Jubilee 2000 denounces the increased IMF conditions forced on Guyana

Despite passing all the major obstacles to qualify for debt relief under the original Highly Indebted Poor Country (HIPC) initiative, Guyana is now being told it is off track and will have to wait many months before it will receive the increased relief agreed by G-8 leaders in June and IMF and World Bank boards in September.

The first countries in line for extra debt relief are Uganda, Bolivia and Mozambique, which are three of the four countries that have passed completion point in the HIPC Initiative before its wide-ranging review. All are likely to start receiving increased relief as from January 2000, and in addition they should benefit from the 100 per cent cancellation initiatives of the USA, the UK and Canada. The glaring omission is Guyana, which also reached completion point in the old initiative. Why has it been pushed back in the line?

The IMF is being duplicitous. In the summer it supported the government in its action to award pay increases to striking public sector workers, following the recommendations of the independent arbitration tribunal. The government originally wanted to agree to 12 per cent, but the tribunal recommended 31.6 per cent and the IMF and World Bank in a meeting with the President Bharrat Jagdeo in the summer recommended the government award the 31.6 per cent settlement. This has meant that the government has been unable to keep to previously agreed targets for government spending, and as a result the IMF is blocking a quick release of the new HIPC debt relief.

The IMF and the creditors it represents are imposing yet further conditions on a country already borne down from unpayable debt. Guyana is now into its third five-year structural adjustment programme, it passed its completion point in HIPC in May 1999, and there should be no further conditions imposed. However, once again the IMF is using debt relief as a lever for increasing its dominance over debtor countries. This will also delay the provision of debt relief by Britain (a total of £74 million) and other countries. Jubilee 2000 denounces this and calls for the extra relief agreed in Cologne to be released by creditors.

Guyana's case has highlighted the weaknesses of Gordon Brown's recent commitment to 100% debt cancellation for the poorest countries. Whilst he has said that the conditions for debt relief would be only based on ensuring resources are used for poverty eradication, his commitment to cancel 100% of poor countries debts is still dependent on the progress of the HIPC initiative, which has been heavily criticised for its delays and for the fact it is tied to strict conditions that harm the poor.

Commenting on the delay, Director of Jubilee 2000, Ann Pettifor, said : “The government and people of Guyana need debt relief urgently. The first HIPC left Guyana still paying 40 per cent of its government revenue on servicing debt, and it urgently needs the extra relief promised by the G-7 in Cologne. It is completely wrong for the IMF to delay the delivery of debt relief by imposing yet more conditions. As ever, it is the poor and vulnerable who suffer the most from the delay.”