| Daily Press Cuttings |  |
| Daily Press Cuttings | |
Thursday 30th September 1999
The Times: USA/debt: President Clinton yesterday announced that the United States would take steps to forgive the entire debt owed to it by the world's poorest nations, on condition that the money is spent on basic human needs. “I am directing my administration to make it possible to forgive 100 per cent of the debt these countries owe to the US when needed to help them finance basic needs and when the money will be used to do so.” Russia: Russia has asked the USA for five million tonnes of food aid, two million more than it received for last year. The move was widely expected after last year's harvest, the worst in 40 years, and this year the harvest is expected to fall short.
The Guardian: Debt/Jubilee 2000: President Bill Clinton last night raised the stakes in the battle to bring debt relief to the world's poorest countries when he offered for the first time to write off 100 per cent of their loans from the US. In an address to a joint session of the IMF-World Bank, Mr Clinton said the US, which was enjoying an unprecedented boom, had a moral imperative to do more to help forgive billions of debt for the poorest countries by the new millennium. In an emotional address, Mr Clinton urged a change in direction for the millennium which would give poor countries a chance. He said he was responding to the message of the Pope and other religious leaders who have supported the campaign to forgive debt. In response to Mr Clinton's speech the director of Jubilee 2000 Coalition, Ann Pettifor, said: “This announcement changes everything. In order to rise to President Clinton's challenge to do better, the world's leaders must meet again before the millennium. They must accept President Clinton's view that deeper debt cancellation is a moral and economic imperative.”
FT: USA/Debt: President Clinton said yesterday that Washington would forgive all bilateral debt from those poor countries eligible for the HIPC initiative. the US has $3.5 billion of commercial debt at face value with those countries. He said that more than 430 million people could benefit from this effort. Ecuador: Ecuador's decision this week not to pay interest on some of its bonds appears to have set the country on a long and rocky road with private creditors. But finance officials attending the annual meetings of the World Bank and IMF this week are hoping that the fallout from the default will be contained. The IMF is unlikely to mount a large scale rescue, mainly because the country is not viewed as critical to the global economy.
The Independent: USA/Debt: The USA underlined its commitment to debt relief yesterday by pledging to forgive 100 per cent of the debts of some poor nations. Following some early scepticism about debt relief, America seems to have been converted tot he cause. It was the first such commitment from any country. The money for the pledge would come from cash already announced, US officials said.
Debt/Environment: Christian Aid's Andrew Simms explains to IMF and World Bank officials the huge carbon debt that industrialised countries owe the developing countries. “Our climate is owned by no one and yet needed by everyone, rich and poor. As we struggle to act to save it, we come across a devastating idea. Forget the moral arguments; our survival in fact depends on equity. Would the real debtors please stand up?”
IHT: USA/Debt (front page): President Bill Clinton declared his determination to help eliminate all the debt some of the poorest countries owe the US, adding a momentum to a move that has gained force during the annual meeting here of finance ministers and central bank governors. The US Treasury Secretary Lawrence Summers said the US would cancel “entire nations' debt on a case-by-case basis.” Mr Summers stressed that the debt relief would be linked to the successful completion of anti-poverty programmes in each of the debt-stricken countries. “We will be seeking others to join us,” Mr Summers said.
Metro: Debt/USA: Bill Clinton yesterday dramatically pledged to help wipe out Third World debt.
The Times: Uganda: Uganda will become the first country to benefit from the new debt initiative launched in Washington it emerged yesterday and will use money originally earmarked for debt repayments to improve its education facilities. Under the enhanced HIPC Initiative, Uganda will see its annual debt repayments fall from $120 million to $40 million. The country is to plough the extra money into education, and intends to halve the primary education teacher/student ratio from one teacher to 100 students during the next 12 months. IMF/World Bank: Comment from Lea Patterson in the Times on the complacency at the IMF/World Bank Annual Meetings. Western banks have seemingly learnt nothing from the crisis last year and are again freely lending to all and sundry. The lessons from the turmoil of the last few years have not been fully learnt. And that bodes ill for developing countries, their creditors and self-satisfied policymakers in the West. Russia: The IMF shelved a $640 million loan to Moscow after the Russian Central Bank stopped co-operating with American investigators in the Bank of New York money-laundering affair.
The Guardian: Debt/Jubilee 2000: Leader says that this week's announcement of a $23 billion debt relief package crowns a brilliant campaign fought by Jubilee 2000 over the past two years. These activists, whose cause the Guardian adopted as its millennium campaign 18 months ago, refused to accept that compassion fatigue and cynicism with corrupt third world governments made their dreams impossible. The deal though not all that was wanted, represents a major new commitment on the part of the industrialised countries to tackle deepening global economic inequality. Uganda: Schoolchildren in Uganda will be the first beneficiaries of the improved debt relief package, the chancellor Gordon Brown announced last night. The enhanced package of assistance for Uganda will be worth up to $80 million a year for six years, according to British officials. Among the reasons that Uganda has been favoured is its strong commitment to rooting out corruption and cleaning up government. James Wolfensohn, newly re-appointed president of the World Bank, placed cleaner government at the centre of his keynote address to delegates and bankers for more than 180 countries gathered in Washington.
FT: HIPC/ World Bank: James Wolfensohn, the Bank's President, said yesterday that the world needed “a new development architecture” to match the new global financial system. He said that better co-ordination of development required a coalition between the UN, governments, multilateral organisations such as the World Bank and the private sector. “It is shameful that Tanzania must produce 2400 reports each quarter for its donors,” he said. World Bank/Arms: Mr Wolfensohn gave his support to proposals to abolish the use of export credit for sales of military equipment. IMF/debt: Proposals to ease the difficulties of resolving sovereign debt crises, including changing bond contracts and altering IMF statutes to hold off lawsuits from creditors are likely to founder. This is despite a plea yesterday from Michel Camdessus, IMF Managing Director, that IMF member governments should consider changing the Fund's articles to provide for a stay of litigation. This would make it more difficult for individual creditors to derail debt negotiations, and give creditors and debtor groups more time to manage debt restructurings. Japan: The Japanese government has confirmed that the Long Term Credit Bank has been sold to Ripplewood, the US private equity group.
The Times: USA: The USA will produce the biggest budget surplus in history this year, a beaming President Clinton declared yesterday as he unveiled figures showing that a roaring economy should produce an overflow of at least $115 billion.
The Guardian: HIPC: As many as 19 of the world's poorest countries will be placed on the fast track to debt relief today after leading finance ministers put the finishing touches last night to a $23 billion assistance package. James Wolfensohn, the World Bank president, said: “The deal is done.” Last minute wrangling at one stage threatened to put in jeopardy the agreement beefing up debt relief. This will go a substantial way towards meeting the objectives of the Jubilee 2000 campaign, backed by the Guardian, which has been seeking a deal to wipe out permanently the unpayable debts built up since the 1970s. Angela Travis, a spokeswoman for Jubilee 2000, said last night that more needed to be done, but was pleased to hear Mr Wolfensohn say that the door was never closed on further tranches of debt relief. Andrew Simms of Christian Aid said last night that the finance ministers had lost sight of the fact that the package agreed was still only enough to go one-third of the way to meeting the UN target of halving global poverty by 2015. Debt/Jubilee 2000: Larry Elliott gives the background to the decisions at the Annual Meetings on debt relief. It was an unusual moment in the history of the international community. For so long focused on their own interests, the rich countries of the developed north pledged to take decisive action to unshackle the poor countries of the south from their crippling debts. Gordon Brown has reason to feel pleased. Britain has fought tirelessly—and often alone—to push debt relief up the international agenda. The campaign to beef up HIPC has gone through three stages. First, the IMF had to be convinced that HIPC was not working properly, an argument to which the custodian of the global financial system proved resistant. Second, the Jubilee 2000 campaign mobilised and orchestrated public opinion, and put pressure on some of the more reluctant western governments to shift their position. Finally, it was a question of finding the necessary funding. Gordon Brown is convinced that there has been a breakthrough. “We have and will se implemented a credible initiative so that debt relief can be produced for the countries who need it, not in years but to begin now,” he said.
FT: HIPC/ World Bank: The World Bank said yesterday it had clinched a deal to relieve the debt of the world's poorest countries. But James Wolfensohn, the Bank's President, said it was still $300 million to $400 million short of the funding for the initiative. Washington officials said that apart from the small gap, further money might be necessary in coming months to keep the initiative going. Some countries such as France and Japan, which are expected to write off large amounts of bilateral debt to poor countries as part of the HIPC initiative, are known to be reluctant to pay again to keep the multilateral agreement solvent. The NGO Eurodad criticised the initiative, saying that the structural adjustment concept was fundamentally flawed and that debt cancellation should only be conditional on how the money should be spent. UNCTAD/World Trade: World-wide foreign direct investment could top $800 billion this year, a rise of a quarter on 1998, but FDI flows to developing countries could fall for the second consecutive year in 1999. Nigeria: Nigeria's central bank will relax its grip on foreign exchange markets by the end of October, paving the way for a market value for the naira. Gold sales: FT leader comments on the decision of the central banks to curtail sales of their gold reserves over the next five years. “Europe's central bankers have succeeded in temporarily increasing the gold price, but they were wrong to tie themselves to holding on to gold regardless of the cost.”
Washington Post (27th September): HIPC: A plan to cancel up to $27 billion in debt owed by the world's most desperately poor countries won key financial backing from major industrial governments yesterday, clearing the way for funds that now flow to foreign creditors to stay home instead to pay for schools and clinics.
The Times: Debt relief: A new debt deal aimed at writing off $100 billion of Third World debt will be introduced within weeks after last-ditch meetings between the UK and its G7 partners produced additional funds of $300 million for the initiative. Clare Short, International Development Secretary, announce that the UK would pledge an extra $50 million to the debt plan, making Britain the largest single contributor to the HIPC debt fund. Indonesia/UK: The three exported Hawk jets at the centre of a political row in Britain last week have arrived in Indonesia, it was confirmed yesterday.
FT: HIPC debt relief: A joint statement from the IMF's interim committee and the World Bank's development committee said they were confident that the enhanced HIPC agreement could start shortly. Governments have now pledged close to $2.5 billion for an important part of the initiative, a sharp rise from the $550 million that had been pledged as recently as last week. Contributions have arrived from the US of $600 million and the European Development Fund of about $700 million. Only Japan and Canada in the Group of Seven had failed to pledge funds. Officials said in Washington there were still questions remaining about the financing of the initiative, which is estimated to cost $27.5 billion in net present value. After a series of late-night meetings around $300 million extra from a variety of countries was promised in bilateral contributions to the HIPC trust fund, including a $50 million increase from the UK. World Bank: The USA has nominated James Wolfensohn to serve a second term as head of the World Bank, in a move that could pave the way for a formal announcement of his reappointment this week. World Economy: A new forum, the G20, which will encourage international co-operation on financial and economic problems was launched by the G7 this weekend. Russia: First deputy managing director of the IMF, Stanley Fischer, defends the IMF's record in Russia.
The Guardian: Tanzania: The Tanzanian government asked the country yesterday to pray for Julius Nyerere, the former president widely hailed as father of the nation, who is being treated for leukaemia in a London hospital. IMF/Structural adjustment: Larry Elliott comments on the IMF claim that structural adjustment programmes are to be given an anti-poverty focus, with even the name being changed from ESAF (enhanced structural adjustment facility) to the “poverty reduction and growth facility.” But as we found with Sellafield, changing the name is one thing, changing the way things are done is quite another. It is encouraging however that inside the IMF people are having second thoughts about the wisdom of the prevailing orthodoxy. If that means that the IMF returns to doing the macroeconomic conditions for growth and the advancement of human welfare—it will be good news for all of us, even if long overdue.
The Voice: Aids: About 11 million Africans have died from Aids over the past 15 years and another 33 million are infected with HIV, the virus that causes the disease. These shock figures were revealed at the 11th World Aids Conference in Zambia, one of the countries badly affected by the scourge. Studies in Zambia have shown that prostitutes can earn as much as £25 a day—a Zambian police officer takes home about £20 a month. Central African Republic: Police, soldiers and UN peacekeepers were out in force at polling stations as voting began for a new president in the troubled Central African Republic last week. Thousands lined up quietly in the streets of the capital Bangui to cast their ballots watched over by squadrons of police and soldiers.
The Independent: Ecuador: Ecuador was expected to make a statement last night about whether it would default on its Brady bond debt, an important signal of how far developing countries will shift the burden of adjustment back on to bankers.
Metro: UK/Debt Relief: Gordon Brown and Clare Short have pledged a further £31.3 million towards getting rid of Third World debt.
The Independent on Sunday: Debt relief: Full page article on debt asking why a world this wealthy cannot pay off debts so small. The Cologne initiative will give a little to a few countries and nothing to many others, said Jubilee 2000. Main leader says “End the debt, for pity's sake. The financial cost to the rich world of resolving the debt crisis in poor countries is small. The human costs of failure to act are unthinkable. When finance ministers look at each other across the table in Washington today, they need to look beyond narrow budgetary concerns at the human face of the debt problem And they need to say: Enough.”
The Sunday Times: Profile on Bono. Bono's objective last week was to secure publicity for the Jubilee 2000 Coalition, a pressure group trying to persuade western governments to cancel Third World debt at the start of the millennium.
The Observer: Bono/ Jubilee 2000: Bono led the Jubilee 2000 delegation, which met with Pope John Paul II at his Summer palace in the Alban hills, as part of their shared mission to persuade would leaders to completely cancel, or significantly reduce the crippling debts of developing countries before the start of the new year. At present, a poor country might pay significantly more in debt interest than it receives in overseas