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Infosdebitarsi 23 marzo 2005 Notizie dall'Africa sul debito

Infosdebitarsi 23 narzo 2005 Notizie dall'Africa sul debito

In questo numero:

- nota di comunicazione ai lettori e attivisti:AAA cercasi traduttori volontari
- notizie dall'Africa trasmesse dalla rete Eurodad


Cari amici,
siamo costretti ad inviarvi alcuni numeri di Infosdebitarsi in lingua
inglese per l'impossibilita' di curarne rapidamente  la traduzione.
Colgo l'occasione per chiedere, a chi volesse e potesse, offrire un
contributo alla campagna Sdebitarsi traducendo alcuni testi brevi prodotti
dalle campagne internazionali per diffondere in Italia le notizie che
circolano nel mondo.

Buona lettura e alla prossima!

Raffaella Chiodo



African NGO Statement on Debt Relief and Debt Sustainability to the 7th
Commonwealth HIPC Ministerial Forum
"What HIPC Brought: The Case of Mozambique": New Report by Mozambique Debt


African NGO Statement on Debt Relief and Debt Sustainability to the 7th
Commonwealth HIPC Ministerial Forum
Civil society organisations from Cameroon, Ghana, Guyana, Kenya, Malawi,
Mozambique, Uganda, Sierra Leone, Zambia and Zimbabwe have issued a joint
statement which outlines a set of key recommendations on debt cancellation
and debt sustainability for poor and middle-income countries. The statement
was drafted in the context of the 7th Commonwealth HIPC Ministerial Forum
which was held in Maputo Mozambique on 15 and 16 March 2005 and was
presented to HIPC Finance Ministers.

In the statement, groups welcomed the opportunity to engage with their
Finance Ministers and reiterated their commitment to work together to find
''lasting and sustainable solutions to the poverty-debt trap our countries
currently find themselves in". They acknowledged the efforts of their
governments to try to raise issues of debt relief "'which take into account
the finance needed to attain the MDGs by 2015" as well as the burden of
domestic debt within both national and international forums. These were
shared concerns.

In the statement, NGOs stress that the HIPC Initiative "has failed to
provide low-income countries with a permanent and robust exit from
indebtedness" and that continued debt service by Sub-Saharan African
countries in fact "constitutes a reverse transfer of resources to wealthy
creditor countries by those that can least afford it". The statement also
points to the growing problem of domestic debt. This has been exacerbated
by the linking of the Poverty Reduction and Growth Facility (PRGF) to the
HIPC Initiative. Where countries are deemed off-track with their PRGF, they
are suspended from the HIPC Initiative which forces governments to resort
to the domestic market to meet their expenditure obligations. The World
Bank/IMF debt sustainability framework also does not consider the burden of
domestic debt nor the finance needed by countries to attain the
internationally agreed MDGs.

The statement outlines 6 key recommendations in this context:

1.      Consideration of domestic debt in all debt sustainability analyses;
2.      The HIPC Initiative should be de-linked from the PRGF and priority
expenditures should be safe-guarded and ring-fenced;
3.      Equal participation of debtors in the design of frameworks and
policies about debt resolution;
4.      The concept of public private partnerships should be expanded to
include the participation of communities and should be driven by social
5.      100 per cent unconditional cancellation of the debts of all those
countries where debt service payments are seriously hindering efforts
towards attainment of the MDGs by 2015;
6.      Debt relief initiatives should ensure additional, sustained and
positive net financial flows to these countries in order to release
resources for investment in poverty reduction.

The statement also describes the UK Government proposals on debt service
relief as a "welcome step forward" but they could be "more comprehensive"
in country-scope. NGOs also point to the concern that under these
proposals, the use of bilateral contributions for multilateral debt service
payments "effectively serves to convert grants into loans and increases
moral hazard for institutional lending". There is also the risk that these
proposals may divert scarce aid towards debt cancellation when "what is
needed is for debt cancellation to complement rather than substitute aid".

NGOs therefore propose that both bilateral and multilateral resources be
used to fund further debt cancellation. The first port of call should be
the IMF's vast undervalued gold reserves which should be sold. This has the
potential to raise US$35 billion says the statement. It should be coupled
with additional bilateral contributions of the type pledged by UK and
Canada as well as resources drawn from the World Bank's non-concessional
lending arm, the International Bank for Reconstruction and Development

The statement also urges the internationally community to "energetically
support the creation of an alternative debt restructuring mechanism" and
points to proposals for a fair and transparent arbitration process as one
instrument that would address the grossly unequal power relations currently
at play in international debt negotiations. NGOs also called on their
governments to adopt legislation that limits their debt service to not more
than 10 per cent of government revenue to allow sufficient funds to be
invested in the social and productive sectors of their countries.

Full statement:

Official Messages
Participating Finance Ministers also issued their own communiqué and
proposals on deeper and wider debt relief and on debt sustainability. In
some cases, their messages echoed those put forward by many civil society
groups, in particular in relation to the issue of domestic debt. The theme
was a recurring one throughout discussions and Ministers emphasised the
need to include both private and domestic debt in any reasonable debt
sustainability analysis. It was also encouraging to hear them criticise
some aspects of the new Bank/Fund framework for debt sustainability in
low-income countries. Although Ministers fell short of an out and out
rejection of the new framework, they did emphasise that "the preparation
[of debt sustainability analyses] should involve broader participation than
that of the World Bank". They also highlighted the subjective nature of the
Country Policy and Institutional Assessment (CPIA) and expressed particular
concern at the exclusion of revenue indicators. HIPC Finance Ministers have
repeatedly argued that the debt service to government revenue indicator is
the most important since it reflects what they actually have in their hand
and what they have to pay out. The Bretton Woods Institutions appear to
have ignored this call however. The new framework will be based on a
country's scoring under the CPIA, its vulnerability to exogenous shocks and
the ratio of debt to Gross Domestic Product. NGOs have also expressed
concern at the monopoly of the IFIs over DSAs as well as the fact that the
new framework will be based entirely on macroeconomic indicators and will
not bear in mind the human needs within a country or the huge levels of
finance needed to reach the MDGs.

On broader and deeper debt relief, Ministers declared themselves as largely
supportive of the agreement reached by G7 Finance Ministers in February to
provide "up to 100 percent multilateral debt relief". They also broadly
endorsed UK and Canadian efforts on debt service cancellation. This is
despite the fact that these initiatives fall far short of what both many
southern governments and civil society organisations have been calling for:
100 per cent cancellation of the debt stock of the poorest countries.
Nevertheless, HIPC Ministers did call on donors to expand 100 per cent
multilateral debt relief of the type ledged by the UK to all IDA-only
countries and to give "careful consideration" to requests for debt relief
from blend countries. This clearly follows concern at the exclusion, until
now, of Nigeria from any global (partial) debt reduction initiative.

Ministers also stressed the importance of the additionality of debt relief
provided, something which has been echoed by many civil society groups as
well as the European Commission. During discussions, HIPC Finance Ministers
also stressed that while many Paris Club creditors had in fact made
promises to write-off large parts of their debt, they were too slow to
deliver. Some Ministers proposed a creditor peer review so that laggards
could be hauled up on this. In the communiqué, HIPC Ministers called on
''those Paris Club creditors which had not provided 100 per cent relief on
all past claims to do so rapidly''.

The new Africa Commission report was also cited many times during
discussions and was given a warm welcome by both NGOs and Ministers. NGOs
voiced concern that while they broadly endorsed the report's findings and
recommendations, there appeared to be a huge gulf between it and actual UK
Government policy on debt, aid and trade. HIPC Ministers emphasised the
''critical importance of improved access to developed country markets".

Full statement:


"What HIPC Brought: The Case of Mozambique": New Report by Mozambique Debt
The Mozambique Debt Group has published a new report on "What HIPC Brought:
The Case of Mozambique". It was launched at last week's Commonwealth HIPC
Ministerial Forum.

The report notes that Mozambique has visited the Paris Club on at least
five occasions over the last 20 years and has secured agreements under
Toronto, London, Naples, Lyon and Cologne Terms. It is also a HIPC and has
"successfully" passed through the HIPC Initiative process. Despite this,
Mozambique still suffers from unacceptably high poverty indicators (54 per
cent in 2002/2003), as well as limited employment opportunities, low
quality and poor access to social services, high infant mortality rates,
malnutrition, low quality and poor access to housing, among many other

The report criticises the HIPC Initiative and argues that the
conditionality associated with the process was "mostly oriented towards
macroeconomic reforms", such as privatisations, macroeconomic stability,
inflation targets and fiscal reform, rather than with the living conditions
of the people. This undermined the effectiveness of the debt forgiveness
process. The report argues that resources freed up under the HIPC process
could have been better optimised if countries had had the "freedom to
decide on the best economic and social policies to be adopted".

It does however acknowledge that one of the main benefits of the HIPC
Initiative has been to restore investor confidence in the country. However
the report also points to the growing problem of domestic debt which
threatens to undermine this since the issue has not yet been seriously
tackled. It also raises the issue of the poor participation of parliament
and civil society in formal loan contracting processes and in debt

To address these concerns, Mozambique Debt Group brings forward a number of
key recommendations within the report:

è      Mozambique should be afforded more policy autonomy and be able to
take leadership in the decision-making about its own destiny;
è      The Mozambique Government should launch debt forgiveness to those
productive enterprises that had their capital eroded due to war and
economic crisis;
è      The Mozambique Government should take measures to combat excessive
bureaucracy and corruption;
è      The country should develop clear loan contraction strategies as well
as reinforce the capacities of debt monitoring institutions.
è      The donor community should channel more assistance via grants;
è      The IMF and World Bank should be more flexible in relaiton to
imposed public expenditure ceilings and other macro-economic variables;
è      The reform of international trade relations is also vital;
è      Mozambique's debt should be cancelled without conditions that impede
the country's ability to adopt the policy measures it sees as most
appropriate for poverty reduction;

The report is available in Portuguese on the EURODAD website and will
shortly be published in English. Please keep an eye on our website for the
English language version.

UN Multi-stakeholder Consultation on Sovereign Debt
The 7th Commonwealth HIPC Ministerial Forum was then followed by a
multi-stakeholder consultation on sovereign debt for sustained development.
The consultation, organised by the UN Financing for Development Office
brought together representatives of government, international institutions,
the private sector, debt managers and civil society to discuss issues
related to indebtedness in low-income countries. The consultation was the
second in the process. The first took place in New York on 7 and 8 March
and looked at debt in countries with access to financial markets. The final
multi-stakeholder consultation will take place in Geneva Switzerland in
June.  A separate report will follow.


Ministers want more participation of bilateral, multi-nationals in HIPC
<http://www.akomainternational.com/index.php?do=ghanaweb>Accra, March 18,
GNA - The Commonwealth HIPC Ministerial Forum has expressed concern at the
lukewarm attitude of a number of non-Paris Club bilateral, smaller
multilateral and commercial creditors in the HIPC Initiative.

Contributors at the Forum therefore stressed the need for targeted
collective diplomatic initiatives to bring such countries and creditors on
board to boost donor support to write off intra-HIPC debts. This would also
lead to the expansion of the funding of the HIPC Trust Fund to ensure full
participation of all multilateral creditors, they said at the end of a
two-day meeting held in Maputo, Mozambique on March 16.

The Forum, which was attended by a number of African countries, the United
Kingdom, United Nations, International Monetary Fund IMF), World Bank and
multilateral organisations reviewed developments in the world economy as
their impacted on HIPC.

The Forum assessed the progress being made in implementing the HIPC
Initiative, including the proposals for deeper and wider debt-relief and
ensuring long-term debt sustainability.

A statement on the Forum, received by the GNA in Accra on Friday, said the
Ministers also discussed high domestic debt burden and revisited the issue
of public-private partnerships to promote infrastructure investment and
service delivery in post-conflict countries.

The Ministers noted that 15 countries had reached their completion points
and expressed the hope that the remaining 12 countries, which were at the
decision, point would reach their completion points as soon as possible.

The Ministers noted, however, that some of the HIPC initiatives had
"slipped through" the envisaged completion point dates leading to
suspension of the delivery of the HIPC debt relief from multilateral

This, they said, had created severe budgetary constraints, which had
undermined financing of poverty reduction programmes. "Ministers also
remained concerned about the challenges faced by the 11 potentially
eligible HIPCs in starting the HIPC process in the time available within
the new sunset clause.

"Many of these countries were mired in conflict, had considerable arrears
and limited relations with the (IMF)."

The Ministers underlined the need for the abolition of the sunset clause to
ensure that all deserving HIPCs and other potentially eligible countries
received adequate HIPC debt relief.

The Forum said it was pleased to note that most Paris Club creditors had
gone beyond the HIPC Initiative and provided 100 per cent relief on all
pre-cut-off debt claims and a significant number also on post-cut-off

The Ministers called on those Paris Club creditors, which had not provided
100 per cent relief on all past claims to do so rapidly. On domestic debt,
the Ministers noted that domestic debt financing burden in the HIPC
initiatives remained high because of the relatively high interest service
payments and short maturity structure. Moreover, the scope for expanding
domestic debt was complicated by their shallow financial depth and narrow
investor base.

"They (Ministers) were particularly concerned that in some countries
domestic debt and debt servicing was emerging as a major problem.

"They noted that this was partly a result of the increased Poverty
Reduction Strategy Programme poverty related expenditure commitments and
the volatility and shortfalls in aid flows, which had necessitated an
increase in domestic borrowing and/or arrears to domestic suppliers." The
Ministers said they recognised that the key for dealing with the high
domestic debt service burden lay in reducing the high cost of domestic
borrowing and extending the short maturities of existing debt. This implied
the need to maintain a low inflationary environment to ensure that both
nominal and real interest rates remained low. The Ministers emphasised that
donors should play a critical role in reducing the domestic debt stock
where it was high, especially in clearing arrears and reducing the stock of
treasury bills.

They also stressed the importance of donor assistance for financial sector
development that can help the HIPC initiatives lengthen the maturity
structure of their debt and broaden the investor base. "Ministers
reiterated their concern that the burden of domestic debt was curtailing
development prospects in a manner that could undermine political

They repeated their call on the Commonwealth to play a leading role in
advocacy for a comprehensive approach to address the domestic debt problem
within the context of the new debt sustainability framework.


Massive Response to International Petition Against Wolfowitz as World Bank
More than 1500 organisations and individuals have signed up in protest
against Wolfowitz nomination to World Bank Presidency
A multi-country petition to European Heads of State challenging the choice
of Paul Wolfowitz for World Bank president has met an unprecedented
response.  It has attracted 1,465 signatories from 68 countries. Alex
Wilks, Eurodad Coordinator, commented: "The massive and rapid response to
this strongly-worded petition is a sample of the anger on this issue. It
will increase pressure on European governments to take a firm stance and
declare their positions". The petitioners express "strong concern about the
nomination of Paul Wolfowitz for the World Bank president position" and
call on European governments to "take action to reject the current nominee
and press for other candidates".

For the debt movement, this increases the urgency of a deal on debt
cancellation for the poorest countries since many believe that Wolfowitz is
highly unlikely to be sympathetic. On 1 April, debt campaigners will target
G7 embassies around the world in a global day of action to call for a
strong deal on debt in 2005. This is part of the on-going campaign to build
pressure on the G7 to do a deal at the Spring Meetings of the World Band
and IMF between 15th and 17th April.

EURODAD would encourage you to spread the word to allies and partners
around the world and to visit an embassy or two that day.  Please keep us
informed of any activities you are planning and any outcomes.

It's not too late to protest the nomination of Wolfowitz to World Bank
President! Further information on the Wolfowitz petition and how to get
involved: <http://www.eurodad.org/>http://www.eurodad.org/

EURODAD welcomes suggestions of research reports, campaign actions,
meetings etc to announce on this list. Please send brief summaries of long
texts, and links to where they are available on-line. If you have problems
downloading from the web and would like to receive mentioned documents as
an e-mail attachment, please contact me.  New subscribers can sign up via
the EURODAD website:

Please email me with any comments, contributions and questions.


Gail Hurley
Avenue Louise 176, 8th Floor
1050 Brussels, Belgium
Tel: +32 2 543 90 68
Fax: +32 2 544 05 59
Email: <mailto:ghurley at eurodad.org>ghurley at eurodad.org
Website: <http://www.eurodad.org>www.eurodad.org

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