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Harvard Center for International Development and The Global Coalition for Africa
Meeting on Alternative Approaches to Debt Relief for Highly Indebted Poor Countries

24- 25 September, Washington D.C.

Briefing


The Meeting on Alternative Approaches to Debt Relief took place from 24-25 September 1999 in Washington DC, USA. Organized jointly by the Global Coalition for Africa (GCA) and the Center for International Development, Harvard University (CID), the meeting attracted approximately 60 participants, including government ministers and other senior officials from highly indebted poor countries (HIPCs) and representatives of non-governmental organizations (NGOs), academic institutions, foundations, the media and international organizations such as the African Development Bank (ADB) and the United Nations Development Programme (UNDP).

The meeting aimed to bring together key stakeholders to promote debt forgiveness and a transparent debt relief programme. Over the course of the two-day meeting, participants considered HIPCs' debt repayment experiences, the recent Cologne Initiative of the Group of Seven countries (G-7), alternative approaches to debt relief and the role of NGOs and HIPCs in achieving debt relief. Participants were also addressed by leading figures from the debt relief movement, including the musician Bono, economist Jeffrey Sachs and US Congressman Spencer Bachus. The meeting's main outcome was agreement on a set of principles on achieving debt cancellation. The principles are intended to generate support for redesigning and strengthening debt relief programmes at the highest levels, particularly among bilateral and multilateral donors.

FULL SUMMARY NOW AVAILABLE : HTML ball.gif (204 bytes) TEXT ball.gif (204 bytes) PDF
 

Photos and RealAudio from the meeting

OPENING PLENARY

Ahmedou Ould-Abdallah, Executive Secretary of the GCA (seated on the right), welcomed participants and noted that the meeting was very timely given the G-7's recent Cologne Initiative and designation of the upcoming World Bank and IMF joint annual meetings as the venue for developing concrete debt relief measures.
RealAudio excerpts

Kwesi Botchwey, Director of Africa Research and Programmes, CID (above, on the left), highlighted the change of attitude on debt relief during the last year and said this helped bring about the Cologne Initiative. In spite of this recent progress, however, Botchwey warned against complacency and a return to a business-as-usual attitude that might dampen enthusiasm for change. He called for total debt forgiveness in conjunction with increased ODA.
RealAudio excerpts, part 1          RealAudio excerpts, part 2
 

Carole Collins, Jubilee 2000/USA Coordinator, noted that debt relief is an ongoing topic of debate within the US Congress. She said progress on the issue is hindered due to Republican opposition to debt relief and proposals to relieve debt through diversion of development funds. She noted that people in HIPCs often turn to NGOs for assistance when governments fail to meet social needs and underscored that NGOs cannot sustain the burden of providing services governments do not deliver.
Steve Radelet, CID, drew attention to an IMF announcement to use gold sales to finance a portion of debt relief. He said the proposal could signal that the IMF is serious about debt reduction and catalyze other agencies to take action. Collins asked why, if such book transactions can "magically" erase debt, the debt cannot be forgiven without resorting to such "contortions," and asked what the underlying political reasons for such a complex procedure might be.
Edith Gasana, Secretary-General of the Ministry of Finance and Economic Planning of Rwanda, underscored the importance of addressing post-conflict needs, such as rebuilding infrastructure and securing drinking water. She emphasized the different circumstances and needs of each country and said HIPCs must have sufficient resource flows to support growth.
Emmanuel Anusionwu, Strategic Planning Division, African Development Bank, highlighted a recent meeting in Paris with donor countries and said it was evident that donors felt the IMF and World Bank could do more to fund the Cologne Initiative. He said the ADB's budgetary shortfall in 1998 would force it to draw on its capital and noted that this smaller budget would lead to the diversion of resources intended for development needs to cover countries' debt servicing obligations.

On the issue of conditionality, Astere Girukwigomba, Minister of Finance of Burundi, said conditions should depend on the circumstances of each country and not be based on prescriptive lists developed by the IMF and World Bank. He suggested that post-conflict countries in particular require such a huge investment of resources that their situation should not be considered in the context of debt relief.
RealAudio excerpts

Jean Barut, Senior Economist of the Policy Unit of UNDP Africa, identified governance and the social sector as areas to consider for conditionality. Barut said the UN is attempting to coordinate its activities in order to be more effective and avoid duplication and wastage. He said there needs to be increased cooperation among UN agencies, the IMF, World Bank, countries and civil society.
KEYNOTE ADDRESSES
 
Kwesi Botchwey (second from the left) opened the afternoon session and introduced Jeffrey Sachs, Director of CID (far right), who welcomed Bono, musician (far left), and US Congressman Spencer Bachus, Republican-Alabama (second from the right). Sachs highlighted Bachus' efforts within the US House of Representatives to approve debt relief and noted Bono's work as an activist in the global movement to address the debt issue through the Jubilee 2000 campaign.
Sachs highlighted the history of IMF and World Bank strategies to provide debt relief and eradicate poverty and described them as being too little too late. He underscored the need to “call the bluff” of the proposed Cologne Initiative and called for something substantial and honest that addresses HIPCs' real needs. He said unwillingness to forgive debt represented a game between the IMF, World Bank and White House, motivated by the desire to retain control of HIPCs. He called on countries to determine how to bring about debt relief.
RealAudio part 1          RealAudio part 2
Congressman Spencer Bachus said greater public awareness of HIPCs' crippling debt burden and its impact on social spending will provide the catalyst needed to mobilize the necessary political will. He informed participants that the focus of US politicians is usually on domestic problems rather than on the challenges faced in other countries and stated that, although this not a high-profile issue in the US, he will work for full debt forgiveness, as it is "morally the right thing to do."
RealAudio excerpts
Noting all of the fanfare and fireworks planned for the millennium celebration, Bono said the only idea big enough to fill the shoes of this date is that of debt relief. Characterizing the argument for debt relief as economic, moral and spiritual, he noted the widespread support for the Jubilee 2000 movement, including from people of all religions, economists and pop stars. He stated his desire to be a part of restructuring the relationship between the so-called "developing" and "developed" worlds.
RealAudio of the address

Picture of the of the meeting room at the Carnegie Endowment for International Peace in Washington, DC.

DINNER & LETTER FROM POPE JOHN PAUL II

 
In a dinner address on Friday evening, 24 September, Jeffrey Sachs read a letter written by Pope John Paul II the previous day in support of the Jubilee 2000 debt relief campaign. The Pope wrote that the need for debt relief is urgent and in many ways a precondition for the poorest countries to make progress in their fight against poverty, and appealed to all involved, especially the major industrialized nations, to "take a decisive step towards definitively resolving the debt crisis."
CONSIDERATION OF THE ROLE OF NGOS AND HIPC COUNTRIES IN ACHIEVING DEBT RELIEF
Ann Pettifor, Jubilee 2000 Coalition (center), stated that debt relief is a perfectly comprehensible issue that has been obscured and clouded by people who want to keep the public uninformed. Pettifor said the fact that international relations has no equivalent to a domestic bankruptcy law means debt is not written off and people in HIPCs are being burdened by debts incurred many years ago under previous government administrations.
RealAudio excerpts
 
A participant from Liberia noted difficulties in transmitting information on developments in Africa to other parts of the world and emphasized the need for allies to amplify the voice of Africa. He encouraged efforts to strengthen civil society and noted that it is weakest in post-conflict countries. He called for action to focus the world's attention on the proposed meeting of African countries and the G-7
RealAudio excerpts
 
On the issue of HIPCs' role in achieving debt relief, Massro Malocho, Minister of State Planning of Tanzania, asked what actions HIPCs could consider to facilitate further progress and noted the vulnerability of African nations.
In response, Sachs noted that donor countries have accepted the principle that there will be fairly deep debt relief and said it is important to push for further progress by making it clear that what is on offer is not adequate and is not happening fast enough.
Another participant from Tanzania emphasized ownership of the reform process and country determination of priority areas for public expenditure. She called upon Jubilee 2000 to assist with the education of civil society in HIPCs on the magnitude of the debt problem and urged Jubilee 2000 to establish contact with peace activists and women activists in Africa.
CONSIDERATION OF PRINCIPLES ON DEBT CANCELLATION

On Saturday, 25 September, Sachs (on the right) introduced ten basic principles based on the ideas and suggestions discussed at the meeting. He noted that these principles had been kept general to accommodate the diverse ideas expressed and said they should be something both debtors and donors could agree to. These ten basic princinples are outlined at the end of SD's summary of the meeting, available above. The official version will be available from from the Harvard CID web site on HIPCs

. Sachs noted that the complication with ADB debt is that it is money African countries owe to themselves. In response to a question as to how repetition of the same situation in 20 years could be avoided, Bono said the principles being elaborated today would reduce the risks of such an eventuality. In closing, Bono underscored the need to speak with a collective, unified and clear voice.

Related web sites

Jubilee 2000
Harvard CID Policy Paper on Debt Relief: "Implementing Debt Relief for the HIPCs" Electronic Conference on HIPC Debt Relief (at intdev.org)
HIPC Debt Database Web sites of the International Monetary Fund (IMF) and the World Bank

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