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 Press Release 
04 02 04 


US brokers debt relief for Iraq - but blocks relief for poorest country in the world. 

In a briefing issued today, nef (the new economics foundation) exposes the double standards of major western creditors towards debtor nations, particularly the US and Germany. (See attached). Nef is reliably informed that these two powerful creditors are deliberately blocking and delaying legitimate and highly justified debt relief for Ethiopia. 

Under the Heavily Indebted Poor Country Initiative (HIPC), the US and Germany are party to formal agreements to cancel the debts of the poorest, most indebted nations. In the event of external shocks these creditors have agreed to "top up" debt relief so that debtor nations can be restored to sustainable levels of indebtedness

In the case of Ethiopia, World Bank and IMF officials have calculated that under the terms of the initiative, Ethiopia needs additional $700 million debt relief to become sustainable. This recommendation is being blocked by intransigent US and German World Bank/IMF shareholders. At the same time the US is applying intense international pressure to ensure that Iraq, whose future export revenues are projected to be 35 times those of Ethiopia, benefits from debt relief. 

Ann Pettifor, director of Jubilee Research at nef said today: "In Cologne in June, 1999, Germany's Chancellor led the creation of the "Enhanced" HIPC Initiative. At that Summit, the US and other G8 leaders promised their electorates - led by Jubilee 2000 supporters - that countries like Ethiopia would benefit from debt relief. 

"Today western creditors are playing fast and loose with that commitment, and with their own international rules and obligations. By bending over backwards to cancel Iraq's debt, and at the same time wilfully flouting their own commitments to Ethiopia, creditors are breaking promises to their electorates, as well as undermining progress in heavily indebted countries. 

"We call on the US and Germany to honour commitments made to Ethiopia - and immediately grant her the relief calculated as essential by officials in the World Bank and IMF."

End. 

See also:  Doing nothing for Ethiopia A briefing by Jubilee Research at nef (13-02-04)