indifference
Mark Atkinson in Washington
When Asian currencies collapsed last year, the International Monetary Fund (IMF) and the World Bank came to the rescue with multi-billion-dollar bail- outs.
Since 1985, when Tanzania began implementing its IMF structural adjustment programme, the local currency, the shilling, has devalued by 1 500%, yet the country will not qualify for debt relief under the heavily indebted poor countries initiative (HIPC) until 2002.
Meanwhile Tanzania, one of the world’s poorest countries with more than 50% of its population living below the $1-a-day poverty line, is spending $8 per person serving its $7,9-billion external debt. That compares with $3 per person on health.
Christopher Mwakasese, executive director of the Tanzania Social and Economic Trust, an NGO, is angry. “If Asia can get help, why not us,” he said at the World Bank/IMF meetings last week.
HIPC was launched two years ago to provide a comprehensive framework for relieving the world’s poorest countries of unsustainable debt burdens. In this year’s IMF and World Bank meetings it was overshadowed by discussion of the global economic crisis. Nevertheless three significant proposals made by Britain’s Chancellor of the Exchequer, Gordon Brown, and International Development Secretary, Clare Short, were agreed.
First, that 22 countries should be on track for debt relief by 2000. Second, that there should be a flexible framework in place by early 1999 to help countries ravaged by war. Third, that there should be a review of HIPC by the end of next year. All this “was way beyond” what was agreed at last year’s meetings in Hong Kong, said Short.
Mwakasese welcomed Britain’s efforts, but said other creditors lacked political will to offer meaningful debt relief. He was annoyed with the World Bank’s demand for repayment of loans for its own badly designed projects. Out of 25 agricultural projects, 13 have a negative rate of return, he said.
Andrew Simms, of Christian Aid, said: “Tanzania is paying for the World Bank’s own mistakes. The money is simply going round in circles.”