[Peace-discuss] Fwd: Africa Action Protests 60th Anniversary of World Bank & IMF

[Alfred Kagan]

>Date: Wed, 21 Apr 2004 10:57:05 -0500
>From: Africa Action <africaaction at igc.org>
>Organization: Africa Action
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>To: ejlist at africaaction.org
>Subject: Africa Action Protests 60th Anniversary of World Bank & IMF
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>FOR IMMEDIATE RELEASE
>Contact: Ann-Louise Colgan 202-546 7961
>
>Africa Action Protests 60th Anniversary of World Bank & IMF
>
>Releases new Talking Points on Africa's debt & Iraq's debt;
>Co-Sponsors "Unhappy Birthday Party" outside World Bank
>
>Wednesday, April 21, 2004 (Washington, DC) - As the World Bank and 
>IMF begin their annual Spring meetings in Washington, DC, Africa 
>Action today co-sponsors an "Unhappy Birthday Party" to protest the 
>harmful policies of these institutions, which mark their 60th 
>anniversary this year. Salih Booker, Executive Director of Africa 
>Action will be among the speakers at the "unhappy birthday" rally to 
>be held outside the World Bank from 12 Noon to 2:30pm this afternoon.
>
>Also today, Africa Action releases a new set of talking points 
>entitled, "Africa's Debt & Iraq's Debt - Washington's Double 
>Standard." This document notes the refusal of the World Bank and IMF 
>to put Africa's debt crisis at the top of their meeting agenda this 
>week and strongly condemns the failure of the U.S. government to 
>advocate for an urgent solution to Africa's debt crisis, as it has 
>been doing in the case of Iraq.
>
>Salih Booker, Executive Director of Africa Action said today, "This 
>week, the U.S. and other rich countries who control the World Bank 
>and IMF will again refuse to address Africa's devastating debt 
>burden. At the same time, however, the Bush Administration has been 
>actively pursuing the cancellation of Iraq's foreign debt. This 
>reveals a blatant double standard in U.S. policy that should be 
>rejected outright."
>
>The talking points, included below, note the terrible human toll of 
>Africa's $300 billion debt burden, and the illegitimate and odious 
>nature of much of this debt. As African countries struggle to cope 
>at ground-zero of the HIV/AIDS pandemic, they are forced to spend 
>more money each year repaying old, illegitimate debts than they can 
>spend on health care for their own people.
>
>Africa Action notes that the current international debt relief 
>framework, the Heavily Indebted Poor Countries (HIPC) Initiative is 
>widely acknowledged to have failed as a solution to the debt crisis. 
>But the U.S. government, the largest shareholder at the World Bank 
>and IMF, refuses to use its power to advocate for debt cancellation 
>for Africa. Rather, since December, the White House has been 
>aggressively pursuing the cancellation of Iraq's foreign debts.
>
>According to Booker, "There are strong reasons to consider canceling 
>Iraq's debts, but these arguments must also apply in the case of 
>African countries. If Iraq's debts are considered 'odious', then 
>much of African countries' debts, also the product of corrupt and 
>repressive leaders, must similarly be considered odious."
>
>Booker continued, "As the World Bank and IMF meet this week, the 
>U.S. should use this opportunity to call for the cancellation of 
>Africa's debts. These institutions can afford to do this from their 
>own resources, and this can be the only logical outcome of the Bush 
>Administration's policy on Iraq's debt."
>
>Today's "unhappy birthday party" will bring activists from around 
>the country to Washington, DC to demand debt cancellation for poor 
>countries and to deliver thousands of "unhappy birthday cards" on 
>the World Bank and IMF's 60th anniversary. Africa Action joins 
>Jubilee USA Network and other sponsors in declaring, "It's no Time 
>for a Party! It's time to Drop the Debt!"
>
>The full set of talking points follow, and are also available on 
>Africa Action's website at 
>http://www.africaaction.org/newsroom/docs/africairaq0404.pdf :
>
>-MORE-
>
>Africa's Debt & Iraq's Debt - Washington's Double Standard
>
>Talking Points by Africa Action
>April 2004
>
>"When a despot falls, his debt should disappear with him. That is 
>what the White House has tasked former Secretary of State, James 
>Baker, to convince Iraq's major creditors to accept. But when it 
>comes to Africa, Washington practices a double standard..."
>
>This week when the World Bank and International Monetary Fund (IMF) 
>hold their annual spring meetings in Washington, DC, Africa's debt 
>crisis will hardly appear on their agenda.
>
>As these wealthy and powerful institutions mark their 60th 
>anniversary, the U.S. and other rich countries that control them 
>will again this week refuse to address the massive burden of 
>illegitimate debt that African countries face. At the same time, 
>however, the Bush Administration has been actively pursuing the 
>cancellation of Iraq's $120 billion debt as a means to support that 
>country's supposed transition to democracy.
>
>The following talking points explore the double standard in U.S. 
>policy that brings the White House to advocate for the cancellation 
>of Iraq's unsustainable debt burden but causes it to ignore the 
>massive debt crisis faced by African countries.
>
>
>Africa's Debt Crisis
>
>* Africa's external debt burden currently stands at more than $300 
>million, in a continent where most people subsist on less than $1 
>per day.
>* Africa's debt crisis is the single biggest obstacle to the 
>continent's development and to the fight against HIV/AIDS. It 
>represents a crippling load that undermines economic and social 
>progress.
>* African countries spend almost $15 billion each year repaying 
>debts to the World Bank and International Monetary Fund (IMF) and 
>other creditors.
>* Servicing these debts diverts money directly from spending on 
>health care, education and other important needs. While African 
>countries struggle to cope with the devastating effects of the 
>HIV/AIDS crisis, they are currently forced to spend more money on 
>debt repayments than on health care for their people.
>* This year almost 3 million Africans will die of AIDS. 500,000 
>African children will die of malaria. These deaths could be 
>prevented if African governments could spend more money on health 
>care than on debt repayments.
>* It is estimated that African countries pay $1.51 in debt service 
>for every $1 they receive in aid.
>
>
>Illegitimate Debt
>
>* Most of Africa's foreign debt is illegitimate in nature because of 
>the circumstances under which it was incurred, as well as the 
>harmful effects it now has on the continent's development.
>* Much of Africa's debt was incurred by unrepresentative regimes 
>during the era of Cold War patronage, when loans were made to 
>corrupt leaders who used the money for their own personal gain, 
>often with the full knowledge and support of lenders like the U.S. 
>government and the World Bank and IMF. [For example, in the 
>Democratic Republic of the Congo (DRC), formerly Zaire, dictator 
>Mobutu Sese-Seko received more U.S. aid than the rest of Sub-Saharan 
>Africa combined during much of the Cold War, even though it was well 
>known that this money was being diverted into his Swiss bank 
>accounts. The people of the DRC should not now have to pay back 
>loans from which they saw no benefit.]
>* In many African countries, debts were contracted by repressive or 
>despotic regimes and used to strengthen the hold of that regime, 
>contrary to the interests of the nation and its people. These are 
>considered illegitimate "odious debts", and this is an established 
>legal principle. [For example, in South Africa, the apartheid regime 
>took out more than $18 billion in foreign debt in its last 15 years 
>in power. The people of South Africa, the victims of the apartheid 
>regime, should not now be forced to pay the cost of their own 
>previous repression.]
>* In many African countries, debts have swelled over time because of 
>high interest rates and other conditions imposed by creditor 
>governments and banks. These debts are illegitimate, since the 
>original debt has already been repaid many times over.
>* Many African activists and advocacy groups question the notion of 
>an African "debt" to the U.S. and European countries after centuries 
>of exploitation and plunder. They consider all of Africa's debts 
>illegitimate and ask, "Who really owes whom?"
>
>
>U.S. Policy on Africa's Debt
>
>* The U.S., other G8 leaders and the World Bank and IMF established 
>the Heavily Indebted Poor Countries (HIPC) Initiative in 1996 to 
>address the debt crisis in Africa and other poor regions. HIPC 
>remains the dominant international debt relief plan integrating all 
>bilateral, multilateral and private creditors in one framework for 
>select countries.
>* Of the 42 countries selected by the World Bank and IMF as 
>potential recipients of HIPC relief, 34 are in sub-Saharan Africa. 
>These countries are eligible for some debt relief, but no African 
>country has been offered complete debt cancellation, and many get no 
>relief whatsoever.
>* Over the past eight years, the HIPC initiative has fundamentally 
>failed to resolve Africa's debt crisis. It has not reduced the debts 
>of African countries to sustainable levels. In fact, it serves the 
>interests of creditors by continuing to extract the maximum possible 
>in debt repayments from the world's poorest countries.
>* Recent World Bank and IMF reports have admitted that HIPC is not 
>succeeding in addressing the debt crisis in Africa and other poor 
>regions. But the U.S. refuses to encourage Africa's creditors to 
>move beyond this framework.
>* President Bush and the U.S. Congress have acknowledged that 
>Africa's debt crisis represents a real obstacle to the continent's 
>efforts to combat HIV/AIDS and poverty.
>* Although the U.S. is a relatively minor bilateral creditor of 
>African countries, it is the single largest shareholder in the World 
>Bank and the IMF, to whom most of Africa's debts are owed. As such, 
>it holds major influence over the international response to Africa's 
>debt crisis.
>* The U.S. continues to refuse to use its power to promote the 
>cancellation of Africa's illegitimate foreign debts, even though the 
>World Bank and IMF can afford to write off this debt from their own 
>books using their own existing resources.
>
>
>Iraq's Debt
>
>* U.S. Treasury officials estimate that Iraq's debt amounts to 
>$100-$120 billion.
>* Of this total debt stock, some $40 billion is owed to Paris Club 
>creditors (G8 countries, including the U.S.), and the remaining $80 
>billion is owed to Arab nations and others outside the Paris club.
>* Jubilee Iraq estimates that an additional $50 billion is owed by 
>Iraq in war reparations to countries like Kuwait and to individuals 
>who claim damages from Iraq.
>* Much of Iraq's debt can be considered "odious", as it was 
>contracted by Saddam Hussein's regime and used for the repressive 
>purposes of this dictatorship, with the full knowledge of creditor 
>countries and institutions. This money was not spent on the needs or 
>interests of the Iraqi people.
>* Comparing Iraq's debt burden with the size of its economy and 
>export earnings, it is clear that Iraq is a very heavily indebted 
>country.
>* In addition, Iraq has urgent relief and reconstruction needs as it 
>enters into a period of important transition.
>
>
>U.S. Policy on Iraq's Debt
>
>* In December 2003, President Bush appointed James Baker III, a 
>long-time friend and advisor to the Bush family and former Secretary 
>of State under George H. Bush, as Special Envoy for Iraqi debt 
>reduction. He is tasked with seeking an international deal to reduce 
>and restructure Iraq's massive foreign debt in order to promote 
>peace and reconstruction in Iraq.
>* Baker traveled to Europe in December 2003, to meet with some of 
>Iraq's creditor nations. He secured pledges from Britain, France, 
>Germany, Italy and Russia to relieve much of the $40 billion owed to 
>them by Iraq.
>* Baker traveled to the Gulf region in the beginning of 2004 and 
>negotiated commitments to waive much of the $50 billion Iraq owes to 
>countries in that region.
>* Early in 2004, reports indicated that the Bush Administration's 
>goal was to relieve Iraq of two-thirds of its debt burden so that 
>future oil earnings could be spent on reconstruction rather than on 
>debt repayments.
>* Speaking in April, Baker called Iraq's debt "simply 
>unsustainable", and referred to it as a major obstacle to rebuilding 
>the economy and government of that country.
>* Baker insists that debt relief for Iraq must be achieved quickly, 
>in order to allow Iraq to find its feet. He has stated that efforts 
>to enforce the debt could sink the Iraqi economy and dash hopes for 
>a solid transition in Iraq.
>
>
>The Double Standard
>
>* There are many compelling reasons to reduce Iraq's debt burden, 
>but these arguments are not being applied equally by the U.S. in the 
>case of African countries' debt crisis.
>* The U.S. is supporting debt relief for Iraq because it considers 
>that it has vital interests in Iraq and the larger Middle East 
>region. U.S. corporations also have major economic interests in 
>Iraq, which the Bush Administration wishes to promote.
>* The U.S. does not consider it has such vital interests in Africa, 
>despite strong historical ties with the continent and important 
>economic and political relations with African countries. The U.S. 
>acknowledges that Africa's debt hinders efforts to combat poverty 
>and HIV/AIDS, but it refuses to support debt cancellation for Africa.
>* Another key difference between Iraq's debt and Africa's debt is 
>who the creditors are. Much of Iraq's debt is bilateral and is owed 
>to rich European countries and to Japan. Most of Africa's debt is 
>multilateral and is owed to the World Bank and IMF, where the U.S. 
>is the principal shareholder. The U.S. appears more willing to 
>pursue the reduction of debts for which it is not a creditor.
>* The Bush Administration and the U.S. Congress argue that much of 
>Iraq's debt is odious, but they refuse to apply the same criteria to 
>African countries' debt when it is clear that much of Africa's debt 
>is also odious.
>* The U.S. appears unwilling to support debt cancellation for Africa 
>because the U.S. actually gains a great deal from Africa's economic 
>enslavement. The U.S. and other rich countries, as well as the World 
>Bank and IMF, use Africa's debt as leverage to manipulate the 
>continent's economic fate to serve their interests.
>* Despite the social and economic costs of this massive outflow of 
>resources from the world's poorest region, the U.S. continues to 
>insist that these debts be repaid. Yet the U.S. does not feel that 
>Iraq's debt should be enforced in the same way. Such a blatant 
>double standard in U.S. foreign policy must be exposed and rejected 
>outright.
>
>
>What the U.S. Should Do
>
>* The U.S. is the largest and most powerful shareholder in the World 
>Bank and IMF, Africa's primary creditors, and it should use this 
>power to promote debt cancellation for Africa.
>* A new report released by the Debt & Development Coalition Ireland 
>confirms that the World Bank and IMF have the resources to cancel 
>all the debts owed to them by the poorest countries without 
>negatively impacting their credit rating or lending ability.
>* Secretary General of the United Nations, Kofi Annan, has 
>repeatedly called for a new solution to the debt crisis and the 
>suspension of debt service payments in the interim.
>* As a first step to supporting debt cancellation for Africa, Africa 
>Action believes that the U.S. government should immediately do the 
>following:
>1. Undertake an inventory of the debts currently being repaid by 
>African countries, in order to determine the legitimacy of creditor 
>claims.
>2. Complete a study to ascertain what would be the cost to creditors 
>of the full cancellation of Africa's debts.
>3. Declare a moratorium on debt repayments by African countries 
>until such time as an inventory of these debts has been compiled and 
>the costs of 100% cancellation have been determined, these two 
>studies providing a foundation for moving towards a just resolution 
>to the continent's debt crisis.
>
>####


-- 


Al Kagan
African Studies Bibliographer and Professor of Library Administration
Africana Unit, Room 328
University of Illinois Library
1408 W. Gregory Drive
Urbana, IL 61801, USA

tel. 217-333-6519
fax. 217-333-2214
e-mail. akagan at uiuc.edu