---- Jubilee USA Network ----

For Immediate Release: September 5, 2002

Leaked IMF and World Bank Report Shows Debt Relief Program Still Failing

Despite the fact that thousands die daily as a result of international debt,

a leaked IMF and World Bank report shows that they will refuse to provide

significantly deeper and broader debt cancellation for impoverished nations

at their Annual meetings this September.

The report on the Status of Implementation of the Heavily Indebted Poor

Country Initiative (HIPC) which goes to the IMF board tomorrow, shows that

their current debt relief scheme fails to meet even its stated goal of

providing “debt sustainability” for impoverished nations. They offer slight

adjustments, all of them unsustainable in themselves, which fail to address

the core problems with their flailing program.

After the Bank and Fund’s Spring 2002 report that highlighted the problems

with HIPC, Jubilee USA Network and the NGO community offered several

alternatives or enhancements to the current program. The new report

dismisses these viable alternatives in favor of the status quo. The report

even misrepresents bipartisan legislation pending in the US Congress that

proposes to deepen debt relief.

“The IMF and World Bank need to get their facts straight,” said Marie

Clarke, National Coordinator of Jubilee USA Network. “Furthermore, we know

debt cancellation works, so there is not a moment to lose as the AIDS crisis

wipes out an entire generation in Africa. To hold back now, insisting on the

same failed ideology, is nothing short of murder.”

The report acknowledges that half of the 20 countries in line for relief

will continue to face unsustainable debts at the end of the program. This is

due to the problematic nature of the debt-to-export ratios used to assess

debt sustainability as countries face external shocks and falling commodity

prices. Instead of reconsidering their arbitrary criteria for providing

debt relief, they propose a process of “topping-up” the relief at the end

only on a case-by-case basis.

The Status of Implementation report backs up claims from Jubilee groups

around the world that debt relief is providing startling benefits for the

poor. Debt relief has led to substantial increases in spending on health

and education and no documented increases in military spending. (See

attached info for more.)

“The knowledge that life-saving debt cancellation is being held-up while

creditors tinker with a failed program is enough to bring thousands of

people to the streets of Washington at the end of the month in protest,”

said Mara Vanderslice, Outreach Coordinator of Jubilee USA Network. “We will

not rest until we see 100% debt cancellation without harmful strings

attached.”

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