[stop-imf] Lawmakers press IMF on G8 poor country debt deal

[Robert Weissman]

Lawmakers press IMF on G8 poor country debt deal
Mon Dec 19, 2005 5:37 PM ET

By Laura MacInnis

WASHINGTON (Reuters) - U.S. lawmakers on Monday urged the International
Monetary Fund to erase the debts of 18 poor countries, as mandated by
the Group of Eight nations, while aid groups warned the deal may be
under threat.

Six members of the House of Representatives Financial Services and
International Relations panels, including Iowa Republican James Leach
and California Democrat Maxine Waters, wrote to IMF Managing Director
Rodrigo Rato urging the fund to cancel the debts "without further delays
or conditions."

"We are deeply concerned that the IMF is now back-tracking on this
commitment," they said in the letter, a copy of which was also sent to
U.S. Treasury Secretary John Snow.

Development activists and aid groups have warned that debt forgiveness
pledged to 18 of the world's poorest nations may not emerge from an IMF
board meeting on Wednesday in the form envisioned at a G8 leaders'
summit in Scotland this summer.

Oxfam and Jubilee USA said six nations -- Ethiopia, Madagascar,
Mauritania, Nicaragua, Senegal and Rwanda -- may have to wait for their
debt write-offs until they meet certain economic goals mandated by the IMF.

Others slated to receive debt relief from the IMF, World Bank and
African Development Bank under the G8 deal are Benin, Bolivia, Burkina
Faso, Zambia, Uganda, Cambodia, Tajiksitan, Ghana, Honduras, Guyana,
Niger and Mali.

IMF spokeswoman Gita Bhatt said that to qualify for the 100 percent debt
relief, countries need to show good performance in macroeconomic
policies, poverty reduction measures and public expenditure management.

"Which countries qualify will only be decided by the board," she said.

Mark Allen, the IMF's director for policy development, said last week
the "spot check" is not meant to create new hurdles, but instead to
ensure economic conditions have not eroded since a program qualifying
them for debt relief ended.

"What we are doing is checking that the situation as of the completion
points remains, broadly speaking, the situation still faced by those
countries," he said.

Still, Oxfam policy advisor Max Lawson said the potential stumbling
block amounts to "the most negative interpretation of the words that
were used at the G8," where rich nations pledged debt cancellation after
a series of "Live 8" concerts heightened global focus on the issue.

U2 rocker and humanitarian Bono was this week named Time Magazine's
"Person of the Year," along with philanthropists Bill and Melinda Gates,
for his role brokering the G8 deal.

Oxfam's Lawson said debt forgiveness should apply to all 18 countries in
January so funds can go immediately to schools, hospitals, and other
pressing needs.