WSJ: Outsiders get credit for G7 Debt Relief Action (fwd)

[Robert Weissman <rob@essential.org>]

THE WALL STREET JOURNAL
April 26, 1999

Group of Seven Plans to Weigh Issue
Of Debt Relief at Sessions This Week

By MICHAEL M. PHILLIPS 
Staff Reporter of THE WALL STREET JOURNAL

WASHINGTON -- For years, the notion that rich nations should write off
loans to poor ones was the lonely domain of religious leaders and the
starry-eyed political fringe.

Monday, when top officials from the Group of Seven major economic
powers gather here, the issue will be center stage -- and political outsiders
can take considerable credit for it.

In a grass-roots campaign reminiscent of the drive against South African
apartheid, the debt-relief movement, particularly the faith-based Jubilee
2000 coalition, has jarred the highest levels of power. So much so that
Pope John Paul II raised the issue of debt relief when he met with
President Clinton in St. Louis in January.

"I am determined that the U.S. play a leadership role in this important
moral endeavor, and I wish to thank you, the Catholic Church, and Jubilee
2000 campaign for providing such inspirational guidance to the world
community," Mr. Clinton wrote afterward in a letter to the pontiff.

"As we approach the millennium, I'd like to assure you that I'm committed
to assisting in the effort to improve the human condition in the world's
poorest countries by promoting economic reform and expanding the scale
of debt relief," he wrote.

G-7 economic officials will consider several debt-relief proposals Monday
and during this week's International Monetary Fund-World Bank spring
meetings. Already, Britain, France, Canada, Germany and the U.S. have
floated their own plans to reduce debts owed by poor countries to rich
ones and multilateral lenders. G-7 officials hope to work out a unified
approach their leaders can announce during the June summit meeting in
Cologne, Germany. "Popular pressure has finally focused their attention on
the unpayable debt of poor countries," said Carole Collins, national
coordinator for Jubilee 2000/USA. The group, which includes church and
nonreligious organizations, sees in the book of Leviticus a biblical call for
millennial debt forgiveness.

Advocates believe poor nations can't improve the lives of their citizens if
they must service huge debts to rich countries, the IMF and the World
Bank. Jubilee 2000 calculates that 41 of the poorest countries in Africa,
Asia, Latin America and the Mideast have foreign debts totaling $220
billion. "The debt crisis should be measured in terms of its human costs and
moral consequences," U.S. Catholic bishops said Friday.

Grass-roots campaigns stand out among several forces that have
converged to focus attention on debt relief. The G-7 has discussed the
issue several times over the years. Its support allowed the World Bank
and IMF to establish an innovative but small debt-relief program in 1996.

Public pressure has been mounting for a wider effort. In May, 70,000
protesters formed a human chain, symbolizing the bonds of debt, around
the site in Birmingham, England, where G-7 and Russian leaders were
meeting. During President Clinton's trip to Africa last year, government
leaders pressed him on the issue, noting how difficult it was to pay for
health, education and debt servicing. The issue cropped up again when the
president toured hurricane-wrecked areas of Central America.

Last month, Mr. Clinton told an audience of African finance ministers here
that he wanted to increase by $70 billion, to $100 billion, from $30 billion
-- the amount of official Third World debt eligible for relief, financed
partly
by selling as much as 10% of the IMF's $29 billion in gold holdings. The
chances of a G-7 agreement increased substantially in October, when
German Chancellor Gerhard Schroeder took office from Helmut Kohl, a
longtime opponent of debt reduction.

There remain many issues to be hammered out before the Cologne summit:
How much economic reform will be required of poor nations to qualify for
assistance? How many countries will be eligible? Where will the money
come from?

As World Bank President James D. Wolfensohn said recently, "I think all
that is terrific -- so long as we can pay for it."


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