Camdessus on Cologne Initiative (fwd)

[Robert Weissman <rob@essential.org>]

Notes at top from Soren Ambrose of the Alliance for Global Justice:

Note that M. Camdessus says that J2000 may be on the wrong track, offering
the line that debt relief will undermine development assistance.

Note also the last line of the second story: the IMF, Michel says, will need
more contributions to do this debt relief (over and above gold sales)!

Camdessus says G7 must cease lending to Africa for military spending
Date: Mon Jun 21 11:30:20 CDT 1999

   PARIS, June 21 (AFP) - IMF managing director Michel Camdessus called on
the G7 on Monday to cease lending money to Africa for military spending,
saying that only if such spending were cut could the continent pull out of
poverty.
   "Let's fight war and military expenditure in Africa," Camdessus said at a
lunch with French Finance Minister Dominique Strauss-Kahn on the sidelines
of a development conference here.
   "The plague of Africa, maybe more than corruption, is war and military
expenditure," Camdessus said.
   "Half of Africa is at war, and you cannot have economic growth in those
conditions."
   The Group of Seven leading industrial nations (Britain, Canada, France,
Germany, Italy, Japan and the United States) "must refuse export credit for
military expenditure" in the region and place tighter control on the way
their aid in Africa is used, he said.
   He supported a proposal from UN Secretary General Kofi Annan for African
countries to limit military spending to 1.5 percent of gross domestic
product and to stop increasing it in real terms.
   Camdessus welcomed a G7 plan to slash 70 billion dollars off the debt of
the world's pooreset countries, most of them in Africa, but said pressure
groups calling for total immediate cancellation of the debt may not be on
the right track.
   "Beware of winning the debt battle and losing the development war," he
said, stressing that someone had to foot the bill if such debts were not
repaid and the cost could undermine future development assistance.
   The industrial nations have set themselves a target for this aid at 0.7
percent of GDP by 2000 but it will in fact be only 0.2 percent, he said.



IMF head says gold sales planned to finance G-7 debt intiative
Date: Tue Jun 22 19:30:09 CDT 1999

   WASHINGTON, June 22 (AFP) - IMF managing director Michel Camdessus on
Tuesday welcomed an enhanced debt relief initiative from the Group of Seven
nations and said the Fund would help finance it with gold sales.
   "We will do our utmost to secure agreement on the strengthened initiative
and its financing by the annual International Monetary Fund-World Bank
meetings in September," Camdessus said in a statement here.
   The leaders of Britain, Canada, France, Germany, Italy, Japan and the
United States, meeting in Cologne, Germany on Friday, agreed on a plan to
slash billions of dollars from the debt owed by 40 of the world's poorest
nations to governments and multilateral institutions such as the IMF and the
World Bank.
   In net present value terms, if the debt were to be paid off totally
today, the initiative would cut 27 billion dollars off the 71 billion
dollars owed by the world's poorest countries.
   The G7 move would offer more substantial debt relief than had been
envisaged in a joint IMF-World Bank initiative put forward in 1996.
   Camdessus said the IMF was ready to finance its share of the new effort
by selling a portion of its gold holdings, a proposal first suggested by the
Fund in September 1996.
   "IMF management ... is committed to conducting such sales, once agreed,
in an orderly and careful manner which would not disrupt the gold market,"
he said.
   But he added that gold sales would have to be supplemented by further
bilateral contributions to help the IMF meet its share of the costs in the
new scheme.