| Daily Press Cuttings |  |
| Daily Press Cuttings | |
Friday 20th August 1999
Dow Jones (USA): Southern Africa: Leaders of the 14-member South African Development community (SADC) yesterday urged Western nations immediately to revive the Heavily Indebted Poor Countries (HIPC) debt relief initiative, so financial aid could be disbursed faster. Meeting in Maputo for their annual summit, SADC leaders identified three reforms that it said could bring meaningful financial relief to
debt-ridden countries. The SADC wants the eligibility for debt-relief be shortened to three years from six years for countries that implement reform programs prescribed by
the IMF and the World Bank. They also implored western countries to engage in "periodic reviews of the eligibility criteria and a consistent interpretation of track record." In addition, the organisation demanded that debt sustainability ratios be reviewed "to provide deeper and wider debt relief." As part of its drive to cut the burden of debt-service payments, SADC urged G7 nations "to write off the debts of poor countries as they have the capacity to do so." Meanwhile, the SADC applauded the IMF for its decision last week to consider alternatives to selling its gold reserves to finance HIPC debt relief.
FT: Kenya: Kenya has appointed Chris Okemo, the former minister for energy, as minister of finance following Francis Masakhalia's failure to come to grips with the country's severe economic difficulties. Rwanda/Uganda: Human Rights Watch, the US-based lobby group has condemned the “callous disregard for civilian life” shown by Rwandan and Ugandan forces fighting in Kisangani in northern Congo.
IHT: Japan: Industrial Bank of Japan Ltd, Dai-Ichi Kangyo Bank Ltd. and Fuji Bank Ltd. are considering a possible alliance that would create the world's largest bank. Peru: The price of Coca leaf has rebounded to over $15 per 25 pounds, as traffickers have found ways to reopen some air routes and use river, road and sea channels. As a result an increasing number of farmers are beginning to plant the crop again.
The Guardian: South Africa: Focus on South Africa's new central banker, Tito Mboweni, former radical student activist and ANC freedom fighter. Article says that the policies pursued by him and his predecessor may be identical in practice, but the anti-inflation rhetoric is likely to be softer and coming from one of us rather than from one of them, it might make the majority population of South Africa more inclined to give Mr Mboweni the benefit of the doubt about the country's experiment with IMF economics. Brazil: A Brazilian court yesterday acquitted three senior military policemen of the massacre of 19 peasants—despite the jury's belief that the men were responsible for one of the most violent episodes in the country's recent history.
The Independent: Trade: Journalist Deborah Orr argues that on trade issues we should be moving towards a compromise situation in which trade remains free but becomes increasingly informed. For while it may be right to argue that protectionism does not work, people must retain the right to protect themselves, whether it is from eating food which is pumped full of hormones they don't want, buying timber that has been cut from unsustainable rainforests, or wearing clothes that have been made by people earning as little as 26 pence an hour. The more that wealthy nations tread on the needs of poorer nations, and also on the needs of their own poorer citizens in the name of free trade, the more nations and people will opt out of the entire system.
FT: Nigeria: Nigeria plans to retire 30 000 soldiers and sailors from its 80 000 strong armed forces as part of ongoing restructuring, according to Theophilus Danjuma, the defence minister. General Danjuma said he intended to reform the army into a leaner, better-equipped and better-trained outfit, subordinate to civilian rule. If carried out, the reforms would amount to the most dramatic changes to the army since the Biafran war in the 1960s. Aid Agencies: Article looks at the growing influence of NGOs world-wide, a multi-billion dollar industry on the front line of Africa's many conflicts, and at the heart of the continent's battle for economic recovery. In 1995, the commission on global governance the UN report on development issues found 28,900 international NGOs. In a typical African country, 30-40 donors in addition to 75-125 foreign NGOs fund 1000 or so distinct projects, involving 800-1000 foreign experts”, says Nicholas van de Walle of the University of Michigan. The article concludes by saying that NGOs have made a remarkable contribution to the relief of suffering in the poorest countries. One question is whether western donors—both governments and private individuals—expect more of them than they can deliver. The other is whether they will ever be able to extricate themselves from the responsibilities they have taken on. Brazil: Thousands of Brazilian farmers demonstrated outside Congress for a reduction in their debts to the government. Global finance: Letter from the chief executive of Intermediate Technology, Chris Underhill, that says that contrary to a recent article in the FT, globalisation is far from being beneficial to the poor, and fails to even recognise their existence and contribution. A different model, which recognises and supports the productive capacity of poor people is urgently required.
The Washington Post: Debt/Development (August 18th) Journalist Judy Mann asks “When will we become worldly enough to stop calling them developing countries? Many of them aren't developing—they are dying—and the rich countries of the world are doing less to help them than they were five years ago. The Centre for International Development at Harvard University recently offered this snapshot of conditions in Zambia. Twenty per cent of the population is HIV-positive. An estimated 9 per cent of children younger than 15 have lost a mother or both parents to AIDS. Half of the population is without access to safe drinking water. Thirty percent of the children have not been vaccinated against anything. Infant mortality is 112 per 1000 births (compared with 5 per thousand in the US). Life expectancy dropped from 49.1 to 43.1 in 1997.Zambia spends $17 per person per year on health care; the richest nations spend an average of $2300 per person. Zambia spends 10 per cent of its budget on basic services and a crushing 30 per cent on international debt service.
In June, the world's seven wealthiest nations agreed to write off more than half the debt of the 30 poorest most indebted countries. It made the front pages for one day. Jeffrey Sachs, the director of the Harvard Centre, and perhaps the world's leading expert on debt relief, says the initiative is not enough. Governments have no chance of meeting their essential needs when they are spending a third of their budgets on international debt service. He proposes that prosperous countries forgive almost all the debt, take the IMF and the World Bank out of the driving seat and give the United Nations relief agencies the resources and clout to put these countries on the path to recovery.
IHT: Thailand/IMF: The deputy prime minister of Thailand said yesterday that the IMF was predicting that the Thai economy would grow more than 1 per cent this year, and would be recalling its official back to Washington.
The Guardian: Russia: The former prime minister Yevgeny Primakov announced yesterday that he will head a new coalition bringing together the might of Moscow and Russia's powerful regional leaders, signalling a serious challenge to Boris Yeltsin in the run up to parliamentary elections in December. Mr Primakhov will head the candidates' list for the alliance between the Fatherland movement of Yuri Luzhkov, the mayor of Moscow, and All Russia, a coalition of regional leaders. UK/public finance: Britain's public finances swung back into the black by £5.4 billion last month, putting the chancellor on course to record his second consecutive budget surplus, according to official figures published yesterday. City analysts have predicted a potential surplus of £10 billion at his disposal by the spring. Gold sales: (yesterday's paper) Letter from the Chief Executive of the World Gold Council, Haruko Fukuda, in response to Ann Pettifor's letter saying that the World Gold Council is engaged in price-fixing. He says this is untrue, and that the WGC has not sought to drag indebted nations into the debate on the IMF's plans to sell gold.
FT: Congo (Kinshasa): Laurent Kabila, president of the Democratic Republic of Congo, abandoned yesterday the Southern African Development Community summit in Maputo, Mozambique, underlying the difficulties in negotiating an end to the region's wars. Mexico: Mexico's economy grew 3.2 per cent in the second quarter, faster than expected, providing more evidence that it is in good shape ahead of the presidential elections next year. Venezuela: The leadership of Venezuela's constituent assembly, which was elected last month to rewrite the country's constitution, yesterday proposed radical judicial reform that aims to curb corruption but falls short of closing the supreme court. The proposal could lead to the suspension of as many as 2000 judges and court officials.
The Washington Times: Haiti: In Haiti life expectancy stands at 54 years, per capita annual income at $250, three-quarters of Haitians lack running water, unemployment is nearly 70 percent, half of Haiti's 7 million people are illiterate, and 80 percent of Haiti's 5 million peasants live in absolute poverty while most are landless. Economists say the recent electrical shortage is yet another blow to Haiti's
struggling economy, though under normal circumstances, only 2 percent of Haiti's 7 million residents have legal access to the electrical system. Many others divert power illegally from public lines the article reports.
The Guardian: Brazil: The trial of 150 military policemen accused of taking part in the massacre of 19 Brazilian peasants at Eldorado do Carajas during a dispute over land rights opened yesterday in the Amazonian city of Belem. The massacre in April 1996 marked a turning point in the struggle for land reform in Brazil, exposing to a world audience the country's social inequalities and the violence used to maintain them. Vietnam/US: US diplomats have returned to their mission's original home in Ho Chi Minh City—formerly Saigon—nearly a quarter of a century after their predecessors scrambled to safety from a besieged rooftop at the end of the Vietnam war.
Agence France Press: IMF/debt relief: The IMF executive board has backed changes to the joint World Bank-IMF Highly Indebted Poor Countries (HIPC) debt relief initiative to provide broader relief at a faster pace to some of the world's poorest nations. IMF Deputy Managing Director Stanley Fischer on Friday said Fund
executive directors, at a meeting on August 5, endorsed proposals contained in a
paper prepared by staff members at the Fund and the Bank. Executive directors agreed that debt sustainability targets should be lowered to a debt-to-export ratio of 150
percent, replacing the current target range of 200 to 250 percent. They also concurred that an assessment of debt relief eligibility should be made according to data at the beginning of the review process rather than at the end. "These overall changes would broaden the number of countries that could potentially qualify for HIPC initiative assistance," according to Mr Fischer. The IMF executive board also supported the introduction of "floating completion points" in the qualifying process, "as this would base the assessment of a country's performance on particular outcomes rather than the length of the track record," Mr Fischer said. "The use of floating completion points could also provide an incentive to implement reforms quickly and develop ownership over the timetable." Executive directors were sympathetic to the provision of interim
assistance to debt-ridden countries, since such funds could free up more resources for increased social spending.
The Independent: Russia: Vladimir Putin, the former head of Russia's security services, was confirmed yesterday as Boris Yeltsin's latest prime minister by a disgruntled parliament that decided to save battling with the Kremlin for another day. He is the fifth premier in 17 months.
FT: Congo (Kinshasa): Street battles between troops from former allies Rwanda and Uganda have left fifty dead in Kisangani in the Democratic Republic of Congo. Aid workers reported that the fighting eased yesterday after two days of fierce fighting. Nigeria: Nigeria's plans to deregulate power generation came closer to reality during a weekend visit to the country by Bill Richardson, US energy secretary. Us company Enron has signed a deal with Lagos, Nigeria's largest city, to build and operate a 560 MW power plant for an estimated $800 million.
The Guardian: Gold Sales/Jubilee 2000: Journalist Mark Atkinson says that Gordon Brown has been right to sell some of the government's stock of gold, and says that the bleating of hypocritical gold producers should be ignored. As Ann Pettifor, director of Jubilee 2000, argues in a forthcoming article in Public Services International, the industry led by the Chamber of Mines, effectively sustained the apartheid regime throughout its near 50-year grip on the black majority of South Africa. It ill behoves the gold producers to be complaining about job losses among poor blacks now, when they have been exploiting them for decades. “This is nothing more than a blatant attempt to use workers and the poor to shield shareholders from market forces,” says Ms Pettifor. There is no reason for the fall in the gold price to hold up the HIPC debt relief process. Professor Jeffrey Sachs of Harvard University has argued that the IMF could re-value the gold on its books to market value and recognise a gain of around $27.4 billion. According to the professor a complete write-off of all IMF claims on the poorest countries could become affordable.”
The Voice: Human Rights/Slavery: There are growing signs that Africa's persistent spiral of poverty is leading to a resurgence of the traffic in child slaves. Children are going for sale in West African countries as both domestic and commercial labour and are also prey for sexual exploitation. Until recently the trade has been seen largely as a phenomenon of war-ravaged countries such as Angola, Sudan, Somalia and Chad, where even ten-year-old girls are said to be servants and concubines at rebel military bases. However, Anti Slavery International says that children are now being traded in relatively peaceful areas, such as Benin, Burkina Faso, Cameroon, Cote d'Ivoire, Gabon, Nigeria and Togo.
FT: Nigeria: Letter from the chief press secretary to the minister of finance, rebutting the letter last week of Karl Ziegler. He argues that Mr Ziegler's letter which criticises the new government for refusing to allow a permanent IMF audit in the finance ministry is both unfair and distasteful. Given the democratic government's total commitment to eliminate corruption and the steps taken so far in this direction, including the submission of the anti-corruption bill to the national Assembly, the international community should be reassured that their present scepticism is misplaced. Gold: Central bankers in the G10 group of nations have criticised the UK's central bank for causing instability in the gold market.
IHT: (Saturday's paper) East Timor/Indonesia: Comment from Nobel peace laureate Jose Ramos-Horta, who hopes that the referendum on the future East Timor will settle a bitter international dispute that erupted in 1975, when Indonesia invaded the former Portuguese colony. However, the Indonesian military is threatening to de-stabilise the elections. There are more than 18000 Indonesian troops and 8000 police in the territory. To make matters worse, hundreds of members of the Indonesian Army's special forces unit have been sent to East Timor disguised as police. Mr Ramos-Horta calls for the army to back off and allow a free, fair and internationally acceptable act of self-determination to take place in East Timor.
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