Daily Press Cuttings

Thursday 20th April 2000

FT: Uganda: FT leader says that impoverished leaders of countries seeking debt relief would be well advised not to charter Concorde, build a presidential palace or shop too often at Harrods. And they should think twice about buying executive jets. President Museveni of Uganda needs a convincing defence of the purchase of his presidential jet if it is not to damage Uganda's case for debt relief and undermine the HIPC programme in general. Only when he has done so should this year's tranche of debt relief go ahead. Italy: The Italian prime minister Massimo D'Alema formally announced his resignation to the Italian parliament and President Ciampi. The ruling centre-left coalition last night looked likely to propose that Giuliano Amato, the country's Treasury minister, should replace him. Zimbabwe: The Movement for Democratic Change(MDC), Zimbabwe's main opposition party, accused the Zanu government of perpetrating so much violence against its opponents that anarchy was imminent and next month's general election could not be free and fair. Its secretary, Mr. Ncube, said Zanu's Central Intelligence Organisation, aside from orchestrating the seizure of white farms, had also searched the houses of MDC supporters in Chivhu, south of Harare, and beaten up MDC supporters. Cote d'Ivoire: Cote d'Ivoire has technically defaulted on its Brady bond payments as the $33 million payments due by March 31^st has not been paid. Indeed, even the $11 million officials said would be paid by April 15^th had not all arrived to the paying agent despite the Cote d'Ivoire having been granted a two week extended cut-off period. As a result David Beers, managing director of sovereign ratings at Standard & Poor said `'the Cote d'Ivoire will be counted as in default''. In addition, the military coup in December 1999 has also delayed a fresh agreement with the IMF, which had already suspended balance of payments support a year earlier. Multilateral support is not expected to resume until after the scheduled October elections, while bankers say the Cote d'Ivoire would qualify for HIPC relief at the earliest next year.

Wall Street Journal: IMF/World Bank: Comment from Claudia Rossett that the IMF and World Bank rather than enter dialogue with the protesters in Washington should relocate to somewhere the delegates would come face to face with people directly touched by the Fund's activities. A prime location for the dialogue would be Jakarta. There, Indonesians are still fighting their way back from the IMF-blessed devaluation of the rupiah and the abrupt bank shutdowns that in 1997 wiped out more than half the country's net worth and led to riots. Indonesians might have some useful commentary on the cost of IMF mistakes.

IHT: Ethiopia: The scenes from south-eastern Ethiopia are reminiscent of 15 years ago when 1 million people died from lack of water and food. As in 1984-5, there is plenty of blame to go around with much of this at the hands of the border skirmish between Ethiopia and Eritrea which broke out in the spring of 1998. However, almost nothing has been done since the last famine to break the vicious grip of the drought cycle that hits the Horn of Africa once every 10-15 years despite the fact that the components of a solution are well known: irrigation, land conservation, changes in crop patterns, diversification of economic activity and the relocation of people. As such the International community can provide a comprehensive effort to avoid a repeat of such famines, with national will to follow through the key to success for such a program.

 

Wednesday 19th April 2000

The Times: IMF: Lea Paterson argues that the protesters at the Spring Meetings of the IMF and World Bank are by no means the most serious threat to the IMF's future. Rather it is from the politicians in Congress and elsewhere. Mainstream criticisms of the IMF fall into four main categories: its technical skills, its stance on debt relief, its structure and the scope of its lending activities. On debt relief, a subject that campaigners in Washington and elsewhere have successfully brought to public attention, there has been some encouraging talk, but little action. In particular, the IMF and World Bank have yet to follow the lead of the G7 nations and cancel 100 per cent of debt owed by the world's poorest countries. Quite why they have not taken this step is unclear. Officials say it is partly an issue of funding—with the US Congress already unwilling to hand over taxpayers' cash to the institutions. But the reality is there is nothing to stop either the IMF or the Bank pledging the cash publicly in an attempt to gee up the politicians. The failure to keep up with the momentum of the debt movement seems to many as another example of two institutions out of step with the pace of change.

The Guardian: Italy: The Italian prime minister, Massimo D'Alema, is expected to resign today to give his centre-left government a chance to rally around a new leader and avert an election which would almost certainly be won by Silvio Berlusconi's alliance of opposition parties.

FT: Uganda: The IMF yesterday once again deferred debt relief due to Uganda under a high profile international initiative. The executive board of the IMF met for three hours yesterday with the completion of full debt relief for Uganda the only subject on the board's agenda. But the board decided to defer the decision again to continue talks with the Ugandan authorities. Several executive directors including the German representative objected to Uganda's apparent spending priorities. The government recently decided to buy a jet for the president Yoweri Museveni at a cost of $36 million. Spring Meetings: Ed Crooks says that at the Spring Meetings the much-criticised international institutions achieved little that will help the world's poor. The most obvious public relations coup that the IMF and World Bank could have secured was fluffed badly just as the meetings were beginning with the deferral of completion point in HIPC for Uganda. On trade too, attempts to show that poor countries would benefit from more open world markets ran into difficulties with the US and Japan expressing reservations. Zimbabwe: FT leader describes Mr Mugabe as a discredited politician at bay and argues that African intermediaries in Zimbabwe should seek to secure a commitment to elections with guaranteed access for Commonwealth election monitors.

IHT: Spring Meetings: The World Bank and IMF meetings devoted considerable time to Third World debt relief, emphasising that every Group of Seven country has agreed in principle to cancel the obligations of the poorest nations. Protesters are credited with influencing agenda. The World Bank and IMF now go to great lengths to stress their devotion to attacking global poverty. However lack of access to markets was a theme for poorer countries' representatives. For example Congress has delayed for months a bill to give textiles from Africa and the Caribbean better access to US markets. Mexico: Mexican open trade policies are creating victims amongst dairy and grain farmers. Dairy farmers protested in Mexico City about high US dried milk imports threatening domestic production.

Tuesday 18th April 2000

The Guardian: Tanzania/HIPC: Charlotte Denny focuses on the minimal impact the HIPC initiative will have on Tanzania. Twenty years after the country first asked its first world creditors for help with its mounting foreign debt, Tanzania has had the annual interest bill on its loans mountain cut—by around $12 million a year, or just 7 per cent. This will leave the country still spending $3 million a week servicing debt, twice what it spends on healthcare. “If you do the calculations, the amount of money released for poverty reduction is actually not very much,” says Christopher Mwakesaege, from the Tanzanian social and Economic Trust. Concerns are mounting that HIPC Mark 2 is starting to look awfully like a re-run with all the flaws of the programme it replaced. Zimbabwe: Eight members of Zimbabwe's new opposition party, the Movement for Democratic Change, have been killed in the last two weeks and more than 100 others have been hospitalised during a vicious campaign of political violence. Cambodia: The 25^th anniversary of the brutal occupation of Phnom Penh by the Khmer Rouge, whose bloody rule cost the lives of at least 1.7 million people, passed almost unnoticed in Cambodia yesterday, where officials insisted it was better to focus on “reconciliation.”

IHT: Rwanda: Paul Kagame became Rwanda's first president on Monday, emerging as formal head of a government that he has controlled as vice president and defence minister for six years. Ethiopia: Ethiopia's leaders argue that lives might have been saved if the outside world had been quicker to help. But no one is calling it a famine yet. And what has already happened here will be as bad as it gets, everyone hopes. The world's rich nations have pledged what should be enough food to stave off a far greater disaster. But much could still go wrong: the next rains may be inadequate; relief food may not arrive on time; the war between Ethiopia and Eritrea may ignite again. (Yesterday's paper) Cuba/G77: Members of the G77 group said they shared concerns and goals of demonstrators of demonstrators in Washington.

FT: Indonesia: Standard and Poor's yesterday downgraded Indonesia's foreign currency ratings to “selective default” following a $5.8 billion restructuring agreed in Paris last Thursday. World Bank/AIDS: The World Bank has promised that there will be “no limit” to the funds available to fight AIDS in the developing world, and held out the prospect that pharmaceutical companies would soon offer low-cost AIDS treatments tot e poor countries worst effected by the epidemic.

The Times: IMF: The International Monetary and Financial Committee, chaired by Gordon Brown, urged industrial nations to step up debt relief amid growing concerns that the initiative launched by G7 last year is running out of momentum. Ghana: 16-page focus on Ghana.

El Pais: Spain's Minister of Finance, Cristobal Montoro, in Washington said Spain was going to contribute an additional $70m to the HIPC fund making a total Spanish contribution of $128m. The HIPC fund now has $2,500m available. Mr Montoro also recalled Spain's past cancellation of $600m bilateral debt.

THE INDEPENDENT: Spring meetings: Hundreds more demonstrators were arrested yesterday bringing the total to well over 1,000 but a clash was avoided after a compromise where authorities agreed to let demonstrators cross a police line on condition that they were then arrested. Finance ministers were able to attend the World Bank's meeting. Both Finance ministers and protesters viewed the day as a victory, shining "the light on these institutions as never before in this country". Ethiopia: Leader "How the West has failed Ethiopia" shows that out of the 836,800 tons Ethiopia needs, the EU has pledged a mere 55,240 tons – when the relief effort is still short of some 336,683 tons needed for 16 million people on the brink of famine. Furthermore in 1999 the EU sent little more than half what it promised last year, which is why the food security reserve set up by the Ethiopian government is at an all-time low.

Wall Street Journal: Africa: In countries such as South Africa and Kenya, poor Africans driven from their communal homes by whites years ago are now threatening to copy the Zimbabwean example unless real steps are taken to redress their historical grievances. Editorial: Criticises World Bank lending practices with Zimbabwe and the up coming loan of $5 million agreed in November 1999.

Monday 17th April 2000

The Independent: Debt relief/HIPC: The British Chancellor Gordon Brown yesterday urged the West to speed up plans to cancel debt owed by Third World countries, as the meetings of the IMF and World Bank looked set to end without any firm progress. He said: "We called for action to be taken to ensure that we can help countries through the HIPC process. We said that it was vital to secure the needed financing for the initiative. We urged other creditors of HIPC countries to follow our move to grant 100 per cent relief." A spokeswoman for Jubilee 2000 said that she was disappointed at the lack of progress. "They have got bogged down in the nitty gritty...and have lost sight of the fundamental flaws in the HIPC process." The failure to cancel the $216 billion of debt owed by developing countries is a central complaint of the thousands of protesters who yesterday paraded through Washington carrying "Drop the debt" banners.

IHT: Poverty: Article by UK Development Secretary Clare Short looks at the prospects for meeting the 2015 development targets and argues that developed countries must stand by their pledges, not least on debt relief. Cuba/G77: In Cuba this week, leaders of poor and developing countries that include 80 per cent of the world's population gathered for the G77 summit meeting. A draft statement from the meeting urges the adoption of joint strategies among rich and poor nations to relieve poverty and foreign debt, increase the distribution of technology and reverse declining aid levels.


The Guardian: Congo (Kinshasa): Congo's president, Laurent Kabila, declared a period of national mourning as the death toll from a series of blasts at Kinshasa airport rose to 101. IMF/World Bank: Larry Elliott argues that the IMF is in need of a new faith. There is agreement that the priority is to tackle poverty and global inequality. But governments find it harder to pursue growth strategies and redistribution if they are in the thrall of capricious capital markets. So the solution should be to maximise domestic opportunity and provide the environment for countries to develop their own domestic financial institutions and create a flourishing market economy.

FT: Uganda (Saturday's paper): The IMF and the World Bank have deferred a decision to grant debt relief for Uganda under HIPC because of the proposed purchase of a jet aircraft for the country's president. Oxfam criticised Uganda's decision but said there was no suggestion that the money freed up under HIPC would be misspent. The delay may increase scrutiny of the countries yet to come through the process. Bangladesh: Donors agreed in Paris last week to provide between $1.8 billion and $2.2 billion in additional aid to Bangladesh over the next 20 years, depending on the pace of market-oriented economic reforms. A World Bank report in April said that official corruption had sliced 1-2 per cent from economic growth. EU: The EU development commissioner is calling on G7 leaders to abide by their promises not only to cancel debt but to contribute to fund the multilateral debt relief. Equatorial Guinea: Oil production in equatorial Guinea, the tiny, hitherto impoverished former Spanish colony in central Africa, will double this year t around 200 000 barrels a day, a government minister says.

Wall Street Journal: Washington: Debt relief is one of the issues being pressed by the protesters, who want the IMF to forgive the debts of developing countries. Activists also want the World Bank to end its policies promoting so-called structural adjustments, which encourage poor nations to privatise state industries and reduce government subsidies. G7: Ministers generally endorsed US Treasury Secretary's ideas about how to remodel the IMF to prevent and shorten financial crises in developing countries, and how to focus the World Bank on combating poverty and disease.

The Voice: Jubilee 2000/Africa: Article by Kofi Mawuli Klu, secretary of the Jubilee 2000 Africa campaign, calling for genuine African solutions to Africa's problems. Kenya/gender: Activists in Kenya are promoting a continent-wide campaign to reform the way women are treated. They say discrimination against women is entrenched in African culture and written into the law books.

The Times: Turkey/UK: Full coverage of the potential impact of the British-backed Ilisu dam.