UPDATE 3-IMF oks debt relief for 19, waits on Mauritania
The International Monetary Fund's executive board on Wednesday agreed to write off $3.3 billion owed to it by 19 of the world's poorest countries but delayed forgiving Mauritania's debt.
"This is an historic moment, which will allow these countries to increase spending in priority areas to reduce poverty, promote growth," IMF Managing Director Rodrigo Rato said after the two-hour board meeting.
Development activists welcomed the debt relief and said they were pleased the deal, struck by the Group of Eight rich nations in July with much fanfare, was not narrowed by the IMF board as drastically as some had feared.
An internal IMF staff memo, dated Dec. 8 and obtained by Reuters this week, had recommended the board delay debt relief to six nations -- Ethiopia, Madagascar, Mauritania, Nicaragua, Rwanda and Senegal -- until macroeconomic and government accounting problems were addressed.
A group of Capitol Hill lawmakers wrote to the IMF and U.S. Treasury urging full debt cancellation "without further delays or conditions," and aid activists staged a rally outside the lender of last resort's Washington headquarters this week.
Ultimately, IMF directors agreed in what fund spokesman Thomas Dawson described as "a harmonious board meeting" to cancel the debts of 19 countries, effective early 2006.
Those approved for IMF debt relief are Benin, Bolivia, Burkina Faso, Cambodia, Ethiopia, Ghana, Guyana, Honduras, Madagascar, Mali, Mozambique, Nicaragua, Niger, Rwanda, Senegal, Tajikistan, Tanzania, Uganda and Zambia.
The one country deemed ineligible for immediate debt forgiveness, Mauritania, should be able to get the write-off in coming months, Dawson told reporters on a conference call.
"We are optimistic that once the required policy options are taken, Mauritania will be positioned to receive 100 percent debt relief," he said without specifying the areas of concern.
The IMF's leaked Dec. 8 memo had cited Mauritania for a "substantial deterioration" in budget formulation, execution, reporting and public expenditure tracking. A detailed statement from the board's Wednesday meeting is expected within a week.
MONEY FOR HEALTH, EDUCATION
While declining to comment on reports the IMF board was considering delaying debt relief for six countries, Dawson stressed the fund's country assessments "are not sort of snapshots frozen in time."
"As the decision gets closer, more information was available," he said. "In a number of countries there have been missions in the country just very recently, so indeed, it's not terribly surprising that additional information comes forward and that different decisions are taken."
British finance minister Gordon Brown praised the IMF decision, expected to trigger similar moves by the World Bank and African Development Bank, whose debts were also written off under the G8 deal.
"Today's decision will ensure that urgently needed resources are made available now in the world's poorest countries to tackle poverty and provide essential health and education," Brown said in a statement.
U2 rock star and humanitarian Bono was named one of Time Magazine's three people of the year this week for his role brokering the deal among the G8: the United States, Canada, France, Italy, Germany, Britain, Japan and Russia.
Jamie Drummond, executive director Bono's DATA lobby group -- which stands for Debt, AIDS, Trade, Africa -- praised the IMF for acting on the debt cancellation and said Mauritania's exclusion did not necessarily mar the deal.
"We were worried that more countries wouldn't get debt cancellation through the IMF, so we're relieved 19 are," Drummond said. He called the IMF debt relief "a modest down payment on what needs to come."
Oxfam policy adviser Max Lawson said more help was needed.
"The IMF must now deliver the funding quickly and without any further delay," he said. "The next step is for the IMF to cancel the debts of over 60 countries that urgently need the funds to help end poverty."
By Laura MacInnis
"This is an historic moment, which will allow these countries to increase spending in priority areas to reduce poverty, promote growth," IMF Managing Director Rodrigo Rato said after the two-hour board meeting.
Development activists welcomed the debt relief and said they were pleased the deal, struck by the Group of Eight rich nations in July with much fanfare, was not narrowed by the IMF board as drastically as some had feared.
An internal IMF staff memo, dated Dec. 8 and obtained by Reuters this week, had recommended the board delay debt relief to six nations -- Ethiopia, Madagascar, Mauritania, Nicaragua, Rwanda and Senegal -- until macroeconomic and government accounting problems were addressed.
A group of Capitol Hill lawmakers wrote to the IMF and U.S. Treasury urging full debt cancellation "without further delays or conditions," and aid activists staged a rally outside the lender of last resort's Washington headquarters this week.
Ultimately, IMF directors agreed in what fund spokesman Thomas Dawson described as "a harmonious board meeting" to cancel the debts of 19 countries, effective early 2006.
Those approved for IMF debt relief are Benin, Bolivia, Burkina Faso, Cambodia, Ethiopia, Ghana, Guyana, Honduras, Madagascar, Mali, Mozambique, Nicaragua, Niger, Rwanda, Senegal, Tajikistan, Tanzania, Uganda and Zambia.
The one country deemed ineligible for immediate debt forgiveness, Mauritania, should be able to get the write-off in coming months, Dawson told reporters on a conference call.
"We are optimistic that once the required policy options are taken, Mauritania will be positioned to receive 100 percent debt relief," he said without specifying the areas of concern.
The IMF's leaked Dec. 8 memo had cited Mauritania for a "substantial deterioration" in budget formulation, execution, reporting and public expenditure tracking. A detailed statement from the board's Wednesday meeting is expected within a week.
MONEY FOR HEALTH, EDUCATION
While declining to comment on reports the IMF board was considering delaying debt relief for six countries, Dawson stressed the fund's country assessments "are not sort of snapshots frozen in time."
"As the decision gets closer, more information was available," he said. "In a number of countries there have been missions in the country just very recently, so indeed, it's not terribly surprising that additional information comes forward and that different decisions are taken."
British finance minister Gordon Brown praised the IMF decision, expected to trigger similar moves by the World Bank and African Development Bank, whose debts were also written off under the G8 deal.
"Today's decision will ensure that urgently needed resources are made available now in the world's poorest countries to tackle poverty and provide essential health and education," Brown said in a statement.
U2 rock star and humanitarian Bono was named one of Time Magazine's three people of the year this week for his role brokering the deal among the G8: the United States, Canada, France, Italy, Germany, Britain, Japan and Russia.
Jamie Drummond, executive director Bono's DATA lobby group -- which stands for Debt, AIDS, Trade, Africa -- praised the IMF for acting on the debt cancellation and said Mauritania's exclusion did not necessarily mar the deal.
"We were worried that more countries wouldn't get debt cancellation through the IMF, so we're relieved 19 are," Drummond said. He called the IMF debt relief "a modest down payment on what needs to come."
Oxfam policy adviser Max Lawson said more help was needed.
"The IMF must now deliver the funding quickly and without any further delay," he said. "The next step is for the IMF to cancel the debts of over 60 countries that urgently need the funds to help end poverty."
By Laura MacInnis
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