50 Years Update on Debt Initiatives

[Robert Weissman <rob@essential.org>]

This excellent analysis of global debt cancellation or relief initiatives
comes from the 50 Years is Enough Network.

> 50 Years Is Enough: U.S. Network for Global Economic Justice
> 1247 E Street, S.E. - Washington, DC  20003 USA - 202/544-9355 - fax
> 202/544-9359
> March 23, 1999
>
> Update on Debt Initiatives
>
> 	The last couple months have brought forth an unprecedented number of
> proposals from governments and politicians regarding international debt.
> While the issue has long been given lip service by the IMF and World Bank
> and by the Finance Ministries and Treasury Departments of the  G-7
> countries, there is now, suddenly, a race by the various governments to
> prove their seriousness and compassion.
>
> 	This is not to say that we necessarily think they are motivated chiefly
by
> compassion.  That may indeed be a significant factor for some of the
actors,
> but of course in politics a good heart is seldom sufficient to get things
> done.  What has made this moment possible is the hard campaigning of the
> international Jubilee 2000 movement, as well as the analysis and
organizing
> done by dozens of groups in advance of and parallel with that movement.
The
> world's political leaders are now paying attention.  We will have to keep
> the pressure on and make some quick calculations as we are confronted with
> opponents awakened by the seriousness of our opportunity and the potential
> manipulations of some very successful politicians.
>
> 	Chancellor Schröder, the official host of the G-7 Summit this June in
> Cologne (Köln), has indicated that debt will be a major topic on the
agenda
> (unless, as so often happens, some terrorist incident occurs or the U.S.
> tees off on Saddam in the preceding week and diverts all attention). The
> German, French, U.S, and U.K. governments have all put forth interesting
> proposals.  In addition, there are a number of bills in Congress which
would
> also institute serious changes in U.S. policy on debt..
>
> 	This lengthy update attempts to summarize the content and status of the
> various new proposals, with an emphasis on the U.S. developments.  The 50
> Years Is Enough Network has played a part in formulating and debating some
> of the U.S. proposals; no attempt will be made to conceal our positions.
The
> centrality of debt to the struggle for economic justice, and the emphasis
50
> Years has placed on it since our founding in 1994, is evident from the
> principles expressed in our platform (see our web site, www.50years.org
> <http://www.50years.org>)
>
> The following items will be reviewed here:
>
> 1. The "HOPE for Africa Act" proposed by Rep. Jesse Jackson Jr.
> 2. Provisions countries devastated by Hurricane Mitch
> 3. The "Debt Relief for Poverty Reduction Act" proposed by Rep. Jim Leach
> 4. The proposals made by President Clinton at a meeting of African
officials
> in Washington
> 5. The "Global Sustainable Development Resolution of 1999" of Rep. Bernie
> Sanders
> 6. Proposal by Chancellor Schröder of Germany
> 7. Proposal and statements from the U.K. government
> 8. The French idea
>
>
>
> 1.  THE "HOPE FOR AFRICA" ACT - PROPOSED BY REP. JESSE JACKSON JR.
>
> Last year a bill known as the Africa Growth & Opportunity Act (AGOA) was
> passed by the U.S. House of Representatives but died in the Senate.  Its
> supporters, including the Clinton Administration and many Republicans,
> announced that they intended to try again this year.
>
> The AGOA was, and is, basically a "free-trade" NAFTA-style bill.  It is
> designed to ease the path of transnational corporations into Africa, and
has
> few guarantees that any Africans would benefit from the resulting trade.
It
> also mandates that any country wishing to trade with the U.S. under its
> provisions adhere to IMF structural adjustment conditions.  Many
supporters
> of Africa in Congress endorsed it for a time (though many later withdrew
> their endorsement when they learned more about it).  For 1999, opponents
of
> the AGOA decided that a trade bill for Africa was in itself a good idea,
and
> that they could draft one that actually benefits ordinary Africans --
rather
> than the corporations that are the main beneficiaries of AGOA.  That bill
> became the HOPE for Africa bill; the acronym HOPE stands for Human Rights,
> Opportunity, Partnership, and Empowerment.  It includes several innovative
> trade provisions to benefit producers on the continent while guaranteeing
> that any imports would be made with African labor and in facilities with
> substantial African ownership. It also includes labor and environmental
> protections absent from AGOA. Its centerpiece, however, is debt
> cancellation.  The decision to put debt at the center of this trade bill
> emerged from the recognition that until the continent's overwhelming debt
> servicing problems -- it pays about 20% of its annual export income on
debt
> service -- are addressed, the prospects of creating equitable and
productive
> trading relationships were slim.
>
> In terms of debt, the HOPE bill calls for the following:  cancellation of
> the bilateral debts owed to the U.S. by sub-Saharan African countries;
> enforced, meaningful advocacy for cancellation of multilateral debt by the
> U.S. representatives to the World Bank and IMF; and the purchase of
private
> debts of sub-Saharan African countries at market values so that they can
be
> canceled along with other bilateral debt.  To elaborate on this last
> measure:  Congress cannot, of course, mandate that private entities cancel
> debts owed them.  It can, however, call for the government to purchase the
> private debts at market price (i.e. what banks can already sell the debt
for
> on open markets, usually about 10% of its face value).  Because the banks
> would not be getting any lost value restored, the transactions would not
be
> bailouts but transfers from the private to the public sphere.
>
> The HOPE for Africa bill's original sponsor is Rep. Jesse Jackson Jr. of
> Chicago.  He has been joined by 59 co-sponsors as of this writing, all
of
> them Democrats.  The AGOA has 33 Democratic co-sponsors.  It appears that
> the appeal of the HOPE bill has stalled the AGOA, and also catapulted debt
> to the center of discussion about Africa and about international trade.
Its
> debt provisions are probably the most progressive ever proposed in U.S.
> legislation with more than token support.  It is uncertain at this time
how
> Congress will move forward with the two competing Africa trade bills.  For
> more details on the HOPE bill and its current status, check Rep. Jackson's
> web site, www.jessejacksonjr.org <http://www.jessejacksonjr.org>, and
search
> with the keyword "Africa."
>
>
> 2.  PROVISIONS FOR COUNTRIES HIT BY HURRICANE MITCH
>
> In February President Clinton proposed a $956 million emergency bill to
> address the devastation caused by Hurricane Mitch in Central America and
> Hurricane Georges in the Caribbean. (The bill actually represents about
$613
> in new relief for the region, the rest being reimbursements for monies
> already disbursed.) His proposal includes some modest provisions for debt
> relief for Nicaragua and Honduras.
>
> No one, it seems, argues with the proposition that the debt of the two
> countries worst hit by Hurricane Mitch, Honduras and Nicaragua, has to be
> dealt with in an exceptional way if they are to have a chance of real
> recovery from their worst natural disaster of the century. These two
> countries were already facing massive debt burdens that were stifling any
> hope of economic development before the hurricane. Unfortunately, the
> President's proposal does not go nearly as far as it could or should have.
>
> At the emergency December meeting in Washington of donors to Central
America
> and a nearly-simultaneous meeting of the Paris Club of creditor countries,
> the richest countries agreed to a moratorium on both bilateral and
> multilateral debt payments for the two countries lasting until February
> 2001.  They did not, however, agree to forego interest payments on the
> bilateral debt during that time, meaning that the interest will be
> capitalized and the countries will owe even more when they emerge from the
> moratorium.  They pledged to consider granting Nicaragua forgiveness of
80%
> of its bilateral debt and Honduras 67% of its bilateral debt.  As far as
we
> can tell, however, that forgiveness would not be approved until the
> moratorium ends, and would likely apply only to debt contracted before the
> "cut-off date" -- the time when the countries first won rescheduling from
> the Paris Club (1988 for Nicaragua; 1990 for Honduras).  The provisions
for
> debt relief in the President's bill would cover those pledges for debt
> relief, and actually a little more -- 90% cancellation of Nicaragua's
> bilateral debt to the U.S.  It would also provide a $25 million
contribution
> to the trust fund set up by the World Bank to pay off the multilateral
debts
> owed by the two countries during the moratorium (since there is no
official
> way to halt or cancel multilateral payments without defaulting).  The
total
> amount budgeted for debt relief in the emergency bill is $41 million.
>
> After a great deal of political wrangling, the House is now expected to
vote
> on the bill on Wednesday, March 24.  At one point Rep. Nancy Pelosi
proposed
> the addition of $25.5 million, which is all that would be required to
fully
> cancel all bilateral debt owed the U.S. by Honduras and Nicaragua.  That
> amount would cancel over $250 million worth of debt owed by the two
nations,
> and, more important than the amount of debt canceled, would set an
important
> example for responding to the hurricane by the world's leading economy.
> That idea was rejected by the House Appropriations Committee, and will not
> be offered as an amendment when the full House votes on the bill.   We
hope,
> however, that the concept of debt cancellation, and how relatively
> inexpensive it would be to take that very significant step toward real,
> sustainable recovery and development in Central America, will be discussed
> in the debate before the vote.  (As a measure of the low cost of debt
> cancellation, consider that the bill also includes $56 million for
> incidental training of U.S. military forces in Honduras devoting part of
> their time to relief efforts -- an expense that is hardly relief-related,
> and is really a subsidy to the Defense Department.)
>
>
> 3.  THE "DEBT RELIEF FOR POVERTY REDUCTION ACT" - PROPOSED BY REP. JIM
LEACH
>
> Rep. Leach, the Republican Chair of the House Banking Committee, has
> introduced a bill which would cancel the bilateral debt owed the U.S. by
> most of the 41 countries defined by the World Bank and IMF as "heavily
> indebted poor countries" (HIPCs).  It also would attempt to reform the
World
> Bank/IMF HIPC Initiative, the plan those institutions came up with in 1996
> to respond to calls for debt relief.
>
> The bilateral debt relief accorded by the bill would be a very positive
> step.  As in the case of Nicaragua and Honduras, above, the breaking of
the
> precedent by which the U.S. always resists debt cancellation, would
perhaps
> be more important than the amounts of debt canceled.  That change of
policy
> could signal an important change for many other countries as well (though
> recent initiatives from other G7 countries suggest they might not require
a
> signal from the U.S.).
>
> The multilateral debt section of the bill, however, is problematic.  The
> HIPC Initiative is a deeply flawed program.  It demands that debtor
> countries wait for several years before seeing any relief, then provides
> paltry benefits.  During the waiting period, it requires that governments
> commit themselves to several years of IMF/World Bank structural adjustment
> programs - the very schemes which have already exacerbated poverty and
> increased debt burdens throughout Africa, Latin America, and much of Asia
by
> mandating layoffs, hikes in interest rates, currency devaluations, and
cuts
> in health and education spending.  Africa's external debt has increased
> nearly 400% since the onset of structural adjustment programs in 1980.
> Uganda, the first graduate of the HIPC program (in April 1998) has already
> found that its debt has again become officially "unsustainable," and
> Mozambique has found that HIPC promises its annual debt payments would be
> reduced only from $110 million annually to $100 million -- on the
condition,
> demanded by the IMF, that it quintuple user fees for patients at health
> clinics.  In light of such experiences, we believe the HIPC Initiative is
> more accurately viewed as a tool for keeping countries tethered to
IMF/World
> Bank austerity programs than as a debt relief program.
>
> The Leach bill would reform HIPC by offering a one-year grant to the HIPC
> Trust Fund and promising two more years of contributions if it the program
> is changed as outlined in the bill.  The suggested changes include
loosening
> the requirements for countries to participate, and offering deeper debt
> relief -- specifically by lowering the target for "sustainable debt" from
> 20-25% of export income to 10%.  (As IMF officials have admitted, the
20-25%
> targets were chosen quite arbitrarily.)  It would also reduce from six to
> three the number of years that countries would have to implement
structural
> adjustment or similar programs before gaining the HIPC's benefits.
> Loosening the eligibility requirements and deepening relief are of course
> welcome, but the levels chosen by the bill could be more ambitious,
> particularly in the context of what other governments are talking about
> offering.  Most importantly, we find the continuing link between
structural
> adjustment and debt relief contradictory and unacceptable.  We are also
> concerned that the reforms would still allow the institutions (IMF and
World
> Bank) to determine when a country has completed three years of
satisfactory
> performance -- and the IMF declares countries "off-track" in 75% of its
> programs.  The three years could thus easily grow to four, five, or more.
>
> The Leach Bill does include a section reading: "The economic and social
> reforms on which HIPC debt relief is conditioned shall incorporate
effective
> measures for poverty reduction and environ-mental protection."  In the
> absence of any gauges of such effectiveness, any suggestions of what sort
of
> measures would be considered adequate, or any mechanisms for enforcing
this
> requirement, this section is meaning-less.  The institutions which
> administer HIPC have frequently claimed great results for other programs
> where few others can detect them.
>
> The Leach Bill is very loose in how it would measure compliance with the
> recommended reforms: it just requires Presidential certification that
> satisfactory progress is being made before the second and third years of
> funding are released.  In addition, no dollar amounts are defined for any
of
> this funding, so it could be a tremendous amount for a bad program that
> essentially further binds countries to the economic demands of the World
> Bank and IMF.  The bill also does not allow for changes that might be made
> to the HIPC program apart from the reforms it suggests; any adjustments
> recommended by an international review of HIPC now being conducted should
be
> automatically incorporated.
>
> We also reject the basic framework of HIPC, which is one where the
> "preferred creditors" -- the international financial institutions -- serve
> as judge and jury in determining the fate of countries petitioning for
debt
> relief.  Any reform of the multilateral debt system should insist on some
> process of neutral arbitration.
>
> It might be suggested that we should accept some potential improvement in
> the HIPC Initiative when it looks achievable.  However, it is not at all
> clear, with the loose enforcement provisions, that even that would be
> achieved by the Leach Bill.  Furthermore, with the rapid pace of new debt
> initiatives and the international momentum of the Jubilee 2000 movement,
we
> think that settling for the reforms of the Leach Bill would be
> short-sighted.
>
>
> 4.  PRESIDENT CLINTON'S SPEECH OF MARCH 16
>
> On Tuesday, March 16, President Clinton made a speech to a gathering of
> finance and foreign ministers from Africa in Washington.  In it he
outlined,
> in remarkably vague fashion, his submission in the G-7 race of debt relief
> proposals in advance of the Cologne Summit.  This analysis is by necessity
> tentative, since the actual details of the plan were not released, and as
of
> yet we don't know when they will be made public.  The calculations
indicated
> by press releases -- that an additional $70 billion in debt relief would
be
> achieved -- indicate that someone has done some work on the details, so we
> hope it's just a matter of time before we get hold of it.
>
> The only concrete promise of deeper debt relief in Clinton's proposal is a
> pledge of complete forgiveness of bilateral debt contracted on a
> concessional basis, which is to say loans made at interest rates below the
> prevailing market rate.  For non-concessional bilateral debt, Clinton
would
> go beyond the Paris Club's current 80% plateau, up to 90%.  The rest of
the
> proposal is firmly anchored in the terms of the HIPC Initiative as it now
> exists, and thus wed completely to neo-liberal structural adjustment.
Most
> of the vaguer pledges are predicated on being offered to "exceptional
> performers" or at least to countries successfully implementing "economic
> reforms" -- code words for structural adjustment -- and would also require
> that other rich countries co-operate with U.S. plans.  For example, a
press
> release from the Treasury Department indicates that Clinton's plan would
> have the multilateral institutions make grants to countries during the
HIPC
> Initiative's waiting period so that some net relief would arrive before
the
> formal granting of benefits.  One would conjecture, also, that the deeper
> debt relief would be achieved by lowering the targets of the HIPC program
> (from having a country pay no more than 20-25% of its export income to,
say
> 15%), but we await details on that.  A  report on the plan in the
Washington
> Post indicated that this proposal would accord relief to some 50 countries
> (as opposed to the 41 the World Bank classifies as HIPCs).  Again, we
shall
> see.
>
> An intriguing portion of the Treasury Department release calls for seeking
> "international commitment to provide at lest 90% of new aid to HIPC
> countries on a grant basis."  Just how that would be achieved is left
> unspecified.  Another item, which Clinton has now talked about on a couple
> occasions, and which Vice President Gore first hinted at publicly on
January
> 29, involves selling off some of the IMF's gold stocks to finance debt
> relief.  Treasury has apparently calculated that a limited sale would be
> sufficient to finance the rest of their proposal.  Past proposals for gold
> sales would have routed the money through the IMF -- something which would
> of course be a serious error if meaningful debt relief is the goal.  We
> await clarification on how this sale would work, though it appears that
the
> President is talking only of using the interest from investing the
proceeds,
> and not the proceeds themselves, which of course could provide much
greater
> benefits.
>
> The 50 Years Is Enough Network put out a press release in response to the
> Clinton proposal which noted that the fact that Clinton is talking about
> addressing the debt problem at all is a real advance.  His proposals were
> made, no doubt, in response to those from his European counterparts (see
> below); it's important that the U.S. participate in the dialogue if the
> Cologne summit is to produce anything meaningful.  Our press release,
> however, emphasized that the announcement, vague as it was, did not really
> herald any significant new attitudes.  We quoted the Network Director,
Njoki
> Njoroge Njehû, saying, "while we are  pleased to see that the President
> wants to address this crisis, we are very disappointed that he still wants
> to subject countries to failed economic policies that will mean more debt
> and will sabotage any move toward sustainable development."  The continued
> insistence on conditioning debt relief on adherence to structural
> adjustment, she said, means "governments are in essence told they must
> starve their people before the creditors will take any action to save
them."
>
>
> 5.  REP. BERNIE SANDERS'S "GLOBAL SUSTAINABLE DEVELOPMENT RESOLUTION"
>
> The lone Independent in the House of Representatives, Bernie Sanders of
> Vermont, is putting forth a hefty resolution on the global economy.  It
asks
> that Congress recognize the damage done by recent trends in globalization
> and declare itself for the democratization of the global economy.
>
> The chances of its actual passage by the House are probably not good, but
> the resolution is useful in many other ways.  Progressives opposed to the
> collection of economic policies and trends loosely referred to as
> globalization have long found it difficult to propose a coherent
> alternative.  This document, which runs about 20 pages, offers a diagnosis
> of the problem and the most essential steps to beginning to restore power
> over the global economy to the people that are part of it.
>
> Suggestions for a resolution of the debt crisis occupy a sizable portion
of
> the recommendations.  It calls for the U.S. to work with the multilateral
> institutions, other governments, and commercial banks to "write off the
> debts of the most impoverished countries by the end of the year 2000."  It
> also states that "the final goal of all debt forgiveness initiatives will
be
> to allow countries to pursue sustainable domestic development."  Like the
> HOPE for Africa Act, the Resolution calls in plain language for the U.S.
to
> cancel the bilateral debts owed it by impoverished countries, and
insists --
> more explicitly than HOPE -- that "debt cancellation shall not depend on
> adherence to structural adjustment or similar programs." Like HOPE, it
would
> require that impoverished countries pay not more than 5% of annual export
> earnings toward servicing foreign debt.  It also calls for the U.S. to
> influence the multilateral institutions to cancel debt, and for those
> institutions to use $1 billion of their own resources to finance debt
> relief.
>
> Rep. Sanders's Resolution goes beyond HOPE in calling for the
establishment
> of an impartial body to determine when countries should be declared
> insolvent, or bankrupt, so that they do not simply plunge into ever-higher
> debt tallies as they borrow to pay back earlier loans (i.e.., precisely
what
> is happening now in country after country).  The procedures used by the
> panel would be comparable to those used for U.S. municipalities in
> bankruptcy.
>
> This Resolution contains many other excellent recommendations concerning
the
> global economy, including a large section on reform of the IMF and World
> Bank.  It is probably the closest thing we have to a pragmatic, visionary
> description of the progressive position regarding the global economy in
the
> U.S.  Rep. Sanders will be sponsoring a launching event for his Resolution
> on April 26, designed to increase its visibility around the country, and
the
> 50 Years Is Enough Network will be playing a role in it.  You should be
> hearing more about this in the near future.
>
>
> 6.  PROPOSAL BY CHANCELLOR SCHRÖDER OF GERMANY
>
> (For some of our analysis of the proposals coming out of Europe, we are
> indebted -- so to speak -- to our colleagues at the European Network on
Debt
> and Development [EURODAD].)
>
> The opening salvo in the G-7 flurry of debt proposals came on January 21
in
> a Financial Times article by German Chancellor Gerhard Schröder. The big
> news in his proposal -- apart from its very existence, which has proved
the
> most important thing -- was the recommendation that the Paris Club
consider
> 100% cancellation of debts (both concessional and non-concessional) for
the
> most indebted countries in "exceptional cases."  Like the Leach Bill, the
> German proposal also called for reducing the period countries being
> considered for HIPC benefits would have to spend under structural
adjustment
> from six years to three.  Schröder also announced that he would not oppose
> selling IMF gold, which was news because German opposition had for several
> years been the main obstacle when the idea was brought up.
>
> The German government has apparently responded to the proposals from its
G-7
> partners (the U.S., and, as detailed below, the U.K. and France).  In an
> example of very circuitous reporting, a story by the French news agency
AFP,
> datelined Tokyo - March 22, says that the business newspaper Nihon Keizai
> Shimbun reports from Washington that the German government has proposed to
> the G-7 "waiving all their official development aid [debt], worth some 20
> billion dollars, to the world's poorest nations."  The story says that the
> U.S., U.K., and Canada have all indicated their support. It also reports
> that the Germans are now also proposing the sale of between five and ten
> million ounces of IMF gold to finance debt relief; this would be the first
> concrete endorsement of gold sales by Germany.  Finally, the report
mentions
> that there will be a special meeting of G-7 finance ministers in May to
work
> out the details of the debt relief initiative in advance of the Cologne
G-7
> Summit.
>
> 7.  PROPOSAL AND STATEMENTS FROM THE U.K. GOVERNMENT
>
> The most interesting statements by government officials so far have come
> from the U.K.  This should not be a surprise, since it is in the U.K.
where
> the Jubilee 2000 movement was born and has its greatest strength.
>
> The proposal offered by the U.K., presented to G-7 finance ministers at a
> Bonn meeting on February 20, was summarized in an article in the February
22
> Guardian by Chancellor of the Exchequer (Finance Minister) Gordon Brown
and
> Development Minister Clare Short.  In its account, EURODAD emphasizes the
> following:
>
> *The UK is committed to the UN goal of halving the proportion of the world
> population living in absolute poverty by 2015. Money spent on servicing
debt
> should be spent instead on education and health. A debt overhang from the
> past should not prevent economic development in the future.
> *All 41 HIPCs should receive debt reduction by the end of 2000, which
> implies that US$50 billion will be written off in the next 22 months. This
> needs to be implemented from June 1999 (the Cologne G-7 Summit).
> *Under the HIPC program, countries must wait three years after the
"decision
> point" (which is reached after three years of compliance with a structural
> adjustment program) in order to receive relief.  The U.K. proposal would
> provide the relief immediately after the decision.  (This appears to be
> similar to what Clinton is talking about in his proposal, though the U.S.
> would apparently prefer to use grants rather than formally award any
relief
> until the "completion point.")
> *To achieve these objectives the IMF must sell some of its gold reserves,
> which the UK will strongly press for this year.  Again, the Clinton
approach
> echoes this idea.
>
> The British proposal was the first to attach a dollar amount to how much
> debt could be wiped out, and $50 billion was rather an attention-getting
> figure.  Of course, that figure is the face value of the debt; the cost to
> the creditors would be $25 billion or less.  Still, of course, nothing to
> sneeze at.  The Clinton proposal, which appeared later, calls for
forgiving
> $70 billion in debt.  As with the Clinton proposal, we must recognize that
> the U.K. plan does not really commit a great deal of the country's own
> funds, and is not all that specific.  But one difference with the British
> system is that the government probably does not need specific
Parliamentary
> approval to cough up its share of the funds its plan would require.
>
> At this point the most exciting aspect of it is probably the timeline --
> accomplishing this debt relief by the end of 2000, which is not something
> that Clinton promises.  If that timeline were to be adhered to for all
HIPC
> countries, it would be a genuine advance.  It would mean foregoing the
rigid
> conditionalities preceding relief for many countries, despite the plan's
> continuing reliance on the HIPC Initiative.
>
> Maybe the biggest distinction between the U.K. and the U.S., however, is
the
> way the government officials talk.  Can anyone imagine Robert Rubin
> appearing in front of a crowd of 3500 debt campaigners to endorse the idea
> of radical debt relief?  Gordon Brown did, on March 7 at St. Paul's
> Cathedral in London.  He said that poor countries' debt "is the great
moral
> issue of our day and this decade" and "the greatest single cause of
poverty
> and injustice across the earth and potentially one of the greatest threats
> to peace."  And: "I say to the churches and to all who support Jubilee
> 2000 - as I do - for your work, from the Human Chain that enveloped
> Birmingham last year, to the missionary work and sacrifice in the farthest
> corners of the globe every year, we thank you. […] Your vision is of a new
> climate of justice across the world, a new climate of justice that will
> liberate nations from unsustainable debt."
>
> Less than a week later, Prime Minister Tony Blair asked to meet with
Jubilee
> 2000 campaigners who had staged an all-night vigil.  The following summary
> of their visit to 10 Downing Street comes from the Jubilee 2000 U.K. web
> site (www.jubilee2000uk.org <http://www.jubilee2000uk.org>):  "Blair met
the
> 7-strong delegation in the lobby outside the Cabinet Room and
congratulated
> everyone, calling Jubilee 2000 'a great campaign.' Jubilee 2000 Director
Ann
> Pettifor invited him to put on a lapel chain, the campaign's symbol -
which
> he agreed to do. After photos, he confirmed that he was determined to see
> this issue tackled at the G8 in Cologne and agreed that the current form
of
> the HIPC initiative is not good enough. He added that he would have to get
> his fellow leaders to act too. He then gave his visitors a quick tour of
the
> Cabinet Room, and in passing, added that the debt issue is regularly
raised
> `at the breakfast table' - as well as in the church where his family
> worships. While this was not a meeting to discuss government policy or the
> campaign in any depth, the Prime Minister's willingness to meet
demonstrates
> a growing commitment to action from the British Government - and its
> readiness to identify itself with the Jubilee 2000 Coalition.
>
>
> 8. THE FRENCH IDEA
>
> Not to be left out in the competition, France has also put forth a
proposal.
> Unlike those from Germany, the U.S., and the U.K., it does not offer
reform
> of the HIPC Initiative.  The idea, announced by Finance Minister Dominique
> Strauss-Kahn in Paris on March 17, at the annual meeting in Paris of the
> Inter-American Development Bank, is comparatively simple.  The French
would
> cancel all interest payments on the debt of impoverished countries for a
> period of 30 years.
>
> This is an intriguing idea.  But it is far too vague at this point to
really
> analyze.  For example, we would have to be certain that existing programs
at
> the Paris Club to reduce debt principal would not be curtailed.  It would
> also be very interesting if there was a retroactive character to the plan:
> if payments on a given loan have, with interest paid, amounted to the
total
> principal of the original loan, would the loan then be considered paid
> despite remaining servicing due?  EURODAD points out that it is unclear if
> the French plan would apply to both concessional and non-concessional
loans.
> So, as with the Clinton proposal, we will have to see more details before
> making a conclusive assessment.
>
>
>