G7 divided on debt relief for Africa

[Said1]

G7 still divided on debt relief for Africa

In spite of agreeing to consider International Monetary Fund gold sales, the Group of Seven industrialised countries will have to shift their positions much further to agree a package on African aid debt relief in time for their summit this summer.


Finance ministers from the world's seven richest nations devoted most of their weekend meeting in London to Africa's grinding poverty. But their closing statement revealed just how far they have to go to reconcile old differences on how best to help Africa if they are to agree concrete assistance at their leaders' summit in Gleneagles, Scotland.

“We are agreed on a case-by-case analysis of HIPC [highly indebted poor] countries, based on our willingness to provide as much as 100 per cent multilateral debt relief,” the ministers said. But the reference to the HIPC, which would limit the eligible countries, showed that agreement on broader debt relief was not secured.

The stress on a “case-by-case” basis was designed to meet German concerns about the dangers of blanket debt relief for all debtors. The phrase “as much as” was inserted because some G7 members, including Japan, oppose 100 per cent debt relief of all debt.

Domenico Siniscalco, the Italian finance minister, described how the awkward compromise was reached: “On the wording of the debt relief we started with ‘100 per cent', which then became ‘up to 100 per cent' and ended with ‘as much as 100 per cent'.”

Even among countries that support 100 per cent relief, large differences remain. The US favours writing off the stock of multilateral debt, most of which is owed to the World Bank. Canada, the UK and other European countries focus on reducing the burden of debt service paid to international institutions.

At the end of the meeting, John Taylor, the US Treasury undersecretary for international development, said: “We continue to think our proposal is the best.” He hoped other countries would soon come round to the US view. The UK signalled otherwise, announcing that it would pay 10 per cent of World Bank debt servicing costs for another 17 poor countries.

Agreement on increasing aid was just as elusive. The G7 agreed to set up a “work programme” to examine each country's favoured scheme. The US and Canada poured cold water on the UK's idea of an International Finance Facility to borrow money against future aid flows and to pay off the accumulated borrowing out of subsequent aid budgets.

“Do you really believe that you can scoop money from 10 years from now and not have a problem in seven or eight or nine years,” asked Ralph Goodale, the Canadian finance minister. “To put it bluntly, you have to make sure you're not robbing Peter to pay Paul.”

European countries were more supportive, particularly of the Italian proposal for a pilot IFF to fund general immunisation as well as new vaccines for HIV/Aids. But they stressed the need to refinance any borrowing.

Continued

 

[NATO AIR]

here's how it should work

any loans made to a government in the Cold War that was ruled by a dictator or military junta are instantly forgiven.

any loans made to a government ruled by a Marxist or Maoist piece of garbage, instantly forgiven.

any loans made to a government after the Cold War that was ruled by a dicator or military junta, forgiven after ensuring the savings are spent on the people of that nation, not nice shiny military hardware or new palaces for the elite.

we gave out a lot of money to nations in the Cold War that were not "democracies", but were ruled by OUR SOB's, who often used most of that money for themselves and their private bank accounts. to hold these nations, now mostly struggling democracies, accountable for our own past errors, is a terrible mistake.

let's close the book on this part of the past and free these nations of crippling debt.

on their own, with reform-minded foreign assistance like the MCA, then we will see whether or not they are for real.

 

[Johnney]

we need to be very very choosy who we give 100% forgivness to.
just because some of the third worlds we gave loans to werent paying them back in the first place doesnt mean we should forgive them. and how much of what we loaned actually went for what it was intended for? :fifty:

 

[NATO AIR]

we need to be very very choosy who we give 100% forgivness to.
just because some of the third worlds we gave loans to werent paying them back in the first place doesnt mean we should forgive them. and how much of what we loaned actually went for what it was intended for? :fifty:

Many of those loans made during the Cold War were to dictators and juntas held accountable by no one and kept in power by the fact they were pro-American. An "excess" of the Cold War that I have come to agree (out of a growing maturity I hope) was necessary to win. We will always have "our SOB's", but in the end, the people those SOB's rule over with impunity should not have to pay the price for those SOB's getting loads of money from the US and other allies and not spending it on the nation, but on themselves.