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Is G8 Debt Cancellation Deal In Jeopardy?

Earlier this month at the Gleneagles Summit, G8 leaders agreed to cancel the debts of 18 of the world’s poorest countries. They called for the immediate write-off of 40-billion dollars of debt. Another nine countries could qualify for debt cancellation by 2006.

Despite that long-awaited agreement, there’s now opposition among some members of the IMF, the International Monetary Fund. And there are fears the debt cancellation agreement could be weakened.

Debi Kar is a spokesperson for Jubilee Network, an organization campaigning for debt cancellation. Ms. Kar spoke to English to Africa reporter Joe De Capua about the position of some IMF members. She says, “What it is, is these four non G8 European executive directors fro Belgium, the Netherlands, Norway and Switzerland and they’ve written a memo saying that they want the debt cancellation to actually not be 100 percent debt stock cancellation, but in fact to be debt service relief over a period of time. And to have it phased in. And the reason they’re saying this is because they want to ensure countries are implementing the so-called adequate policies under the IMF loan-common agreement and that that can only happen with this continuing financial leverage of continuing debt service.”

The G8 cancellation deal has been a long time coming, so why would some countries object?

Ms. Kar says, It comes down to this continuing sense that countries – particularly these 18 countries under the Heavily Indebted Poor Countries Initiative – that they need to continue along this path of, what we sometimes call, structural adjustment or neo-liberal economic policies. And so these four executive directors at the IMF are concerned that with a hundred percent debt cancellation that the leverage donor countries often use in order to get these countries to pursue these economic policies that that leverage will be gone. And that’s why they’re not wanting a hundred percent debt cancellation for these countries.” She says if the four IMF executive directors get more support, it could affect the G8 deal.