African relief: Praise and caution

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-- African relief: Praise and caution

Posted by josh4 on Jun-12-2005 19:42:

African relief: Praise and caution

quote:
African relief: Praise and caution

(CNN) -- The new head of the World Bank has praised a historic agreement by Group of Eight finance ministers to cancel up to $55 billion in foreign debt owed by some of the world's poorest nations.

But Paul Wolfowitz on Sunday also urged G8 nations to extend the relief package to Nigeria, Africa's biggest debtor.

Speaking a day after the G8 announcement, Wolfowitz said creditor nations "will hopefully come up with a deal to forgive Nigeria's debt. I'm very positive that something serious will happen."

Wolfowitz, who took over as president of the 184-nation development bank last week, said he was "really delighted" with the debt deal.

He was speaking to reporters after arriving in the Nigerian capital, Abuja, on the first leg of a four-nation Africa tour.

On Saturday in London, the G8 ministers backed a plan that calls for an immediate scrapping of 100 percent of the debt owed by 18 countries. (Full story)

Those countries -- many in sub-Saharan Africa -- owe about $40 billion to the World Bank, the International Monetary Fund and the African Development Bank.

The G8 ministers also said 20 other countries could be eligible for debt relief if they meet targets for good governance and tackling corruption -- bringing the total package to more than $55 billion.

Nigeria is Africa's most populous nation and the most heavily indebted country on the continent, owing $35 billion. But as the world's seventh-largest oil exporter, Nigeria doesn't meet the World Bank definition of a low-income country.

The G8 ministers said Nigeria's foreign debt would be considered separately by the Paris Club of international lenders.

Saturday's agreement was reached ahead of a G8 summit July 6-8 in Gleneagles, Scotland, were the debt relief package will need to be endorsed by member countries -- the United States, Britain, Japan, Canada, Russia, Germany, Italy and France. (Special report)

The countries to received immediate debt relief are Benin, Bolivia, Burkina Faso, Ethiopia, Ghana, Guyana, Honduras, Madagascar, Mali, Mauritania, Mozambique, Nicaragua, Niger, Rwanda, Senegal, Tanzania, Uganda and Zambia.

Sub-Saharan Africa owe about $68 billion to international lending agencies.

The debts would be written off by the lenders in an effort to allow the debtor countries to start fresh, get their books in order and eventually be able to borrow again for economic development, health, education and social programs, rather than simply to repay existing loans.

While the accord was generally greeted with enthusiasm, others struck a note of caution.

A spokesman for Make Poverty History -- coalition dedicated to the eradication of poverty -- said this is "good news, but more needs to be done."

"This is some of the debts of some of the world's poorest countries. And we have been campaigning for that 100 percent to be 100 percent of all the debts of all the world's poorest countries," Stephen Rand said.

On Sunday, South Africa's Archbishop Desmond Tutu said the accord was as "a splendid start" but urged the G8 to extend the relief deal to cover about 62 countries that are heavily indebted.

Tutu, who is on a speaking tour of Britain, also called on officials to closely monitor the debt relief package to ensure funds were not diverted by corrupt leaders.

"It's so important that NEPAD (New Partnership For Africa's Development) and the AU (African Union) should begin to be quite serious about applying their review system to ensure that money that is going to be saved does in fact go to the people who most need it," Tutu told BBC Television.

Find this article at:
http://edition.cnn.com/2005/WORLD/e...rica/index.html

is this really going to help? i can just see these countries right back where they started in a couple years

Posted by wolverine16 on Jun-12-2005 20:42:

Re: African relief: Praise and caution

quote:
Originally posted by josh4
is this really going to help? i can just see these countries right back where they started in a couple years

It seems to be a good first step and the cancellation of debt will certainly help, but I agree that it wont really solve the problems that cause poverty and disease in many African countries. The Sub-Saharan countries with the most stable governments and least corruption should be able to get on the right path if they invest properly in infrastructure and agriculture techniques. Much of the problem for them in the past was that they would have to make cuts in education, healthcare, etc. in order to obtain loans and pay interest.

Posted by metalgearsolid on Jun-13-2005 01:02:

wouldn't work due to how much aids has striken some of these african countries also a lot of corrpution and theres alot of rebel groups too. Most african countries would be better off if they stayed as colonies

Posted by Dupz on Jun-13-2005 05:06:

Debt forgivness is, of course, going to benefit these countries greatly, but it will only provide short term relief if we dont build on this foundation.

Africa needs truly benevolent governments which promote legitimate judicial systems. Without this, and with continuing tribal wars, the continent will be going nowhere.

Posted by BadBadNeil on Jun-13-2005 17:44:

I guarantee that what will happen next is the same countries will run up the debt again, and then in another 10 years we will be in the same situation.

I read the other day in an AP article that the fertile fields in the Congo areas of Africa if properly farmed could provide enough food for most of Africa so they wouldn't have to rely on aid, but farmers are too scared to farm because of crime and the government... Maybe that would be a good place to start. Let's get them feeding themselves first.