Daily Press Cuttings

Thursday 15th June 2000

FT: Nigeria: Jeffrey Sachs article "Give poor Nigeria a chance" stressing the need for debt cancellation and increased aid. The country is rocked by riots and unrest stemming from profound impoverishment and financial destabilisation but western countries are at imminent risk of failing to support a rare chance for Nigerian democracy. After several inadequate debt reschedulings, foreign debt stands at about 100 per cent of gross domestic product and is massively in arrears. The moment for debt cancellation and increased, well-designed aid is both urgent and propitious. Stringent IMF led measures including massive debt servicing ($1.5bn, or 4 per cent of GDP) and a denial of debt cancellation are a guaranteed trigger of violence. Killing the new democracy with austerity, while denying Nigeria even a penny of debt cancellation is beyond logic. Mr Sachs goes on to argue against the western public belief that Nigeria is a rich country. For example oil production, by far Nigeria's major export earner, only generates about 31 cents a day per person. The argument that Nigeria is too corrupt fails to recognise the new internationally respected leadership of President Obasanjo. Eloquent words of support for multilateral debt reduction by US Treasury Lawrence Summers now need to be turned into a new concrete policy. The G7 must recognise the need for debt cancellation , which in turn would prompt a change in the IMF's destructive negotiating position on the ground in Nigeria. Africa/G8 summit: Letter from Jeremy Smith in response to an article by Douglas Hurd ("Africa must make its own peace"). The letter criticises the diagnosis that debt cancellation is "irrelevant" when sub-Saharan African governments still transfer $292m a week in debt repayments to their far richer creditors. Debt cancellation must top the agenda of the G8 Okinawa summit. Mr Smith suggests a global debt challenge with payments suspended for the poorest countries for a period, and cancellation following when commitment to using the benefit for public services is shown. World Bank: Author of the World Bank's annual World Development Report has resigned after a dispute over the appropriate role of free markets in developing countries. Also reported in The Guardian. Military spending: SIPRI report states that world military spending has increased by 2.1 per cent last year to $780bn. Indonesia: Following April negotiations with the Paris Club, Indonesia and the steering committee of the London Club of commercial lenders have now agreed to reschedule $340m (£225m) of government debt that falls due in March 2002.

Wall Street Journal: IMF: "Letter from America" by Claudia Rosett which suggests that the new movie "Mission: Impossible 2" is a good title for US Treasury attempts at genuine IMF reform. The IMF's adventures in recent years have been rife with crashing markets; bailouts leading to bloodshed in Indonesia and embezzlement in Russia; and devastating currency devaluation's. The US Treasury supplies by far the biggest hard currency slice of the approx. $270bn in IMF capital and expects some policy favours in return, a deep attachment described as a "love interest!" The "latest twist in plot" is a report by the Meltzer Commission which urges redefinition of IMF goals, for example to "stop trying to micromanage the governments of the developing world." However, Treasury Secretary Summer's response was that proposed reforms "would no longer be able to serve vital US interests." Treating the IMF as a big slush fund, available as both bait and bully-club to prompt wanted behaviour from client nations, serves the interests of the US State Department. The article concludes by suggesting that with usable funds of around $109bn there is small reason for the IMF to listen to it's critics.

Guardian: Africa: Economics correspondent Charlotte Denny reports that for Africa "the only way is up." Although arguing that Africa is not "uniquely doomed", the article highlights the scale of the challenge. Africans today are poorer on average than they were 40 years ago with the region's output not much more than Belgium's. Africa needs the West to deliver on its promise of generous and speedy debt relief, together with conflict resolution, a stable world economy, a good WTO deal, a global education compact to match the debt plan, stable politics and stable aid budgets.

Haiti: Report that one of the poorest countries in the world is being drawn into a destabilising confrontation with the international community about disputed election returns. Opposition parties have denounced the election results of May 21 as fraudulent. Zimbabwe: President Mugabe has threatened to seize the assets of British and other foreign mining companies after completing the confiscation of white-owned farms.

IHT: Brazil: Editorial on rural strife in Brazil. After the death of a thousand peasants in the last 10 years, the recent sentencing of a wealthy and influential rancher for the murder of a rural union leader may prove to be a significant turning point.

Independent: Zimbabwe: Front page report on President Mugabe's warning that British assets will be seized and given to Africans after the elections scheduled for 24 & 25 June. In a rare interview the President has stated his determination to return ownership of all his country's resources to his people. The paper's editorial criticises Mr Mugabe for the land seizures, electoral thuggery and now possible nationalisation of the mines, saying that it will drive away much needed foreign skills, capital and sympathy. Ethiopia: The government has accepted a peace plan to end the two year border war with Eritrea.

Times: Zimbabwe: Report stating that 300 international election observers have failed to deter a campaign of terror by the ruling Zanu party. Editorial suggests that any attempt at free and fair elections has been abandoned and that not only intimidation but defeatism may kill democracy in Zimbabwe.

Tuesday 13th June 2000

FT: Nigeria/US: The US will back a big reduction in the size of Nigeria's foreign debt provided there is progress towards economic reform, US Treasury Secretary, Lawrence Summers said yesterday in Abuja, the Nigerian capital. The comments, suggesting US backing for a two-thirds reduction of Nigeria's debt to foreign governments starting from next year, also expressed US support “for a generous debt rescheduling” this year. Nigeria is due to pay debt service of $3.5 billion this year. Britain and the US are ready to accept Nigeria's wish to make payments of $1.5 billion, the sum provided for in the budget. But other governments have so far sought higher payments in part because of the windfall accruing to Nigeria thanks to higher oil prices. Diamonds/UK/Congo: Oryx, the diamond company with links to the Zimbabwean and Congolese governments, yesterday bowed to pressure from UK regulators and the Foreign Office and halted its planned listing in London.

The Guardian: Ethiopia/Eritrea: Ethiopia and Eritrea appeared close to a cease-fire in their two-year war yesterday after Ethiopia agreed in principle to a peace plan that would put a UN military force along their disputed border. But fighting continued yesterday with Ethiopia saying it had subdued Eritrean forces on all three fronts, killing or capturing thousands of troops.

The Times: Oil: Crude oil prices soared above $30 a barrel yesterday as concerns mounted that OPEC will decide not to raise output at its June 21^st meeting.

IHT: Congo (Kinshasa)/Rwanda/Uganda: Tens of thousands of civilians streamed back into Kisangani on Monday as a UN flag fluttered over a bridge dividing Rwandan and Ugandan troops who fought fiercely last week in the Congolese city. Paraguay/Brazil: The leader of a failed coup in Paraguay, Lino Oviedo, arrived in Brasilia yesterday and has begun preparations to finght extradition to Paraguay's capital Asuncion. Nigeria: President Olusegun Obasanjo apologised on Monday for not seeking wider opinion on sharp increases in petrol prices that have plunged his oil-producing country into a general strike. The government appeared desperate to end the strike that has spread to the lifeblood oil sector. Labour leaders insist that they will accept nothing short of a wholesale return to gasoline prices before the 50 per cent price increase decreed on June 1^st.

The Independent: Education/US: Coverage of the speech made by US Treasury Secretary Larry Summers to the United Nations Conference on Women and Development. He says that in a former capacity he undertook research that convinced him that girls' education represented the single highest return investment that any developing country could make. Nothing that has occurred since then has led him to change his opinion. That is why he is asking the international community to consider concrete, multiyear targets for substantial increases in World Bank lending for education—and to narrow the gap between girls and boys.

Monday 12th June 2000

The Guardian: Jubilee 2000/debt relief: Guardian leader argues that the international programme of debt relief has stalled badly with only five countries drawing any benefit to date. It is nearly a year since the G8 summit in Cologne was hailed as a great victory for the debt campaigners, and the accepted wisdom has been solved. Nothing could be further from the truth. Only five countries have had any debt relief at all (Uganda, Bolivia, Mozambique, Tanzania and Mauritania) and some of that has been pathetically inadequate—the worst case is Tanzania, which has had its debt payments cut by the princely sum of $12 million, to $150 million a year. As for the UK chancellor Gordon Brown's famous millennial gesture of 100 per cent cancellation of debts owed to Britain, only Mauritania has so far benefited. There is no shortage of finger-pointing; the US congress is being criticised for holding up the US pledge of $600 million for debt relief while Japan is being blamed for its refusal to prioritise the issue at the G8 summit in Okinawa next month. Mr Brown is frustrated; he has expended considerable effort pushing the issue up the international agenda. Now there is a real danger that the momentum of the international campaign will fade away—and that Jubilee 2000 will close up shop in six months—before its objective has been reached in even one country.

FT: Nigeria: A general strike over fuel price rises gathered momentum in Nigeria yesterday, with oil-industry workers joining public-sector and transport staff in the most serious disruption to business since the end of military rule a year ago. The port at Lagos has been blockaded and both international and domestic flights disrupted. Cities across Nigeria were affected by sporadic outbreaks of violence. Heavy fuel subsidies cost the government more than $1 billion annually, and eventual deregulation of the fuel sector is an important condition of the IMF backing for debt relief and loans. Nigerians however traditionally consider cheap fuel the only real benefit drawn by the public from the country's oil wealth. Mexico: Mexico's central bank governor is prepared to tighten monetary policy “at any moment” to counter currency turbulence ahead of presidential elections next month. Paraguay: Lino Oviedo, the former Paraguayan army chief and failed coup leader, was arrested by Brazilian police near the Paraguayan border yesterday. General Oviedo was sentenced to 10 years in prison for an attempted coup in 1996. Liberia: (Saturday's paper) Britain's attempts to halt the illegal flow of diamonds from rebel-held areas of Sierra Leone have been seriously undermined by the refusal of the US to include neighbouring Liberia in an embargo on diamond exports.

The Independent: OPEC: Hopes that OPEC, the oil producers' cartel, will agree to boost output, leading to lower prices, rose yesterday after an official said a deal would be reached at a meeting later this month.

IHT: Congo (Kinshasa)/Rwanda/Uganda: (Saturday's paper): Ugandan and Rwandan forces battled Friday in Kisangani in fighting that has killed about 100 civilians and shattered a UN-brokered cease-fire. Bodies lay in the streets of the jungle city as both armies pounded each other with everything from heavy artillery to small-arms fire. Congo (Kinshasa): A report by the a leading refugee agency, the International Rescue Committee, claims that two years of war have caused the deaths of more than 1.7 million people in eastern Congo, where people who manage to flee the fighting often die of hunger and malaria while hiding in impenetrable forests. This figure means that about four times as many people have died in the area since August 1998 as would be expected under normal conditions, according to the study conducted. Environment: New York Times article looks at some of the efforts by organisations such as Conservation International in protecting habitats around the world. It comments that one of the few tangible achievements of the 1992 Earth Summit in Rio de Janeiro was to strengthen the nascent Global Environment Facility, a multilateral body that has helped underwrite some of these private efforts to help poor countries hang on to their natural assets. In 1998, the US Congress pledged to give this group $430 million over four years. It is already $200 million in arrears, a rather shameful record given the commitment of private groups with smaller resources. Sierra Leone: Comment from Human Rights Watch that Sierra Leone cannot be stabilised without a full-throttle, international effort to prosecute tragic crimes. The organisation calls for an international tribunal.