Star power had boosted the movement to cancel the
debt of the world's poorest countries, even if there is still
little to show for its efforts. At the International Monetary
Fund and World Bank meetings in Prague last month, the
most interesting speaker was U2's Bono, who held a press
conference with World Bank President James Wolfensohn at
his side. Bono was articulate and charming as a spokesman:
"You'll have to excuse my shyness," he began. "I'm not used
to speaking to crowds of less than 70,000 people."
Bono lauded Wolfensohn for starting the debt relief
process four years ago but firmly insisted that now was the
time to finish it. He noted that 19,000 children are dying each
day, and their lives could be saved with the money that their
governments now pay in debt service to wealthy foreign
creditors. If these children were dying on the streets of
London or New York or Paris, he said, it would be
considered a holocaust. But they are in Africa and in poor
countries elsewhere, so the Fund and the Bank do not feel
any great urgency to act.
Wolfensohn sat quietly through Bono's speech but
later told reporters that he did not agree with the rock star's
demand, put forth by Jubilee 2000 and religious groups
worldwide, for cancellation of the poor countries' debt. And
indeed the IMF and the World Bank offered no new
initiatives for debt relief at the Prague meetings. Instead they
simply repeated the promises made last year to increase the
number of countries getting relief under their plan for
Heavily Indebted Poor Countries (HIPC).
But the HIPC initiative was launched in 1996, and of
41 countries promised debt relief, only one-- Uganda-- has
actually seen its debt service payments reduced. And for
those who might follow, the conditions attached to any debt
relief could well cause more economic destruction and
misery than the debt itself.
One of these conditions has been to impose "user
fees" on formerly free public services such as primary
education and health care in impoverished countries.
According to a World Bank review of the its Health,
Nutrition, and Population lending program, 75 percent of
these Bank projects in sub-Saharan Africa either established
or expanded user fees.
Such fees are a horrible policy, as evidenced by the
enormous increases in school enrollment when they are
removed: for example in Malawi, whose per capita income is
less than $200 per year, primary school enrollment jumped
by 50% when a small school fee was eliminated in 1994.
Poor people have also suffered and even died when these fees
have been imposed at health clinics.
Advocates for the world's poor have taken their battle
from the streets to the halls of Congress, in a full court press
to abolish these requirements. Over 120 non-governmental
organizations-- including the AFL-CIO, the Presbyterian
Church, and Jubilee 2000 USA-- have joined in. But the
Treasury Department has not yet agreed to legislation that
would require the United States to oppose such mandated
user fees within the World Bank.
This requirement would not guarantee the end of user
fees. But the chances are good that it would force the Bank
and the Fund to stop inflicting this particular form of pain on
the school children, as well as citizens in need of medical
attention, in poor countries.
On the larger question of debt relief, we are still a
long way from meaningful reform. The $435 million
appropriation now making its way through Congress, which
goes mainly to the HIPC initiative, will do very little to ease
the burden of debt on the world's poor. Even if all the
promised relief were to materialize, most of the recipient
countries would remain saddled with debt payments that
constitute an enormous drain on their economies. And in the
mean time, the hoops and hurdles and strings attached will
drag out the process indefinitely, while more destructive
economic policies are imposed.
The US Treasury Department, which effectively
controls the creditors' cartel headed up by the IMF and the
Bank, tipped its hand last month: one of its officials told the
New York Times that the latest promises to speed up debt
relief were "largely 'window dressing' designed to placate
But a growing movement is demanding more than
window dressing, and is building the organizational and
political muscle to win it. Two weeks ago San Francisco's
Board of Supervisors voted unanimously to boycott World
Bank bonds, joining an international effort modeled on the
successful divestment campaign that helped bring down
apartheid in South Africa.
The days of minority rule at these powerful
institutions may also be numbered.
Mark Weisbrot is co-director of the Center for Economic
and Policy Research in Washington, DC.