Privatization hangs over G8 debt relief
Note well, as per the below article, that in writing off the debt of
Africa's 18 poorest countries, the agreement laid down by G8 finance
ministers "contains a provision on privatisation that has the potential
to deliver to them more money than they wrote off". In other words, G8
debt relief is mostly about free trade with massive benefits for the
world's richest nations, and with scant to zero benefit for Africa's
poorest nations who refuse, or are unable, to comply with IMF, WB, and
also WTO guidelines,regulations and demands.
And does the G8 handout have a gender component? Not unless it's buried
deeply underneath the massive rhetoric which hails the crumbs thrown in
the direction of Africa over the past few days!
Read on for more on the G8's self-serving "generosity"! - Lynette
DAWN -- Pakistan
Tuesday June 14 2005-- Jamadi Al Awwal 06, 1426 A.H.
Privatization hangs over G8 debt relief
By Sanjay Suri
LONDON: The G8 finance ministers agreed on Saturday to write off the
debt of 18 of the poorest countries, but firm prescriptions of
privatisation hovered over the debt relief offer. Finance ministers
from the Group of Eight of the world’s leading industrialised nations
United States, Canada, Japan, Britain, France, Germany, Italy and
Russia agreed to write off 100 per cent of the debt of 18 of the
poorest countries, mostly in sub-Saharan Africa. That will amount to
debt cancellation of about two billion dollars a year.
Campaigners focusing on debt relief welcomed the move. But the finance
ministers’ agreement contains a provision on privatisation that has the
potential to deliver to them more money than they wrote off.
The ministers reaffirmed in a statement at the end of their two-day
meeting on Saturday that “in order to make progress on social and
economic development, it is essential that developing countries put in
place the policies for economic growth.” Among these, they must “boost
private sector development, and attract investment,” and ensure “the
elimination of impediments to private investment, both domestic and
The ministers committed themselves to a successful outcome for the Doha
Development Agenda, agreed at the World Trade Organisation’s
ministerial meeting in the Qatar capital in 2001.
This, they said, “delivers substantial increases in market access for
developing countries, establishes a timetable for the elimination of
all trade-distorting export support in agriculture, and provides
effective special and differential treatment for developing countries.”
The commitment to “elimination of all trade-distorting export support
in agriculture” stops well short, however, of an agreement to end
subsidies to farmers in rich countries, estimated at more than 300
billion dollars a year. It is these subsidies rather than specific
programmes to support exports that have created artificially low prices
for Western produce that are choking exports from developing countries.
The ministers said they recognise that “not all countries will benefit
in the short term from reductions in trade barriers.” The ministers
committed themselves to “provide support to enable developing countries
to benefit from trade opportunities.”
The ministers picked the example of Nigeria to stress that their
recommended way to reforms lies through embracing the policies of the
International Monetary Fund (IMF).
“Nigeria is key to the prosperity of the whole continent of Africa,”
they said in their statement. “We welcomed Nigeria’s progress in
economic reform as assessed in the IMF’s intensified surveillance
framework... and encouraged them to continue to reform.” In turn they
said “we are prepared to provide a fair and sustainable solution to
Nigeria’s debt problems in 2005.”
It became clear that the International Finance Facility (IFF) pushed by
Britain’s Chancellor of the Exchequer (finance minister) Gordon Brown
had failed to win significant support from other G8 countries.
The IFF, a scheme to raise money in government bonds to be paid off
through later aid pledges, was agreed as just one option. The
Millennium Challenge Account (MCA) of the United States, which ties aid
grants to pledges of good governance including the US fight against
terrorism, remains in place as the preferred US way.
France and Germany are giving their backing to some of the
recommendations of the Landau Report (named after French Inspector of
Finances Jean-Pierre Landau), particularly its proposal for a
contribution on air travel tickets to support specific development
projects and to refinance the IFF.
The G8 finance ministers clearly failed to agree a unified path of
movement towards the Millennium Development Goals (MDGs), set by the
United Nations in 2000. Little further progress is expected on this
front before the G8 leaders summit in Gleneagles in Scotland, July 6-8.
Unanimity emerged only over debt cancellation for what are known as
Heavily Indebted Poor Countries (HIPC). But the small print here too
indicates that this was not unanimity on unconditional support. The
HIPC countries have been told that any additional donor contributions
will rest on “performance-based allocation systems”, and that such
action will ensure that “assistance is based on country performance.”
The World Bank has been made the monitor for these countries’ moves
towards “good governance, accountability and transparency.” These
declared aims are inevitably open to endless interpretation.
The 100 per cent debt cancellation further holds only for HIPCs “that
are on track with their programmes of repayment obligations and
adjusting their gross assistance flows by the amount forgiven.” That
is, the debt will be “forgiven” only to countries that can show they
were in the process of repaying. While the debt cancellation will no
doubt provide immediate relief, there is enough in the stated package
to raise some questions what these countries may have to do next.
The finance ministers agreed that they will use grant financing to
“ensure that countries do not immediately re-accumulate unsustainable
external debts, and are eased into new borrowing.” On just how they
proceed from here, the HIPCs may have no choice but to look to the
World Bank and the IMF to show them the way.Dawn/The IPS News Service