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Will Debt Relief Bring Relief to Sierra Leone?
-- Pushpa Sathish, Staff Writer
“Blood Diamond” did not just bring in the laurels for Leonardo Di Caprio; it also called the world’s attention to a tiny African nation battered and bruised beyond redemption because of a bloody civil war. The movie shed light on how the rebels in Sierra Leone funded their war – by trading in diamonds illegally. The country has peace now, but that’s all there is, besides abject poverty and hunger.
In an attempt to help Sierra Leone back on its economic feet, the Highly Indebted Poor Countries (HIPC) initiative, which allows poor countries to write off international debts, and the Multilateral Debt Relief Initiative (MDRI) cleared the country’s debts to the World Bank, the International Monetary Fund (IMF) and the African Development Bank (AfDB). But corruption is rife, and the 5 million people of Sierra Leone worry if they will benefit in any way from the debt relief. With the need to repay removed, will ministers fritter away the economic relief received? Or will they use it wisely to fight corruption, eradicate poverty and improve the country’s economy.
Sierra Leone faces a food crisis and has one of the highest maternal mortality rates in the world. The country’s economy grew 7.5 percent last year, and is expected to rise a further 6.5 percent this year.
Protests Mar Kyrgyz Decision to Join HIPC
-- By Pushpa Sathish, Staff Writer
While the citizens of most debt-ridden countries would welcome debt relief with open arms, the people of Kyrgyz are up in arms against the country’s decision to join the Heavily Indebted Poor Countries (HIPC) program. The former Soviet Union member with a population of 5 million is one of the poorest with debts totaling $2 billion, and by becoming a member of this initiative, stands to gain relief between $250 million and $400 million.
But stumbling blocks are rising up in the form of the Forum of Young Politicians who are protesting the move and calling for the resignation of the president and the government and the dissolution of the parliament if the country joins HIPC. The angry activists have already staged three demonstrations this month against the program run by the International Monetary Fund and the World Bank, claiming that it was just a ruse to allow foreign companies to gain control over Kyrgyz’s energy sector. IHT reports:
The protesters held signs reading "WB, IMF — killers and occupiers" and "HIPC will strangle Kyrgyzstan." They marched to the World Bank office, where they burnt down an effigy symbolizing the HIPC program that they carried there in a coffin.
Japan Writes Off Mozambique Debts
-- By Pushpa Sathish, Staff Writer
A meeting between the foreign ministers of Japan and Mozambique has resulted in debt relief to the tune of US$60 million for the African nation. With more than 75 percent of Mozambique’s population living below the poverty line, the writing off of the debt under the Heavily Indebted Poor Countries (HIPC) debt-relief scheme comes as a weapon in its fight against poverty. The Washington Post reports:
Mozambique's finance minister, Manuel Chang praised Tokyo for the assistance. “This will help our government strengthen its efforts in the struggle against poverty,” he said. Chang also said that cooperation between Japan and Mozambique had experienced “tremendous growth in the last few years.”
Poverty Reduction Support for Georgia
-- By Pushpa Sathish, Staff Writer
As part of an ongoing strategy to support the budget of Georgia, the World Bank has approved the Poverty Reduction Support Credit (PRSC) for the country. Accordingly, $20 million will be provided to augment the objectives and policies of the Economic Development and Poverty Reduction Program. The program focuses on eliminating corruption, supporting reform measures, strengthening implementation capacity, and monitoring and evaluating policy formulation. Georgia has been the beneficiary of $830 million since it joined the World Bank in 1993. The World Bank reports:
The series of Poverty Reduction Support Operations are a key component of the new Country Partnership Strategy (CPS) for Georgia, which was approved by the World Bank’s Board of Executive Directors on 15 September, 2005. The Strategy envisages a program of assistance of about $143 million and covers the period 2006-2009.
Debt Relief for 33 Countries Under MDRI
As many as 33 African countries are likely to gain debt relief under the Multilateral Debt Relief Initiative (MDRI) provided by the African Development Fund (ADF), according to a statement from the concessional window of the African Development Bank (AfDB) Group. The MDRI was put forward at the Gleneagles Summit in July 2005.
It will wipe out debts incurred by countries that had reached or would soon reach the completion point under the Highly Indebted Poor Countries Initiative (HIPC), to three multilateral financial institutions – the African Development Fund (ADF), the International Development Association (IDA) of the World Bank, and the International Monetary Fund (IMF). Ethiopia, Tanzania, Uganda and Zambia find their names among the fourteen countries that are in the Post-Completion Point Countries. All Africa reports:
According to the bank group, the MDRI is expected to give beneficiary countries the opportunity to reduce their overall debt service payments substantially and, through continued good performance, secure additional resource flows to help them attain the Millennium Development Goals.
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