News Release

· Do They Know It’s Christmas Time: IMF Blocks the G8 Debt Deal · Bolivia Elections


In its meeting starting Wednesday, the International Monetary Fund is reportedly planning to announce that it is partially canceling the debt reduction deal originally agreed by world leaders in the G8 meeting last summer. (Meanwhile U2 rocker Bono has been named a Time Magazine “Person of the Year.” He played a leading role in brokering the G8 deal.)

Green is a press officer with Oxfam. She said today: “In July the G8 announced total cancellation of 18 countries’ debts to the International Monetary Fund, the World Bank and the African Development Fund. The IMF is now set to take up to six countries off this list and only approve countries that pass its own further, strict economic policy tests. This means millions of dollars that these countries could spend on schools and hospitals will now be delayed until they dance to the IMF tune. … It seems somewhat unbelievable that the IMF is now boldly undoing the debt deal announced by the G8 and agreed at its own annual meetings in September. That they are trying to get away with secretly slashing the deal despite the public agreement earlier this year is scandalous … Having fulfilled internationally agreed conditions for debt cancellation, [these] poor countries could now find that the goal posts have been shifted.”
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Dossani is the director of the 50 Years Is Enough Network. Njehu is the executive director of Solidarity Africa Network in Action in Nairobi, Kenya. Ambrose is policy analyst with Solidarity Africa Network.

Njehu said today: “After decades during which dozens of countries struggled under insurmountable debts contracted by dictators and corrupt officials for questionable purposes, the wealthiest countries have finally acknowledged that their debt system is unsustainable, and that 100 percent multilateral debt cancellation is absolutely necessary to reduce poverty. Now, all too typically, the IMF – largely controlled by the same G8 that came up with the plan — is trying to quietly reverse that landmark decision.”

Ambrose said today: “Four of the six countries (Ethiopia, Madagascar, Mauritania and Nicaragua) for which cancellation is in jeopardy either have no current IMF program or have one which will expire by the end of 2005. The main function of the debt system is to maintain control over countries’ economic policy, so it makes sense that the IMF would make sure that no country finds a way to escape IMF oversight.”

Dossani said today: “The IMF has taken an approved proposal which allowed for no delays or new conditions on the countries slated to have their debts canceled, and devised a new set of conditions and potential delays.”
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An economist and co-director of the Center for Economic and Policy Research, Weisbrot said today: “Evo Morales’ election in Bolivia will be seen and analyzed here mostly in political terms. … But we would do well to step back from the politics for a moment and look at this election in economic terms. Bolivia has also been subject to IMF agreements almost continuously (except for eight months) since 1986. And it has done what the experts from Washington have wanted, including privatizing nearly everything that could be sold. … The country’s Social Security system was also privatized. But nearly 20 years of these structural reforms — or ‘neoliberalism’ as Morales and most Latin Americans call it — have brought little in the way of economic benefits to the average Bolivian. Amazingly, the country’s per capita income is actually lower today than it was 25 years ago. … Evo Morales is now the sixth candidate in the last seven years to win a presidential race while campaigning explicitly against ‘neoliberalism.’ The others were in Argentina, Brazil, Venezuela, Ecuador, and Uruguay. And there will likely be more in the near future, as there are 10 more presidential elections scheduled in Latin America over the next year.”
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For more information, contact at the Institute for Public Accuracy:
Sam Husseini, (202) 347-0020; or David Zupan, (541) 484-9167