IMF to leave countries waiting for debt relief: campaigners

Debt-relief campaigners complained that some of the world's poorest countries could be left waiting indefinitely for much-needed funds under a plan by the IMF to carry out another review of economic policies.

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The Jubilee campaign group said at least six countries already promised cancellation of their debts by the International Monetary Fund will be kept waiting because of further checks demanded by the IMF.

Jubilee USA coordinator Debi Kar identified the six as Ethiopia, Madagascar, Mauritania, Nicaragua, Rwanda and Senegal.

"We're really concerned about this as that's fully one-third of the countries that the G8 had promised would get debt relief immediately," Kar told AFP.

"Our big concern is if they don't receive the debt cancellation as promised on January 1, when will they receive it? They've already had to wait years."

IMF directors are due to meet on December 21 to discuss how to proceed with a plan, first conceived by the Group of Eight powers in July, to annul the crippling debts of the 40 poorest countries.

About 38 billion dollars of the total promised as debt relief by the G8 powers -- which now stands at 56 billion dollars -- is owed to the World Bank.

The rest is owed to the IMF and the African Development Bank.

Among the 40 beneficiary countries, 18 were identified by the G8 as first in line to receive relief after they successfully completed a World Bank-IMF review called the Heavily Indebted Poor Countries (HIPC) initiative.

But the IMF argues that many of the countries attained HIPC status years ago, and so one more "spot check" is required to see if they are sticking to macroeconomic policies that will ensure the money is spent wisely.

"However, we are not setting a new higher hurdle here," Mark Allen, director of the IMF's policy development and review department, said last week.

"What we are doing is checking that the situation as of the (HIPC) completion point remains, broadly speaking, the situation still faced by those countries," he said.

An IMF spokeswoman said she could not comment on Jubilee's claims before next week's board meeting.

The IMF intends to extend debt relief to a total of 43 countries provided they all qualify under the HIPC programme in the weeks ahead.

But Kar said the IMF was in fact raising extra obstacles that could block debt relief for at least the six countries identified by Jubilee USA.

She noted IMF calls that Nicaragua, for instance, raise its electricity tariffs "as soon as possible" to head off a fiscal crisis.

"Nicaragua has privatized electricity and increased trade liberalization, but is still seen as off track," Kar said. "Its electricity rates have already tripled since privatization."

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