UNICEF says debt relief too slow

[Robert Weissman <rob@essential.org>]

                                                        Johannesburg,
South Africa. July 30, 1999

             

            Slow debt relief irks Unicef

            The United Nations' children's agency has taken the
unprecedented step of criticising the
            International Monetary Fund's role in managing the economies
of the world's poorest countries.


            CHARLOTTE DENNY reports


                 HE west must speed up its delivery of the $100-billion of
debt relief for the world's poorest
                 countries promised at the Cologne G7 summit this year,
the United Nations Children's Fund
                 said on Friday.

            Unicef has joined Oxfam, the international development agency,
in criticising the slowness of G7
            efforts to reduce the debts of the poorest countries.

            In a report to the World Bank, Unicef and Oxfam have said that
countries should not have to stick to the
            International Monetary Fund's rigid rules for macro-economic
reform for six years to qualify for loans
            reductions.

            Instead, they should qualify on the basis of a two-year record
of progress towards economic reform
            and poverty reduction.

            "The Unicef-Oxfam proposal brings debt relief
            into line with international social commitments,
            such as the reduction of child and maternal
            mortality and education for all," said Oxfam's
            policy director Justin Forsyth.

            It is the first time that a UN agency has openly
            criticised the fund's role in managing the
            economies of the world's poorest countries, most
            of which are tied to IMF structural adjustment
            programmes in return for the soft loans they need
            to keep their economies afloat.

            Many development experts, including some World
            Bank economists, believe the fund's prescriptions
            of fiscal belt-tightening add to poverty rather than
            reduce it.

            In Cologne the G7 said its central objective was to direct
greater focus on to poverty reduction by
            releasing resources for investment in health, education and
social needs. But most aid agencies believe
            this to be impossible while the fund is gatekeeper to debt
relief.

            Forsyth stressed that debt reduction should not come at the
expense of the aid budgets of donor nations.
            "Without a commitment to find new money, the wealthy countries
will inevitably raid their aid budgets,
            in effect robbing Peter to pay Paul."

            -- The Guardian, July 30, 1999.