 people die due to preventable diseases. Full debt
cancellation would go along way to addressing these crises, and the
G-7=92s failure to act today is inexcusable.=94
###




IMF =96 Expanded Powers

IMF Plan To Promote Good Econ Policy Gets Cool Reception
By JOSEPH REBELLO
October 1, 2004 5:40 p.m.

Of DOW JONES NEWSWIRES

WASHINGTON -- An International Monetary Fund proposal to issue public
praise for countries that follow sound economic policies and don't want
to borrow from the agency has gotten a cool reception from IMF
shareholders - especially the poorest ones.

The IMF unveiled the surveillance proposal Friday - but finance
ministers from the world's poorest nations denounced it even before the
IMF could organize a press release. In a statement, the Group of 24
ministers said the proposal would set the stage for "minimizing lending
to low-income countries."

The IMF said the proposal wouldn't be forced on its members - nations
would instead volunteer for it. But the G24 ministers weren't reassured.
"While the instrument has been presented as 'voluntary,' there is a high
probability that it would in fact become a requirement for lending,
grants, and debt relief," the G24 ministers said.

The IMF is a lender of last resort to countries suffering financial
crises, but its charter also requires it to provide economic
"surveillance" of the 184 nations that make up the organization. The
agency has historically had problems with that requirement - blowing the
whistle on a country with poor policies might help avert a financial
crisis by spurring reforms. But it might also trigger a crisis by
frightening investors.

That prospect has made developing nations unwilling to sign up for all
but the most basic of surveillance programs the IMF has set up in recent
years. In 1999, for example, the agency set up what it called its
Contingent Credit Lines program, which it offered to countries with
sound economic policies that were at risk of financial "contagion" from
similar countries with poor policies.

But few countries signed up for it, and the program expired last year.
"Members feared that an arrangement providing for CCL resources would be
regarded as a sign of weakness rather than strength," the IMF said in a
recent review of its surveillance programs.

The IMF innovation unveiled Friday was aimed in part at creating "a
possible successor to the Contingent Credit Lines," the agency said. The
new program - tentatively called the Policy Monitoring Arrangement -
would be available to countries with sound policies that don't want to
borrow from the IMF but see a benefit to frequent IMF statements "to
donors, creditors and the general public about the strength of these
policies."

The IMF 's executive board, reviewing the proposal last week, wasn't
exactly enthusiastic. Some IMF directors called the idea "timely." But
others complained they didn't get enough time to study it and, citing
the troubled history of IMF surveillance programs, recommended that the
agency not make it a top priority for now. Instead, they said, IMF staff
should simply "pursue consultations with potential users, donors, and
private market participants to ascertain the usefulness and potential
demand" for the PMA program.

The G24 ministers, however, condemned it outright, calling the PMA
program "contrary to the purposes of the IMF as an institution of
international monetary cooperation."

"Ministers question the benefits of creating an instrument for signaling
purposes, such as the proposed Policy Monitoring Arrangement," they said
in their statement. "Such an instrument would be inferior to existing
precautionary arrangements that allow countries to borrow in case of need."



Rally / Vigil

Sept. 29, 2004
GLOBAL JUSTICE ACTIVISTS TO VIGIL OVERNIGHT OUTSIDE
IMF/WORLD BANK ANNUAL MEETINGS
Watching & Waiting for 100% Cancellation of Multilateral Debts

WASHINGTON =96 Campaigners for debt cancellation and justice in the global
economy will hold an overnight vigil outside the 60th anniversary annual
meetings of the IMF and World Bank from 2:30 pm on Friday, October 1st
to 6:00 pm on Saturday, October 2nd.

Media reports over the last two weeks suggest an active debate among G7
finance ministries about how to more effectively tackle the debt crisis,
which has plagued most of the countries of Africa and many of those in
Latin America, the Caribbean, and Asia-Pacific for 25 years. The World
Bank recently completed a second report detailing the inadequacy of its
joint program, the Heavily Indebted Poor Countries (HIPC) initiative, to
deal with the problem.

=93We know that the G7 finance ministers will discuss debt cancellation on
Friday, and that any proposals have to be ratified at the annual
meetings,=94 said Marie Dennis, co-chair of the Religious Working Group on
the World Bank and IMF, a coalition of faith-based organizations working
for global economic justice. =93We also know,=94 said Dennis, =93that one o=
f
the proposals would be a substantial breakthrough: cancellation of 100%
of the debts claimed by the IMF, the World Bank, and other multilateral
institutions from about 30 of the world=92s most impoverished countries.
We will be watching and waiting, hoping that these powerful people will
at last take bold steps to free some of the world=92s most impoverished
people from debt slavery.=94

=93The biggest threat to progress is now not a refusal to acknowledge the
dimensions of the crisis, but squabbling over which wealthy country will
get credit for its resolution,=94 said Njoki Njoroge Njehu, Director of
the 50 Years Is Enough Network, a coalition dedicated to the fundamental
transformation of the IMF and the World Bank. =93An African saying holds
that when two elephants fight, it is the grass that gets hurt. People in
indebted countries cannot and should not have to stand any more hurt.=94

Salih Booker, Executive Director of Africa Action, the oldest U.S. group
advocating for African causes, added, =93We urge all the G7 leaders to
focus on solving this crisis. The good news is this can be done easily
and immediately. It has been demonstrated that the massive gold reserves
of the IMF can comfortably finance the cancellation without affecting
the financial status of any government or institution. In these
circumstances, it would be irresponsible for these leaders to leave
Washington with the status quo =96 impoverished countries paying more in
debt service than they receive in aid =96 intact. After years of
devastation, the boards of these institutions can give people in
impoverished countries something to celebrate on their 60th anniversary.=94

The vigil is co-sponsored by the 50 Years Is Enough Network, the
Religious Working Group on the World Bank and IMF, Jubilee USA Network,
Africa Action, and Pax Christi Metro DC.

Vigil Location: Murrow Park, 18th St. & Pennsylvania Ave., N.W. =96
Washington, DC
Vigil Begins 2:30 pm Friday; Opening Statements 4:00 pm Friday
Delivery of Thousands of pro-cancellation messages to the World Bank
10:30 am Saturday
Closing Ceremony & Statements: 4:00 =96 6:00 pm Saturday
Reporters and others are invited join the vigilers at any time to learn
more about the
global campaigns for justice and debt cancellation.



For Immediate Release =96 October 1, 2004

Contact: Neil Watkins 202-421-1023 / Marie Clarke 202-255-7849

Jubilee USA Holds Rally at G-7 Finance Ministers Meeting, Calls on
Leaders to Act on 100% Debt Cancellation

Debt Campaigners Urge G7 Not to Delay: Lives in the Balance

WASHINGTON - As G7 Finance Ministers entered their meeting this
afternoon in Washington, activists gathered outside of the US Treasury
Department to urge G7 leaders to support 100% debt cancellation for
impoverished nations.

Participants called on the US government and other G7 nations to come to
an agreement on 100% debt cancellation as soon as possible. "As G7
Finance Ministers gather in Washington this afternoon, we issue an
urgent call to G7 nations, and in particular our own government, to work
in the spirit of multilateral cooperation and compromise to achieve a
deal on 100% debt cancellation for impoverished nations at this meeting,
or soon thereafter. Debt costs lives, and it is morally unconscionable
to delay,=94 said Marie Clarke, National Coordinator of Jubilee USA Network=
.

The Financial Times and other media reports in recent days have
indicated that though G7 nations agree that more must be done to cancel
poor country debt, negotiations have bogged down over questions of how
to finance a deal and over differences in approach between the UK and
the US governments.

=93The sale of IMF gold is an approach to financing poor country debt
cancellation that should please all G7 nations,=94 said Clarke. =93This
approach would not affect the IMF's ability to lend nor would it cost
taxpayers in rich countries additional money. Unlike other possible
resources within the institutions, the gold provides additional
resources for impoverished nations while requiring the IMF to finance
its fair share of debt cancellation. A report released on Wednesday by
Debt and Development Ireland shows that there is enough IMF gold to
finance both the IMF and World Bank share of the debt cancellation.=94

Jubilee USA Network finds that financing through gold could be the best
way to reach a deal in the immediate term as nations go through the
longer process of identifying how to increase overall aid appropriations
to meet development challenges.

"We call on Treasury Secretary John Snow, UK Chancellor Gordon Brown,
and Finance Ministers from the rest of the G7 nations to negotiate today
and beyond in order to reach points of compromise to accomplish 100%
cancellation of impoverished nation debt,=94 said Clarke.

=93The consequences of a delay on 100% debt cancellation for impoverished
nations are grave. In 1 month, 240,000 people die of AIDS and almost 1
million children will die of preventable diseases, in 2 months, almost a
half million people will die of AIDS and 2 million children will loose
their lives to preventable diseases. We know that interim debt relief
has more than doubled poverty reduction expenditures in eligible
countries. Do not delay. G7, cancel 100% of the debt now,=94 said Clarke.



Economic, War Policies Faulted in Hushed Vigils
D.C. Street Closures, Security to Continue Today

By Manny Fernandez and Monte Reel
Washington Post Staff Writers
Sunday, October 3, 2004; Page C03

Protesters against global capitalism and the war in Iraq held twin
demonstrations in Washington yesterday, carrying cardboard coffins and
bowing their heads in prayer amid intense police security downtown.

Both events were quiet, solemn gatherings that together drew several
hundred people, far fewer than have rallied at antiwar and
anti-globalization demonstrations in the city in recent yearsOutside the
International Monetary Fund and World Bank buildings in Foggy Bottom in
the morning, about two dozen people, continuing a vigil begun Friday
afternoon, called for debt cancellation for the world's poorest
countries. At noon, across the Potomac River, peace activists, military
family members and a few hundred others marched from Arlington National
Cemetery to the Ellipse south of the White House, displaying makeshift
coffins to symbolize the human toll of the war in Iraq.

About 4:45 p.m., 28 were arrested for entering a closed area on the
Ellipse, a planned act of civil disobedience, a spokesman for the U.S.
Park Police said.

Scores of local and federal police officers monitored both
demonstrations and established a security zone around the World Bank and
IMF buildings, where the institutions were beginning their annual
two-day meetings. Identification checkpoints were set up, and more than
two dozen blocks were closed off by Jersey barriers or metal fencing
about four feet high.

D.C. police officials said the precautions were necessary not because of
the protests but because of the increased terrorism-threat level at the
IMF and World Bank, which homeland security officials announced in August.

Five city snowplow trucks were parked end-to-front along Pennsylvania
Avenue NW outside the glass facade of the World Bank. Although
protesters said they didn't know of plans for demonstrations today, the
streets were scheduled to remain blocked.

Some people entering the security zone were checked by officers with
metal-detector wands. Some tourists appeared bewildered by the maze of
fences and peppered officers with questions about how they could get out.

"It's certainly disproportionate to any kind of activity we've ever
contemplated or announced," said Robert Weissman, 38, co-director of the
corporate accountability group Essential Action and a longtime critic of
the IMF and World Bank. "This was just going to be a small, low-key vigil."

Weissman was one of about two dozen protesters who assembled at a park
outside the two institutions in the morning. The gathering's tone was
quieter than previous IMF and World Bank demonstrations'. Five
University of Maryland students sat in a circle on the grass and
whispered prayers. Other protesters laid out white wooden crosses, with
the names and debts of countries written in black pen: "Bolivia $4.8
billion," "Tanzania $7.2 billion," "Ethiopia $6.5 billion."

Activists said they wanted their 27-hour vigil to highlight the urgency
of the debt crisis. The Bush administration and U.S. Treasury officials
have been pushing to dramatically increase debt relief programs for at
least 27 poor nations, including Uganda and Bolivia, a move that has
been both supported and criticized.

Shortly after 10:30 a.m., Marie Clarke, 28, national coordinator with
the Jubilee USA Network, one of the vigil organizers, gave a World Bank
director who came to the protest area a mail bin filled with 1,900 cards
signed by churchgoers, union organizers and environmental activists
urging 100 percent debt cancellation.

"We also share the sense of concern with the debt burden," Katherine
Marshall, the director, told Clarke in a brief but polite encounter.

At Arlington, antiwar activists carried 100 black cardboard coffins to
their rally site on the Ellipse, where 1,000 coffins had already been
assembled. Tracy DiMambro, of the Iraq Pledge of Resistance, one of the
event's sponsors, said, "We are mourning the dead while calling for an
end to the war."

During their march, the demonstrators were accompanied by dozens of U.S.
Park Police officers, who stopped traffic and monitored them from atop
motorcycles and horses. The procession was largely silent, punctuated by
somber drumbeats and few chants.

During rallies before the march outside the cemetery and afterward on
the Ellipse, speakers derided the Bush administration's policies as they
eulogized sons, daughters, brothers and friends who were killed or
wounded in Iraq. "I can't sit here in my grief and let another mother go
through what I'm going through," said Cindy Sheehan, of Vacaville,
Calif., the mother of Casey Austin Sheehan, a 24-year-old Army
specialist who was killed in Iraq in April. "[My son] died for someone
who wouldn't even fight for his country."

As the demonstrators left the cemetery and marched toward Arlington
Memorial Bridge, they passed a group of about 25 counterprotesters who
were waiting for them with signs and bullhorns. Kristinn Taylor,
co-leader of the D.C. chapter of Free Republic, was helping to hold up a
large sign that read, "Go to Hell Traitors: You Dishonor Our Dead on
Hallowed Ground."

Staff writer David Snyder contributed to this report.



D.C. as Host of IMF, World Bank Talks Raises Questions
Monday, October 4, 2004; Page E02
Washington Post

Washington's future as the host city for annual meetings of the
International Monetary Fund and World Bank may be in doubt, according to
officials of the two institutions interviewed during a weekend meeting.

A number of delegates and bankers from foreign countries are unhappy
that the official part of the meetings has been compressed to one
weekend, the officials said. The decision to shorten the meetings was
taken in 2001 because of security concerns from protests and the 9/11
attacks.



The meetings used to run over five days and offered plenty of
opportunities for get-togethers between officials from developing
countries and their bankers, as well as with IMF and World Bank
staffers. But now long meetings are only possible during gatherings like
those held every third year outside the United States.

Moving the meetings out of Washington would be a revenue blow to local
hotels, restaurants and limo services. Some delegates and officials
attending the weekend gathering expressed satisfaction with Washington
and said they don't expect the meetings to be moved. But Rodrigo de
Rato, the IMF's managing director, was noncommital when asked at
yesterday's closing news conference whether consideration was being
given to holding more meetings abroad. He thanked Washington for its
hospitality, but said, "Right now, I cannot give you an answer," adding
that "there are certainly some problems" with security and inconvenience.=
=94