ASHLEY SEAGER, London | Monday
COMMONWEALTH finance ministers gather for their annual meeting this week in Malta with debt, international financial crisis prevention and tax havens on the menu for discussion.
Meeting just ahead of the annual meetings of the International Monetary Fund and World Bank in the Czech capital Prague, the group of 54 mainly former British colonies hope to forge consensus on issues of particular importance to them.
They are worried that too little has been done to make the international financial system less vulnerable to crises such as that of 1998, that too little progress has been made with a scheme to write off poor countries’ debts and that plans to clamp down on offshore banking centres could hit the income of some of their member countries.
With regard to the IMF/World Bank Highly Indebted Poor Countries (HIPC) initiative, the Commonwealth thinks the process needs less stringent conditions and to be radically speeded up.
The HIPC scheme, intended to help about 40 of the world’s poorest countries, was overhauled last year after it became clear that it was going nowhere fast. But officials say this has made little difference on the ground.
”They have tightened up the conditions. There is now easier entry but a more difficult exit,” said one official. Ten Commonwealth member countries, including Uganda and Mozambique, are also HIPCs.
The Group of Seven rich nations has pledged to get 20 HIPC countries to ”decision point” – where interim debt relief begins to flow – by the end of this year. But to date only 10 are in and time is running out if the target is to be hit.
The problem for the countries that have reached decision point is that debt relief has been minimal and then countries have to meet a number of demanding targets, including having a detailed poverty reduction scheme in place, before they can apply for deeper debt write-offs. – Reuters