Paralysis in Prague: tell the IMF & World Bank to release their stranglehold on debt

Creditors have once again failed to make substantial progress on delivering deeper and swifter debt cancellation, despite the opportunity presented by the IMF/World Bank meetings in Prague, where thousands of Jubilee 2000 supporters held a funeral procession to mourn the 19,000 lives lost daily due to debt.

There were only minor developments on debt:

• If oil prices continue to rise, creditors might consider increasing debt relief at completion point in the Heavily Indebted Poor Countries initiative. This would do no more than offset the increased burden of higher oil costs.
• The case of Zambia was discussed fully, as it will face increased debt service payments after HIPC – creditors will have to provide extra debt relief or grant assistance. This exposes the total inadequacy of HIPC.
• IMF Managing Director Horst Köhler reaffirmed his wish to see a “bolder step” on debt, but gave no details. The IMF may be prepared to increase 'front-loading' of debt relief – this would mean greater reduction of debt service payments early on, but not additional cancellation.
• Canadian finance minister, Paul Martin, expressed his frustration at the slow pace of HIPC, and called for a bilateral moratorium on debt service - for countries already at decision point in the HIPC initiative. However, Mr Martin's call got no backing from his G7 colleagues.

In addition, the IMF and World Bank confirmed their schedule for at least another 10 countries to reach decision point in the HIPC initiative by the end of this year. Even meeting the original pledge to get 25 countries through would be inadequate: on average debt repayments are being reduced by only one-third, so even countries which do receive debt relief will still be paying more on debt than on health.

What now?

It is vital to show the IMF and World Bank that we are as passionate as ever about the need for urgent action to break the chains of debt. The creditors have failed to deliver a solution to the debt crisis. The World Bank and IMF must match the G7's pledge to deliver 100 per cent cancellation – and extend it to reach more countries. And it is time for a new, independent process to provide an equal voice to creditors and debtors. Debt cancellation must no longer be tied to unfair, externally-imposed economic conditions.

What you can do

Write to the key governors of the IMF and World Bank
Express your dismay at their inaction and call on them to release their stranglehold on debt cancellation. Point out that the small steps on debt in Prague merely serve to highlight the failure of the HIPC initiative. Tell them their rhetoric on debt rings hollow without further concrete action, and demand 100 per cent cancellation and a new process.

Key World Bank Governors

Paul Martin

Minister of Finance

140 O'Connor, 21st Floor, East Tower

Ottowa,

Ontario K1A 0S5

Canada

Fax: +1 613 992 4291

Email: pmartin@fin.gc.ca

 

Laurent Fabius

Ministere de l'economie, des finances et de l'industrie,

139 Rue De Bercy

75572 Paris

France

Fax: +33 1 53 17 13 05

 

 

Heidemarie Wieczorek-Zeul,

Bundesministerium für wirtschaftliche Zusammenarbeit und Entwicklung,

Europahaus,

Stresemannstraße 92

10963 Berlin

Germany

Fax: +49 30 2503-4847

Email: poststelle@bmz.bund.de

 

Kiichi Miyazawa

Minister of Finance

1-1 Kasumigaseki 3-chome

Chiyoda-ku, Tokyo

Japan

Fax: +81 3 52 51 2161

Email: info@mof.go.jp

 

Clare Short

Secretary of State for International Development

DFID

94 Victoria Street

London, SW1E 5JL

UK

Fax: +44 20 7917 0016

 

 

Larry Summers

US Treasury

1500 Pennsylvania Avenue, NW

Washington D.C. 20220

USA

Fax: +1 202 622 6415

Key IMF Governors

Paul Martin

Minister of Finance

140 O'Connor, 21st Floor, East Tower

Ottowa,

Ontario K1A 0S5

Canada

Fax: +1 613 992 4291

Email: pmartin@fin.gc.ca

 

Laurent Fabius

Ministere de l'economie, des finances et de l'industrie,

139 Rue De Bercy

75572 Paris

France

Fax: +33 1 53 17 13 05

 

Kiichi Miyazawa

Minister of Finance

1-1 Kasumigaseki 3-chome

Chiyoda-ku, Tokyo

Japan

Fax: +81 3 52 51 2161

Email: info@mof.go.jp

 

Larry Summers

US Treasury

1500 Pennsylvania Avenue, NW

Washington D.C. 20220

USA

Fax: +1 202 622 6415

 

Ernst Welteke

Bundesministerium der Finanzen

Wilhelmstr. 97

10117 Berlin

Germany

Fax: +49 30 22 42-32 58

Email: Poststelle@bmf.bund.de

 

 

Vincenzo Visco

Ministro del Tresoro

Via XX Settembre, 97

00187 Roma

Italy

 

 

Gordon Brown,

Chancellor of the Exchequer

HM Treasury, Parliament Street

London SW1P 3AG

UK

Fax: +44 20 7270 4580

Email: info@hm-treasury.gov.uk