IMF may delay debt relief for poor six
Six of the world's poorest countries face the prospect of being left out of a much-hyped Group of Eight (G8) debt forgiveness plan when the International Monetary Fund (IMF) board meets to implement the deal.
In an IMF memo to board members obtained by Reuters, the global lender's staff recommended the debts of Ethiopia, Madagascar, Mauritania, Nicaragua, Rwanda and Senegal not be written off until they take steps to fix macroeconomic and government spending management problems.
The memo said these six countries "will qualify for (Multilateral Debt Relief Initiative) relief when the board determines that the identified remedial actions have been taken, and that a satisfactory performance has been maintained with respect to the other qualification criteria".
The IMF board is expected to make a statement on the issue after its meeting on Friday.
The Group of Eight club of rich nations - the United States, Britain, France, Germany, Italy, Canada, Japan and Russia - agreed in July to cancel the debts some of the globe's most impoverished nations owe to the World Bank, IMF and African Development Bank.
Development activists and lawmakers on Capitol Hill said narrowing the deal's scope would violate the spirit of the accord ratified by IMF and World Bank member states at the global lenders' annual meetings in Washington in September.
Rock star Bono, of U2 fame, was this week named Time Magazine's Person of the Year, along with philanthropists Bill and Melinda Gates, for pushing world leaders into a debt relief deal through lobbying and a series of Live 8 concerts held just before the Scotland summit.
In the December 8 memo, staff at the global lender recommended that 14 countries - Benin, Bolivia, Burkina Faso, Cambodia, Ghana, Guyana, Honduras, Mali, Mozambique, Niger, Tajikistan, Tanzania, Uganda and Zambia - all qualify to have their debts wiped out immediately by the fund.
For the other six countries in the original G8 deal, there are stumbling blocks, the memo said.
It noted there is no IMF program in place in Ethiopia and said macroeconomic pressures are emerging there - particularly in the balance of payments - that need redress.
In Madagascar, the fund said the country needed to show "evidence that fourth-quarter tax revenue performance is in line with staff projections and an agreement has been reached on a 2006 budget that is consistent with the authorities' macroeconomic objectives".
IMF staff said Nicaragua's implementation of a fund-supported program "has not been satisfactory until recently" and urged the board to delay debt relief until after the fund's next review.
It said policy slippages had occurred in Rwanda since the last review of that country's IMF program, in August 2005, and said another review is needed before debt relief is granted.
Mauritania was cited for having no fund deal and for a "substantial deterioration" in budget formulation, execution, reporting and public expenditure tracking.
It urged debt forgiveness in Senegal be suspended until the country deals with weakening procurement practices and large extra-budgetary operations related to a new airport in Dakar.
Development activists, including the aid group Oxfam, have decried the IMF's potential narrowing of the G8 deal and some US lawmakers have written to IMF Managing Director Rodrigo Rato urging full debt cancellation "without further delays or conditions".
In an IMF memo to board members obtained by Reuters, the global lender's staff recommended the debts of Ethiopia, Madagascar, Mauritania, Nicaragua, Rwanda and Senegal not be written off until they take steps to fix macroeconomic and government spending management problems.
The memo said these six countries "will qualify for (Multilateral Debt Relief Initiative) relief when the board determines that the identified remedial actions have been taken, and that a satisfactory performance has been maintained with respect to the other qualification criteria".
The IMF board is expected to make a statement on the issue after its meeting on Friday.
The Group of Eight club of rich nations - the United States, Britain, France, Germany, Italy, Canada, Japan and Russia - agreed in July to cancel the debts some of the globe's most impoverished nations owe to the World Bank, IMF and African Development Bank.
Development activists and lawmakers on Capitol Hill said narrowing the deal's scope would violate the spirit of the accord ratified by IMF and World Bank member states at the global lenders' annual meetings in Washington in September.
Rock star Bono, of U2 fame, was this week named Time Magazine's Person of the Year, along with philanthropists Bill and Melinda Gates, for pushing world leaders into a debt relief deal through lobbying and a series of Live 8 concerts held just before the Scotland summit.
In the December 8 memo, staff at the global lender recommended that 14 countries - Benin, Bolivia, Burkina Faso, Cambodia, Ghana, Guyana, Honduras, Mali, Mozambique, Niger, Tajikistan, Tanzania, Uganda and Zambia - all qualify to have their debts wiped out immediately by the fund.
For the other six countries in the original G8 deal, there are stumbling blocks, the memo said.
It noted there is no IMF program in place in Ethiopia and said macroeconomic pressures are emerging there - particularly in the balance of payments - that need redress.
In Madagascar, the fund said the country needed to show "evidence that fourth-quarter tax revenue performance is in line with staff projections and an agreement has been reached on a 2006 budget that is consistent with the authorities' macroeconomic objectives".
IMF staff said Nicaragua's implementation of a fund-supported program "has not been satisfactory until recently" and urged the board to delay debt relief until after the fund's next review.
It said policy slippages had occurred in Rwanda since the last review of that country's IMF program, in August 2005, and said another review is needed before debt relief is granted.
Mauritania was cited for having no fund deal and for a "substantial deterioration" in budget formulation, execution, reporting and public expenditure tracking.
It urged debt forgiveness in Senegal be suspended until the country deals with weakening procurement practices and large extra-budgetary operations related to a new airport in Dakar.
Development activists, including the aid group Oxfam, have decried the IMF's potential narrowing of the G8 deal and some US lawmakers have written to IMF Managing Director Rodrigo Rato urging full debt cancellation "without further delays or conditions".
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