Africa's Debts to the IMF not fully cancelled by G-8
 
by Sophia Barkat




On June 11th, the world sighed in relief as they read the news about the greedy 
G-8 nations finally forgiving the debt of some of the poorest nations, namely
in Africa. About 11% of the world population live in Africa, and it's nations have 
among the lowest GNPs in the world. Debt-laden nations from Africa typically 
pay 20-30% of their national budgets on interest on G-8 loans to institutions like 
the World Bank, the IMF and other indirect and direct lending organizations. On 
top of that Africa has rising healthcare costs from  widespread AIDS/HIV and 
rising war-related devastation and expenses.


But as good as the news sounded, Jubilee Debt Campaign reports that it was
not all they had campaigned for. That major parts of the Debt had not been 
cancelled for most of Africa. Many of the poorest nations are still in debt to the 
IMF and the World Bank, though some of the nations debt's have been forgiven.


This is how the G-8 offer looks, says JDC:

Debt cancellation for countries reaching 'Completion Point' in the Heavily Indebted Poor Countries initiative. This is 18 countries at present. Another 9 countries may qualify soon, and up to 11 more could do so at some point. However, about 60 countries need debt cancellation to meet the Millennium Development Goals.

Cancellation of World Bank, African Development Bank and IMF
debts for these countries.  Recent statements had not included IMF
debt - the fact that the deal does now cover it is a tribute to the determination of campaigners. The IMF debt cancellation is to be paid for out of 'internal resources' - probably including money from a previous sale of IMF gold - and possibly some additional donor contributions.

Additional resources. This had been a sticking point. World Bank and African Development Bank debt cancellation will be paid for out of indebted countries' own aid allocations from the multilateral institutions. However, the G8 has promised to reimburse these institutions. These new contributions will not go just to the countries which have had their debts cancelled, but will be available to all poor countries. This means that debt cancellation for qualifying countries will not be fully funded; but on the other hand there will be some extra money available for other countries.

Debt stock cancellation. The deal writes off debt stocks in full, rather than just temporarily cancelling debt service (as the UK, Canada and the Netherlands had promised to do for some countries already). Campaigners had been calling for this full write-off, to free countries from the ongoing relationship of indebtedness.

A promise to look at Nigeria's debt situation. The communique states that Finance Ministers are "prepared to provide a fair and sustainable solution to Nigeria's debt problems".

G-8 Disagreements over Debt


The decision to cancel the debts of some of the nations came as a complete 
shock to the Finance Ministers involved. "We will not be able to reach an 
agreement,'' said German Finance Minister Hans Eichel going into the summit. 
"We're too far apart." 


Reason for the disagreement? 


Germany and France want nations to stop taking on more debt, if the aid is 
forgiven. The US and UK just want to pay down the debts of the 27 poorest 
nations but do not necessarily want to dismiss future loans to Africa via the 
World Bank and other regulatory institutions, reported Bloomberg.com on 
June 10th, before the G-8 Ministers met in London.  Jubilee Debt Campaign's 
report suggests this too: that UK, Canada and Netherlands were for complete
write-offs of the debts for some countries, and that the US basically joined the
band-wagon later, so to speak, on some nations. The Bush government said
it is linking the debt-cancellation to more privatization/globalization and more 
democratization, also.


But, the G-8, EU, NATO and other industrialized nations have trade imbalances
with the poor nations in Africa that are not just related to development debt. 
Many of them, for instance, are exporters of weapons to war-torn African nations, 
and have claims over African nations as such. So, much so, they would gladly
delay ending ethnic cleansing wars and genocides taking place in Africa right
now. 

According to Amnesty International,  "Sub-Saharan Africa is rich in human and 
natural resources and yet it is estimated that nearly half of its people live in poverty, 
surviving on less that US$1 a day. Life expectancy is 48 years and falling, while 
more than 28 million men, women and children are believed to have been infected 
with AIDS/HIV. Yet spending on health is reckoned to be a fraction of the amount 
spent on the arms trade. Some 20 per cent of the region's population is affected 
by civil or inter-state conflict. Millions of people have been forced to flee their 
homes to escape the fighting and the gross human rights abuses inflicted on the 
civilian population by warring parties."




EU and NATO squabble over who should lead mission to Darfur


Just as the G-8 met in London, their counterparts in NATO and the EU met in 
Brussels. Human Rights Watch states that the NATO and the European Union 
could not decide about protection for civilians in Darfur as they quarreled over 
who should take the lead in coordinating the airlift of African Union troops to the 
troubled western region of Sudan, just one of their agendas. "The priorities are 
profoundly wrong if NATO and the EU let their turf battle come before protecting 
the lives of civilians," said Peter Takirambudde, Human Rights Watch's Africa 
director. "NATO defense ministers meeting in Brussels and EU officials should 
work together to speed the airlift of African Union troops to Darfur." 


The European Union, the United States, Canada, Britain and others agreed on 
May 26 at a pledging conference in Addis Ababa to contribute an additional 
US$300 million in cash and kind to provide logistics, communications and other 
support for the African Union Mission in Sudan (AMIS). Current plans are to 
increase the 2,300 AMIS forces in Darfur to 7,700 before the end of September
which is still, an embarrassing number, especially when the UN Security
Council troops in the continent are undermanned and underfunded.


Although several African battalions are reportedly ready to be deployed to Darfur, 
NATO and members of the European Union have disagreed over which organization 
should coordinate the airlift for the troops from Rwanda, South Africa, Nigeria and 
Senegal.  Question arises if the delay is due to either parties involvement in 
arming the Sudanese Government to carry out the genocide -- just as it was in
Rwanda, South Africa, Nigeria and Senegal. 


A 1999 Amnesty International report said, "Deadly weapons reportedly from France, 
China, Belgium, South Korea, Israel and South Africa were later found in the 
arsenals of the killers" in Rwanda's civil-war. "The war has been exported to 
Congo....Throughout Africa, state repression and the arms and security trade 
are inextricably linked, whether it be the provision of electroshock batons to 
torturers in Angola, the use of tear gas and water-cannon against pro-democracy 
activists in Kenya, or the military training given to the Togolese security forces...
Most of these countries, indeed most of the world, have received arms, 
military and security equipment or training from a selectgroup which includes 
Bulgaria, China, France, Germany, Israel, Romania, the Russian Federation, 
South Africa, Ukraine, the United Kingdom and the USA." 


"The major European Union (EU) arms exporting countries - France, Germany,
Italy, Sweden and the United Kingdom - accounted for one third of the worldwide
arms transfer agreements signed between 1994 and 2001. The EU’s share
of the market was smaller than the United States and Russia, but it increased
on 1 May 2004 when ten new countries joined the EU. Some of these new Member
States have significant arms production and exporting activities. For example,
the enlarged EU will have over 400 companies in 23 countries producing small
arms & light weapons (SALW) - only slightly less than the USA. Such
a dramatic enlargement of the EU presents both potential opportunities and
dangers for European arms control," reported Amnesty in 2002.



Five of the nations named above are the Permanent Members of the UN Security
Council. Is it any wonder the UN Security Council has deliberately cut
troops in Peace-keeping Missions or delayed action in worn-torn Africa and why the
G-8 or EU or NATO can never decide on this matter?

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