[stop-imf] G-8 Reactions: Jubilee Research, ISODEC-Ghana, Philippines' daily paper

[robert weissman]

From: =09Debayani Kar <debi@jubileeusa.org>


A range of reactions to the G-8 from groups around the world:

/Jubilee Research analysis of G-8 deal

/(excerpt)
There is a danger that the flurry of publicity surrounding the deal,
which hails it as a =91historic breakthrough=92 in debt cancellation
representing a =91victory for millions=92, may obscure the fact that there
is a very long way to go before the developing world can be lifted out
of poverty. It has been clear for 20 years that many indebted countries
were effectively insolvent and required their debts to be written off,
and that the debt problem itself was part of a systemic failure of the
present economic system. Until a fundamental reform of international
finance and trade is undertaken, debt cancellation =96 though necessary in
the short term =96 can only address the symptoms and not the cause of
chronic poverty in the developing world. In the absence of such
comprehensive changes, the high hopes of debt campaigners will
ultimately be disappointed.

Full text: http://www.jubileeresearch.org/latest/debtrelief0605.htm

/ISODEC-Ghana Press Statement on G-8 deal

/(excerpt)
The Integrated Social Development Centre (ISODEC) welcomes the news of
the G-8=92s
decision to cancel Ghana=92s $4.1 bn. multilateral debt, representing
about 89% of the
country=92s external debt stock, along with 17 other heavily indebted
countries, 14 of who are
in Africa. We welcome the news because it represents yet another victory
in our push for
total and unconditional debt cancellation; and especially, given that
multilateral debt
constitute the largest portion of Third World debt. We will however
caution against
complacence, as the fight against poverty and the flawed world economic
order, which
perpetuates the poverty status of many developing countries, is far from
over.

Full text: http://www.isodec.org.gh/Papers/Multilateraldebt-cancellation.PD=
F

/Philippines Daily Inquirer lead editorial on G-8 deal




This story was taken from www.inq7.net
http://news.inq7.net/opinion/index.php?index=3D2&story_id=3D40451

Debt relief
First posted 01:28am (Mla time) June 16, 2005
By
Inquirer News Service

View full-size editorial cartoon

IN WHAT has been widely hailed as a historic agreement, the world's
richest nations last Saturday canceled $40 billion in debts owed by 18
of the world's poorest nations. During their two-day meeting in London,
the finance ministers of the Group of Eight decided to "meet the full
cost" of writing off these countries' debts from the World Bank, the
International Monetary Fund and the African Development Bank. Nine other
countries will qualify for similar debt relief within the next 18
months, after which 11 more will be included in the list, bringing the
total debt write-off to $55 billion.

Officials of the countries which stand to benefit from the program have
generally welcomed the agreement, although some complained that it was
too little and too late. Rock singer Bono, who has been in the forefront
of the international campaign for international debt relief, said the
deal was "a little piece of history," but conceded that "millions of
lives will be changed by the news."

That is understating it a bit. Millions of Africa's starving people will
be saved by lifting the debt burden, which has greatly slowed down the
efforts of these countries to develop. Many more will survive and even
live more comfortable lives if the G-8 would follow it up with other
measures, like increasing the level of aid to these poor nations and
opening up their own markets to agricultural exports from the same
countries.

Before all those things, what the G-8 needs to do is to ensure that the
billions saved from debt payments will not merely line the pockets of
dictators and other officials of these poor nations. As one analyst has
suggested, a mechanism must be put in place "to ensure the savings on
debt are spent wisely" because government corruption and inefficiency
are "the main factors why these countries remain poor."

The rich nations are aware of this problem and recognize the need to put
up safeguards. The United States, for one, had earlier announced that
debt relief would be linked to "improving governance, reducing
corruption and completing a program with the IMF that demonstrates a
commitment to sound economic policy." But while no one will dispute the
necessity of improving government efficiency and reducing corruption,
there are bound to be problems with regard to IMF prescriptions that
have once too often proven ineffective as well as intrusive. Malaysian
Foreign Minister Syed Hamid Albar said the G-8 debt relief program
"should not be subject to conditionalities that would undermine the
sovereignty of a state."

Despite such reservations, not a few nations have come forward to demand
that they be counted among the world's poorest nations. Unless the rich
nations suffer from a sadistic streak, they should consider expanding
the program to include those countries that are being weighed down by a
huge debt burden that is getting heavier every year. For while they may
not be counted yet among the world's poorest, they are getting there
surely and quickly. And this is mainly because servicing their debts
takes up a huge chunk of their budgets, leaving little for education,
health, infrastructure and other development projects.

This is the situation in which the Philippines is caught. With the
government indebted to the tune of P3.9 trillion, it has to set aside
fully one-third of its P901-billion budget for 2005, or P301.7 billion,
just to pay the interest. Take away the share of local governments
amounting to P151 billion as well as the salaries of government workers
amounting to P290 billion, and all that is left for building roads,
schools and other infrastructure is P72 billion. How can a country that
invests so little on social and economic development ever move out of
the debt trap and move forward?

It may be too much to expect the country's creditors to write off all
its debt. If the rich nations were to extend this privilege to every
debtor-nation, the IMF, the World Bank and other international financial
institutions would probably have to shut down. But now that they have
seen the urgency of extending debt relief to the poorest nations, they
should also consider a similar program for other heavily indebted nations.

It doesn't have to be a complete write-off. In the Philippines, for
instance, a good start would be the condonation of loans tainted with
fraud, like the financing for the construction of the Bataan Nuclear
Power Plant that has never been used. That is what's needed to give the
country a better shot at development. And it is also what justice demands.


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