Canadian campaigners condemn linking of debt relief to structural adjustment

Canadian campaigners have welcomed the announcement of Finance Minister Paul Martin on February 28th that he would cancel the debts of all HIPCs indebted to Canada (19 in total), which potentially could lead to cancellation of US$744 million of debt. However they have warned that countries will have to "jump through too many hoops before they see the benefits of debt relief."

Paul Martin's announcement followed pledges by Britain and USA to cancel 100% of bilateral debt owed by the Heavily Indebted Poor Countries (HIPC). It also followed a concerted campaign by the Canadian Jubilee Initiative for a 'Jubilee Budget' for the year 2000, which would include definitive debt cancellation for the world's poorest countries, increases in Official Development Assistance, and the elimination of child poverty in Canada.

The Canadian coalition called the announcement a "step forward," but criticised attaching debt relief to the controversial HIPC programme, which demands structural adjustment, a programme of economic conditions that continues to have a damaging impact on the poor in the debtor countries. John Dillon of the Jubilee Initiative said that Finance Minister Paul Martin's reliance on Structural Adjustment Programs, put countries in a "vicious spiral of debt, restructuring, weakened economies, and even greater debt."

"It's time for Canada to stop deferring debt cancellation and prolonging poor peoples' misery," said Dillon. He also pointed out the striking omission of severely indebted countries from the HIPC list such as Haiti and Nigeria.

A full critique of the controversial structural adjustment programmes is in a new report produced by the Canadian Ecumenical Coalition for Economic Justice. Called "A recipe for disaster", it says that the newly stated commitment by the IMF and World Bank to "poverty reduction" has merely seen the addition of social conditions into structural adjustment programmes (SAPs) without changing their essential neo-liberal character. It goes on to point out how these institutions, using the language of poverty reduction, are maintaining their power to dictate economic and social policies to sovereign states. It looks at how SAPs have evolved into detailed governance programs with unacceptable intrusion by the IMF and the World Bank into the affairs of sovereign states, and how women have become the "shock absorbers" for the harsh cuts imposed by SAPs.

The report concludes that SAPs are fundamentally flawed and should be abolished. They cannot be modified to serve poverty reduction goals.

The full report is available on-line at http://www.ecej.org/EJRDec99.htm