[stop-imf] IMF says G8 debt forgiveness plan still on track

[Robert Weissman]

IMF says G8 debt forgiveness plan still on track
Wed Sep 14, 2005 8:24 AM GMT168





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WASHINGTON (Reuters) - The International Monetary Fund on Tuesday
shrugged off speculation that a highly touted proposal on debt relief
would meet resistance at annual meetings of the IMF and World Bank later
this month.

Leaders of the Group of Eight rich nations -- Britain, the United
States, Germany, France, Japan, Italy, Canada and Russia -- proposed in
July to erase the debts some poor countries owe the World Bank, IMF and
African Development Bank.

The likely cost of the proposal has provoked concerns, particularly at
the World Bank where some worry the deal could drain resources needed
for lending to poor countries.

A World Bank report obtained by Reuters last month said the deal could
strain its International Development Association, which offers low-cost
loans and grants to poor countries.

According to spokesman Thomas Dawson, the IMF has earmarked possible
sources of funds for the debt relief and is more focused on technical
aspects of the proposal.

"It's a different issue than with other institutions. We are largely
dealing with financing that already is within the fund, it's a question
of how it's allocated," he said.

Still, Dawson said he expected talks on the deal to progress well at the
lenders' September 24-25 meetings in Washington.

"I certainly do not see, from the fund's point of view, that anything is
falling apart. In fact, I don't even think that things are off track,"
Dawson said.

"As far as I can see, we are essentially on track for the timetable that
was set by the G8 finance ministers calling for the fund to consider
their proposal at the meetings."