December 21, 2005

IMF To Extend 100 Percent Debt Relief for 19 Countries Under the Multilateral Debt Relief Initiative

The Executive Board of the International Monetary Fund (IMF) completed the assessment of the first group of countries eligible for relief under the historic Multilateral Debt Relief Initiative (MDRI). Following the discussion, Mr. Rodrigo de Rato, Managing Director of the IMF, made the following statement:

"I am delighted to announce that the IMF will grant 100 percent debt relief to 19 countries under the MDRI (including remaining HIPC assistance) amounting to SDR 2.3 billion (about US$ 3.3 billion). This is an historic moment, which will allow these countries to increase spending in priority areas to reduce poverty, promote growth, and to make progress towards achieving the Millennium Development Goals. These countries should receive this debt relief in early 2006.

"Bringing the MDRI to this stage since it was proposed in June 2005 has taken an intensive effort. I am proud of what the IMF has achieved in delivering debt relief in just six months.

"This represents the first phase of countries that will receive 100 percent debt relief under the MDRI. There are other countries that are also eligible, and at various stages on the road to qualification for MDRI relief. As they continue to make progress—and it is my hope that their progress will be rapid—we look forward to assisting them in joining those that we considered at this Board meeting.

"For this debt relief to take effect, the IMF still needs consents from some contributors to the PRGF Trust Subsidy Account, which is one of the sources of financing for MDRI resources for debt relief, and I urge the donors who have not yet done so to provide their consents as quickly as possible,” Mr. de Rato said.

The 19 countries that qualify as a result of today’s assessment include: Benin, Bolivia, Burkina Faso, Cambodia, Ethiopia, Ghana, Guyana, Honduras, Madagascar, Mali, Mozambique, Nicaragua, Niger, Rwanda, Senegal, Tajikistan, Tanzania, Uganda and Zambia.

What happened to Bob Geldofs' announcement?

"280million Africans will wake up for the first time in their lives without owing you or me a penny from the burden of debt that has crippled them and their countries for so long. Money we didn't even know we were owed and never wanted in the first place and money they could never pay". (DailyMail 11/06/05)

Six months after the 'historical' debt deal in June 05, Countries like Zambia have had to keep up their repayments!

In June 2005, UK Chancellor Gordon Brown said that the G8 had agreed debt
cancellation for 18 countries, to be delivered "immediately".

As of today (21th December 2005) no debt has been cancelled.

The International Monetary Fund (IMF) will cancel debts in January 2006
BUT not before it is satisfied that the 18 countries have passed a final 'health check'.

REMEMBER The 18 countries have already spent years implementing undemocratic
and often harmful conditions demanded by creditors.

YET after all the media hype surrounding the G8 announcement 'an historic deal'
6 countries (Ethiopia, Madagascar, Mauritania, Nicaragua, Senegal and Rwanda)
of the 18 countries are faced with the possability of not qualifying for Debt Cancellation.

The final decision on which countries will get cancellation is to be made at an IMF meeting in Washington DC on Wednesday 21 December 2005.