| Daily Press Cuttings |  |
| Daily Press Cuttings | |
Friday 24th September 1999
The Daily Telegraph: Pope/Debt: The Pope yesterday received rock stars Bob Geldof and Bono and other musicians campaigning for the cancellation of Third World debt. The Pope said cancelling the debt was essential to fight poverty: “I appeal to all persons involved, and in particular to the most powerful nations, to prevent the Millennium jubilee passing by without decisive steps toward a definitive solution to the debt problem.”
The Sun: Pope/Debt: Bono met the Pope yesterday and said afterwards: “He's legged it with my sunglasses. The U2 singer was in Rome to ask John Paul II for his backing in a campaign to write off Third World debt. Article by Bono, saying “We want to see Live Aid through”. We have the opportunity to give a fresh start to one billion people. On New Year's Eve we want the world's banks to drop the debt that is owed to them by the poorest of the poor. Millennium night shouldn't only be about champagne and fireworks. We can make a difference. I would love to see Tony Blair and Gordon Brown standing in the Millennium Dome and announce to the world that the debts have been cleared—then we can all party. They would make history. The West has plundered the Third World over the last thousand years so now we can give something back. I took part in Live Aid and when we raised $200 million we were jumping for joy but then we discovered that is what Africa spends every week in servicing its debt. More money is spent on servicing their debts than is spent on health and education put together. I worked in Ethiopia after Live Aid for a month and it was a very humbling experience. The dignity of these people waiting in line for food, beautiful women with their heads shaved. In another life they could have been on a catwalk in Paris. They are just like you and me. Let's not make them beg.”
The Express: Pope/Debt: Under the headline “Goodness, Il Papa, You're the Spitting Image of Bono”, article says the Pope proved yesterday that the Spitting Image show was not so wide of the mark when it portrayed him as a smooth-talking hipster in trainers and shades. He gave a rare glimpse of his funky side when he donned a pair of rock star Bono's trademark wrap-round sunglasses. But while the U2 singer and the 79-year old Pontiff were amused, the Vatican was not and banned the release of any pictures of the Pope in shades. Bob Geldof, also part of the Jubilee 2000 Coalition delegation, was effusive in his praise for the Pope and the lead he has taken on the debt issue. Mr Geldof also revealed that the group had agreed to ask Bill Clinton and Tony Blair to accompany them to see some of the most poverty stricken villages in Africa. “We will take them out there and they can see the poverty themselves. We will defy them to walk away.”
The Independent: UK/Debt relief: British Chancellor of the Exchequer, Gordon Brown, writes in the Independent, and says that “this Sunday will see the IMF's interim committee and the World bank's development committee meet in joint session for the first time, and for one purpose only: to deliver the world's poorest countries from the burden of unsustainable debt. The current debt initiative has been delivering too little debt relief, too late, and to too few countries. Now with the enhanced framework agreed by the IMF and World Bank, we can make rapid progress out of the worst of debt. Our new and challenging target is to get three-quarters of eligible countries through the process and the remainder on the path to debt relief by the end of 2000.” Pope/Debt: The Pope added his voice to a campaign pressing Western political leaders to cancel Third World debt. Receiving a delegation of ageing rockers, economists and civil rights campaigners from the Jubilee 2000 pressure group yesterday, the pontiff impressed his visitors with an explicit endorsement of their efforts, describing debt relief as a precondition for progress in the fight against poverty. Leader says that it is not easy being Pope, having to defend difficult doctrines, deal with failing health and tricky cardinals. Added to these he has to meet celebrities, even though to be sure it was in a good cause--cancelling world debt.
The Times: Pope/Debt: Bono, the lead singer of U2, described Pope John Paul II as the “first funky pontiff” after lobbying him yesterday for support in cancelling Third World debt. Bono met the Pope at his summer residence outside Rome, 100 days before the new millennium. They were joined by Quincy Jones, the US music producer, Bob Geldof and economist Jeffrey Sachs. The group was led by Ann Pettifor, the co-founder of the Jubilee 2000 Coalition, which advocates a debt-free start to the millennium with a one-off cancellation of the unpayable debts of the world's poorest countries. UK/Debt relief: The Chancellor of the Exchequer, Gordon Brown, said that some of the poorest countries in the world will start to benefit from the relief of crippling international debts within weeks if this weekend's meetings of the IMF and World Bank agree a debt write-off package. He said that “the most important issue before us in Washington will be debt relief. This is a tribute to the feeling that the millennium can be a fresh start.” Gold/IMF: City comment says that the IMF is to re-value a seventh of its gold at market prices and use the surplus to relieve debts of hopeless cases. Even in a flexible world of audit only a complete dummy would attest the truth and fairness of accounts that value some gold at $260 and other identical gold at $49 an ounce.
IHT: IMF/Debt: On Thursday Mr Camdessus, Managing Director of the IMF, revealed that among the potential buyers of IMF gold was the central bank of Mexico. When asked whether the IMF, in promoting the debt-relief plan, was trying to undo past lending errors to some of the stricken countries, Mr Camdessus bristled and said “our loans were good loans that helped these countries out of the black hole of bank loans from irresponsible private-sector bankers.” Environment: John Tuxhill, research fellow at the Worldwatch Institute in Washington, says that the widespread losses of plant species and varieties are eroding the foundations of agricultural productivity and threatening other plant-based products used by billions of people world-wide.
FT: UK/Debt relief: Interview with Gordon Brown, the British Chancellor of the Exchequer. Gordon Brown is surrounded by what he sees as unique opportunities—to make debt relief for highly indebted poor countries a success, to implement agreed reforms of the international financial system and to secure higher growth in the UK economy. Debt relief will be a central issue at the meetings in Washington of the interim committee of finance ministers, which oversees the IMF and joint IMF/World Bank development committee. The chancellor argues that this is a unique opportunity, this millennium year, to make a difference. “But if we fail, then people will look back on this not just as a missed opportunity, but as a tragedy.” IMF/ Debt relief: Michel Camdessus, IMF Managing Director, said that the IMF would raise the equivalent of about $5.5 billion to pay for the IMF's share of debt relief. Officials said that intense technical discussions were expected to continue in coming days about the details of the debt initiative, about which many details remain to be resolved. Hedge Funds: Few people expected John W. Meriwether, founder of Long-Term Capital Management, to eat humble pie for long. But hardly anyone imagined the famous former Salomon bond trader would be soliciting for money to start a new fund—named after him—so soon after the crisis. World Economy: Full survey on the world economy which not only weathered the storm which last year was gathering force, it has done spectacularly well. The biggest uncertainty now lies in Wall Street.
The Guardian: Pope/Debt: Celebrity campaigners, led by U2 singer Bono, joined the Pope in Rome yesterday to support his challenge to world leaders to cancel developing countries debts before the millennium. According to the UN, cancelling developing countries' debts could save the lives of 7 million African children each year. According to Jubilee 2000 writing off debt in the world's poorest countries would only cost British taxpayers as estimated £2 a year each. Economist Alex Brummer criticises Michel Camdessus, Managing Director of the IMF, for claiming that the IMF had been a leader on debt relief. Indeed the IMF has been the laggard rather than the leader. By muddling up debt relief with its soft loan programme it made it more difficult to command the political support of shareholders.
El Pais: Pope/Debt: The pope met yesterday with stars from the world of rock music to give his backing to the campaign to cancel Third World Debt.
The Independent: Africa/Europe: The foreign ministers of the UK and France, Robin Cook and Hubert Vedrine, stressed the fact this week that Europe has an important role to play in tackling Africa's problems. After meeting the foreign ministers of Kenya, Nigeria, Cote d'Ivoire and Gabon, Mr Cook said that “the small arms used in these (Africa's) conflicts come from Europe and the diamonds which are used to pay for them are sold in Europe. Much of the debt of Africa is held by European banks. But banks in Europe also often hold the illicit wealth of African dictators.” The next step will be a special meeting next year to finalise detailed strategies on these issues, with Britain and France taking the lead. Commonwealth/Gold Sales: Commonwealth finance ministers are likely to support the IMF's proposals to make off-market sales to member governments. The plan will involve selling 14 million ounces of gold, with the proceeds going to fund the HIPC initiative.
FT: Cuba/UK: Britain and Cuba have signed a rescheduling agreement for £17 million of short-term debt owed by Havana, in a deal that opens the way for the British Government to resume medium-term export cover for the communist-ruled Caribbean island. As part of the deal, the British Export Credits Guarantee Department cancelled interest arrears on short-term debt. Cuba's debt to the ECGD is £120 million. Africa/ Investment: The International Finance Corporation, the private lending arm of the World Bank, yesterday launched the largest ever equity fund for investment in privately owned infrastructure in Africa. The African Infrastructure Fund, created in association with AIG, the US-based insurance company, was launched with funds of $400 million , which it hopes to invest in projects across Africa totalling around $2.5 billion. Russia: Economist Rudiger Dornbusch asks if the IMF is throwing good money after bad in Russia? Perhaps, he concludes, but the west has no option but to help, despite the allegations of money-laundering.
The Guardian: World Economy: The IMF said that the world economy was still at risk of a relapse, despite improvements in most regions since 12 months ago. Latin America's prospects are mixed. Brazil's recession has been less deep than feared, with the economy contracting by 1 per cent this year against the 4 per cent predicted in the spring, and inflationary pressures less pronounced. However, Argentina, Colombia, Ecuador and Venezuela have been experiencing severe economic difficulties in recent months. Africa's growth has been revised down to 3 per cent in 1999 and 5 per cent in 2000. But there were big disparities between countries.
FT: USA/Debt Relief: The US administration yesterday said that it intended to seek funding of close to $1 billion for a plan aimed at sharply reducing the debts of the world's poorest countries. The announcement—together with a new proposal by the IMF to re-value some 14 million ounces of gold to finance debt relief—gives a significant boost to a debt reduction initiative agreed by leaders of the Group of Seven industrialised economies in Cologne this summer. US Treasury Secretary Lawrence Summers confirmed that the Clinton administration intended to seek the extra funding from Congress. This would include a budget amendment of $250 million this year and a further $600 million for future years to finance debt relief. This in addition to an earlier request of $120 million for the initiative. The money is meant to finance the reduction of $330 million of US bilateral debt, and a $600 million contribution to the HIPC trust fund. A further $50 million would finance debt-for-nature swaps. Indonesia: Personal view from William Keeling, a former western banker in Indonesia: “The fallout from embracing regimes that deny the rule of law is best understood by those who suffer physically and financially. The worst affected at present are the East Timorese. Next in line are the 100 million Indonesians pushed below the poverty line as a result of the Suharto government's corruption and economic mismanagement. An often disregarded third stratum are the ordinary citizens of western countries who underwrite in their taxes the misplaced policies of their governments and commercial banks. The suffering is of differing degrees, but the anger of the citizens of each country has a common root.” World Bank/ Development: James Wolfensohn, president of the World Bank, and Joseph Stiglitz, Chief Economist, write that “the old approach of an exclusive focus on growth as the elixir for all the world's problems is too circumscribed. Such a trickle-down approach ignores the substantial social gains from growth directed towards the poor. In other words, the quality of economic development—not just its existence—can be important.” Russia: James Wolfensohn yesterday rebuked Joseph Stiglitz, his chief economist, saying Mr Stiglitz's views on the failure of market reform in Russia had been made with the benefit of perfect hindsight.
The Guardian: Population: October 12th has been designated as the day when the world's population hits 6 billion. It has doubled since 1960, and could rise to 10 billion in the next 50 years. IMF/Debt: Economist Alex Brummer comments on how the IMF has sought to resist the pressure for debt relief. The main way in which it did this was by insisting that its enhanced structural adjustment facility was debt relief. The result was that this facility's funding difficulties, for the period 2001-2004, became those of the poor debtors. Much of the dogma of three year preparation periods, followed by a further three years under probation—which fortunately was abandoned by G7/G8 heads of government in Cologne this year—came from the minds of IMF officials. The same people who gladly handed the silver over to the Russian central bank, much less willingly did so to countries in desperate need.
IHT: Philippines: Transport strikes crippled four cities in the Philippines on Tuesday and more than 100 000 protesters marched to oppose President Joseph Estrada's plan to rewrite the nation's constitution. Russia: The US Treasury Secretary and the president of the World Bank both warned on Tuesday that Russia could not expect any fresh international funds until Moscow clarified a series of corruption allegations.
FT: UK/Debt Relief: The British government said yesterday that it was increasingly optimistic the European Union would help finance debt relief for poor countries. The UK has suggested taking _1 billion from the European Development Fund to give more relief to HIPCs. The resources would come from money pledged to the EDF but not yet spent. The UK has already pledged $171 million to the HIPC fund, and would add another $120 million via the EU if the request is accepted. World Trade: UNCTAD's annual development report says that protectionism in rich countries has hindered the exports of poor ones and forced them to rely excessively on footloose short-term capital to finance growing trade deficits. Rubens Ricupero, the UNCTAD Secretary General, said that over-dependence on hot money was the cause of the Asian crisis, yet nothing had been done to avoid the same thing happening again. He described the experience as a “crisis of development and a crisis of globalisation.” Letter from Salil Shetty, chief executive of Action Aid, and other NGOs, calling for a re-think on trade: “A new diagnosis of the world economy is needed. It is therefore time to assess the real impact of trade liberalisation on poverty, marginalised communities, development, democracy, food security, environment, health human rights, labour rights and the rights of women and children. It is not the time to rush headlong into yet another round of trade liberalisation.”
The Guardian: Environment/ Debt (20th September): As finance ministers scramble to pull together a deal which will leave many of the poorest countries' plights unaffected, they would do well to reflect on who owes what. How long will it be before countries challenge the US on its massive environmental debt to the world? Bangladesh suffered catastrophic floods last year; isn't it entitled to lecture the US on paying this debt? How much compensation will it get when it loses 25000 square km, a fifth of its land, due to global warming. In a report published today by Christian Aid, they have calculated sustainable carbon use per person and claim that the US is using 12 times its allowable amount, the UK