power had boosted the movement to cancel the debt of the world’s poorest
countries, even if there is still little to show for its efforts. At the
International Monetary Fund and World Bank meetings in Prague last month, the
most interesting speaker was U2’s Bono, who held a press conference with World
Bank President James Wolfensohn at his side. Bono was articulate and charming as
a spokesman: "You’ll have to excuse my shyness," he began. "I’m
not used to speaking to crowds of less than 70,000 people."
lauded Wolfensohn for starting the debt relief process four years ago but firmly
insisted that now was the time to finish it. He noted that 19,000 children are
dying each day, and their lives could be saved with the money that their
governments now pay in debt service to wealthy foreign creditors. If these
children were dying on the streets of London or New York or Paris, he said, it
would be considered a holocaust. But they are in Africa and in poor countries
elsewhere, so the Fund and the Bank do not feel any great urgency to act.
sat quietly through Bono’s speech but later told reporters that he did not agree
with the rock star’s demand, put forth by Jubilee 2000 and religious groups
worldwide, for cancellation of the poor countries’ debt. And indeed the IMF and
the World Bank offered no new initiatives for debt relief at the Prague
meetings. Instead they simply repeated the promises made last year to increase
the number of countries getting relief under their plan for Heavily Indebted
Poor Countries (HIPC).
the HIPC initiative was launched in 1996, and of 41 countries promised debt
relief, only one– Uganda– has actually seen its debt service payments reduced.
And for those who might follow, the conditions attached to any debt relief could
well cause more economic destruction and misery than the debt itself.
of these conditions has been to impose "user fees" on formerly free
public services such as primary education and health care in impoverished
countries. According to a World Bank review of the its Health, Nutrition, and
Population lending program, 75 percent of these Bank projects in sub-Saharan
Africa either established or expanded user fees.
fees are a horrible policy, as evidenced by the enormous increases in school
enrollment when they are removed: for example in Malawi, whose per capita income
is less than $200 per year, primary school enrollment jumped by 50% when a small
school fee was eliminated in 1994. Poor people have also suffered and even died
when these fees have been imposed at health clinics.
for the world’s poor have taken their battle from the streets to the halls of
Congress, in a full court press to abolish these requirements. Over 120
non-governmental organizations– including the AFL-CIO, the Presbyterian Church,
and Jubilee 2000 USA– have joined in. But the Treasury Department has not yet
agreed to legislation that would require the United States to oppose such
mandated user fees within the World Bank.
requirement would not guarantee the end of user fees. But the chances are good
that it would force the Bank and the Fund to stop inflicting this particular
form of pain on the school children, as well as citizens in need of medical
attention, in poor countries.
the larger question of debt relief, we are still a long way from meaningful
reform. The $435 million appropriation now making its way through Congress,
which goes mainly to the HIPC initiative, will do very little to ease the burden
of debt on the world’s poor. Even if all the promised relief were to
materialize, most of the recipient countries would remain saddled with debt
payments that constitute an enormous drain on their economies. And in the mean
time, the hoops and hurdles and strings attached will drag out the process
indefinitely, while more destructive economic policies are imposed.
US Treasury Department, which effectively controls the creditors’ cartel headed
up by the IMF and the Bank, tipped its hand last month: one of its officials
told the New York Times that the latest promises to speed up debt relief were
"largely ‘window dressing’ designed to placate protesters."
a growing movement is demanding more than window dressing, and is building the
organizational and political muscle to win it. Two weeks ago San Francisco’s
Board of Supervisors voted unanimously to boycott World Bank bonds, joining an
international effort modeled on the successful divestment campaign that helped
bring down apartheid in South Africa.
days of minority rule at these powerful institutions may also be numbered.
Weisbrot is co-director of the Center for Economic and Policy Research in