World Bank, IMF Announce Debt Relief Program for African, Latin American Countries
The World Bank and the IMF recently announced that 22 African and Latin American nations will be eligible for debt relief, as long as those countries allocate money that would have been used to pay off loans to "improv[ing] education, health care or economic development," the New York Times reports. Prompted by lobbying efforts from "religious organizations, celebrities and watchdog groups," the United States, Japan and industrial European nations agreed to "wipe out" two-thirds of the poorer countries debts -- worth an estimated $125 billion if paid today. Nearly $20 billion of that amount has been erased already. Countries designated to participate in the debt-relief program include Benin, Burkina Faso, Cameroon, Gambia, Guinea, Guinea-Bissau, Madagascar, Malawi, Mali, Mauritania, Mozambique, Niger, Rwanda, Sao Tome and Principe, Senegal, Tanzania, Uganda, Zambia, Bolivia, Guyana, Honduras and Nicaragua. Nations will be eligible for debt relief only after completing a "long process" to ensure that the money is used in "constructive ways." To date, only Uganda has received all of the promised "benefits" of the program. To extend the debt relief efforts to more nations, the World Bank and IMF eliminated some of the "hurdles" poorer countries faced when applying for debt relief, but the main requirements still remain. In a joint statement, World Bank President James Wolfensohn and IMF managing director Horst Kohler said, "To ensure that the relief is translated into poverty reduction, the beneficiary countries must continue with their economic, social, and governance reforms." U.S. Treasury Secretary Lawrence Summers "warned" that AIDS and "inadequate education" could hinder efforts to "take advantage" of the money saved from debt relief. "Our challenge now is to build on the momentum of the extraordinary coalition that came together around debt relief to help every country seize the opportunities that global economic integration affords," Summers said (Kahn, New York Times, 12/23).This is part of the KHN Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.