Lawmakers press IMF on G8 poor country debt deal

U.S. lawmakers on Monday urged the International Monetary Fund to erase the debts of 18 poor countries, as mandated by the Group of Eight nations, while aid groups warned the deal may be under threat.

Six members of the House of Representatives Financial Services and International Relations panels, including Iowa Republican James Leach and California Democrat Maxine Waters, wrote to IMF Managing Director Rodrigo Rato urging the fund to cancel the debts "without further delays or conditions."

"We are deeply concerned that the IMF is now back-tracking on this commitment," they said in the letter, a copy of which was also sent to U.S. Treasury Secretary John Snow.

Development activists and aid groups have warned that debt forgiveness pledged to 18 of the world's poorest nations may not emerge from an IMF board meeting on Wednesday in the form envisioned at a G8 leaders' summit in Scotland this summer.

Oxfam and Jubilee USA said six nations -- Ethiopia, Madagascar, Mauritania, Nicaragua, Senegal and Rwanda -- may have to wait for their debt write-offs until they meet certain economic goals mandated by the IMF.

Others slated to receive debt relief from the IMF, World Bank and African Development Bank under the G8 deal are Benin, Bolivia, Burkina Faso, Zambia, Uganda, Cambodia, Tajiksitan, Ghana, Honduras, Guyana, Niger and Mali.

IMF spokeswoman Gita Bhatt said that to qualify for the 100 percent debt relief, countries need to show good performance in macroeconomic policies, poverty reduction measures and public expenditure management.

"Which countries qualify will only be decided by the board," she said.

Mark Allen, the IMF's director for policy development, said last week the "spot check" is not meant to create new hurdles, but instead to ensure economic conditions have not eroded since a program qualifying them for debt relief ended.

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

Still, Oxfam policy advisor Max Lawson said the potential stumbling block amounts to "the most negative interpretation of the words that were used at the G8," where rich nations pledged debt cancellation after a series of "Live 8" concerts heightened global focus on the issue.

U2 rocker and humanitarian Bono was this week named Time Magazine's "Person of the Year," along with philanthropists Bill and Melinda Gates, for his role brokering the G8 deal.

Oxfam's Lawson said debt forgiveness should apply to all 18 countries in January so funds can go immediately to schools, hospitals, and other pressing needs.

"They have jumped through enough hoops already," he said.


By Laura MacInnis

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