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Is G8 Debt  Cancellation Deal In Jeopardy?

There’s word today that an internal World Bank report is highly critical of the G8 debt cancellation plan for poor countries. The plan was announced last month at the Gleneagles summit in Scotland. Reuters says the report calls for substantial changes in the plan.

Debi Kar is a spokesperson for the Jubilee USA Network, an NGO campaigning for debt cancellation. She told English to Africa reporter Joe De Capua, “The main thing here is they’re talking about a shortfall of money to the International Development Association, which is the low-income lending facility of the World Bank. And that this shortfall would potentially mean that the G8 debt agreement as it was envisioned on June 11th at the finance ministers meeting in London…would not be implemented in the way the G8 has planned for because there would be a funding shortfall in IDA. In addition, we’ve heard something about potential conditions being imposed upon the 18 countries that were to receive immediate cancellation under the G8 agreement.”

The World Bank and IMF, International Monetary Fund, are meeting this week on the debt cancellation plan. Even if all obstacles were removed, the plan probably would not take effect until at least September when the IMF and World Bank hold a joint meeting. However, recently, some IMF members had expressed concern about the G8 debt deal and called for conditions to be imposed.

In addition, Ms. Kar says there’s concern that the nine to twenty countries on the list for possible debt cancellation could have many conditions imposed on any debt cancellation plan.