25 April 2001
IMF and World Bank can afford 100% debt cancellation for poorest countries
Reality Check, a new report into the IMF and World Bank commissioned by campaign group, Drop The Debt, shows they can afford to cancel 100% of the debts in fight against HIV/AIDS.
An independent firm of accountants have unveiled a study in Washington that shows the International Monetary Fund and the World Bank can afford to cancel 100 per cent of the debts they are owed by the poorest countries.
The report is published ahead of a new push for greater debt relief for the world's poorest nations at the spring meetings of the World Bank and International Monetary Fund in Washington this weekend. U2 have been working with Jubilee 2000 and now Drop the Debt for several years to persuade the world's richest countries to liberate the poorest from unpayable debts.
London firm Chantrey Vellacott DFK's research is contained in a report by Drop the Debt, the short-term successor to Jubilee 2000 in the UK, which highlights how deeper debt cancellation is affordable and urgently required to fight the spread of HIV/AIDS in Africa. While G7 countries have pledged to wipe out the total debts they are owed by many of these countries, the IMF and World Bank have failed to do so.
The report "Reality Check: the need for deeper debt cancellation and the fight against HIV/AIDS" contains the following new findings:
* After the first 22 countries have been through the existing Heavily Indebted Poor Countries (HIPC) debt initiative agreed in 1999, they will owe more to the IMF and World Bank than they do to the next largest 17 creditors combined * The IMF and the World Bank can afford 100 per cent cancellation through a number of options, including use of reserves and net income, without impacting adversely on their ability to carry out their objectives * The 17 African countries that have benefited from HIPC will still spend $1.4 billion repaying debts each year; UNAIDS estimates the same countries require $1.5 billion to scale up their effort to combat HIV/AIDS to an adequate level * Sub-Saharan Africa as a whole spends $13.3 billion repaying debts each year; the Global AIDS Alliance estimates that Sub-Saharan countries could need up to $15 billion each year to fight the spread of HIV/AIDS * The annual cost of canceling HIPC debt owed to the World Bank and the IMF is $353 million and $368 million respectively - this is equivalent to a dollar each year for every person in the G7 countries
Adrian Lovett, Director of Drop the Debt, said: "The AIDS crisis is devastating Africa and the continent's biggest creditors, the IMF and World Bank, are still taking the money. They should take a reality check and act now to cancel the debt. From today, the old excuse that they cannot afford to do so is comprehensively demolished. "
Maurice Fitzpatrick, author of Chantrey Vellacott's audit found that "the existing debts due to the World Bank and IMF could be completely cancelled ? without jeopardizing the ability of the World Bank and the IMF to carry out their overall functions."
You can read the whole report online at www.dropthedebt.org
E-mail world leaders
ahead of the July G8 Summit when a new deal on debt cancellation may be brokered.
Find out more about the campaign to cancel the debts of the worlds poorest countries at www.dropthedebt.org