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Street Child in Congo DR

The World Bank announced yesterday that it was postponing the Democratic Republic of Congo’s long-awaited debt cancellation, even though the country has qualified. The postponement has come about at the request of Canada, because Canadian mineral firm First Quantum is in dispute with the government of DRC over mineral rights.

The DRC has been waiting for debt relief for 7 years, while the IMF and World Bank have satisfied themselves that the country has met numerous economic conditions. Politics has come into play before – last year the IMF held up DRC’s progress through the debt relief scheme because the country was proposing to take loans from China. Congo and China agreed to reduce the amount and terms of the loans late last year.

DRC has over $12 billion of foreign debt, much of it based on loans taken out by President Mobutu in the 1970s and 80s. Mobutu’s reign in Congo (then Zaire) was shrouded in corruption, to the point that an IMF representative in Zaire – Edwin Blumenthal – told the fund in 1978 that there was “no (repeat, no) prospect for Zaire’s creditors to get their money back in the foreseeable future”. Nonetheless, loans continued to accumulate, and international campaigners have long called for DRC’s loans to be canceled on the basis of their illegitimate nature.

The debt cancellation is expected to amount to around $8 billion in total. First Quantum is seeking international arbitration after the cancellation of a mining contract. The government of DRC has reviewed numerous mining contracts in recent years, claiming that mining played a key role in the bloody civil war which killed 3 million people in the late 1990s.

Nick Dearden from the UK Jubilee Debt Campaign said:

“It is utterly outrageous that Canada is holding up poverty relief to one of the poorest countries in the world in order to protect its own corporate interests.

“The history of DRC is a woeful tale of exploitation; that a country of such immense natural wealth has become the seventh poorest country in the world is a terrible indictment of our economic system. It’s time we owned up to that history and – on the 50th anniversary of Congo’s independence, finally allowed DRC to control its own resources and destiny.

“The experience of DRC also goes to show that debt relief schemes are still operating in the interests of the ‘creditors’. DRC has spent years shelling out tens of millions of dollars in debt ‘repayments’ while also implementing economic conditions which make its economy more attractive and ‘safe’ for foreign investors. This is not most people’s idea of ‘debt cancellation’.”

Fr. Finn emphasizes the need both to avoid incurring further debt in the re-building and to involve Haitians in the rebuilding of their country. He discusses ways in which the Nuncio, the Catholic Church and Oblates of the USA along with generous donors are working with the Haitian Bishop’s Conference to help Haiti rebuild. Fr. Finn also addresses the need to address the trauma – the psychological scars from the massive earthquake: the loss of families, homes, work, schools, churches…..

Listen to a podcast of the interview…

http://www.radiovaticana.org/en1/Articolo.asp?c=359945

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“Currently, Haiti’s debt to the World Bank, which is interest-free, is about $38 million—about 4% of Haiti’s total external debt. Due to the crisis caused by the earthquake, we are waiving any payments on this debt for the next five years and at the same time we are working to find a way forward to cancel the remaining debt.”

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The Oblate JPIC Office joins other members of the Jubilee USA Network in welcoming the news that, at last, Haiti has reached “completion point” in the Heavily Indebted Poor Countries program.

This step means the cancellation of $1.2 billion in external debt owed by the impoverished island nation to bilateral and multilateral lenders including the IMF, World Bank, and US government. The Boards of the World Bank and IMF met on June 30 to formally approve Haiti’s debt stock cancellation under HIPC and the Multilateral Debt Relief Initiative.

“Today’s action to free Haiti of its unjust and unpayable external debt is a welcome and long overdue step. Debt cancellation will provide desperately needed relief for the people of Haiti,” said Neil Watkins, Executive Director of Jubilee USA Network, an alliance of religious groups, development agencies, and human rights groups that has campaigned for Haiti’s debt cancellation for more than five years.

Haiti suffered through a serious of humanitarian crises in 2008 and endured the devastating impact of four hurricanes. Sharp increases in food and energy prices have also led to an escalation of hunger among the poorest sectors of the population. And Haiti now faces the severe and negative effects of the recent downtown in the global economy.

Through this time of crisis for the island nation, a coalition of political leaders and organizations has pressed for the immediate cancellation of Haiti’s debt. US organizations including Jubilee USA Network, Institute for Justice and Democracy in Haiti, TransAfrica Forum, the Quixote Center, Center for Economic and Policy Research, the Episcopal Church, and Partners in Health worked together to build the political will in the US for Haiti’s debt cancellation, in partnership with colleagues in Haiti, throughout the Americas, across Europe and around the world.

In the US, a bi-partisan coalition of 72 Members of Congress signed a letter to World Bank President Robert Zoellick in February 2009 urging immediate debt cancellation for Haiti. In April 2009, the Obama Administration announced it would cover up to $20 million in debt service payments from Haiti until Haiti reached completion point.

Haiti – the most impoverished nation in the Hemisphere – faced a long struggle to achieve debt cancellation, facing repeated delays under the World Bank/IMF Heavily Indebted Poor Countries (HIPC) Initiative. Haiti’s completion point date was repeatedly pushed back by the World Bank. Jubilee USA and its partners have long argued that much of Haiti’s debt should be considered odious, dating back to loans contracted and often stolen by the brutal Duvalier dictatorships.

For more information, read the World Bank press release on Haiti’s completion point.

A bipartisan group of 72 US Representatives called on World Bank President Robert Zoellick late yesterday to immediately suspend all scheduled debt repayments from Haiti and grant complete debt cancellation to the impoverished nation. Haiti currently sends $1.6 million to the World Bank every month while thousands of Haitians starve and the nation struggles to fill a severe budget gap that threatens the struggling democracy’s stability.

The letter to President Zoellick was circulated by US Representative Maxine Waters (D-CA) as well as Representatives Barney Frank (D-MA) and Spencer Bachus (R-AL), Chairman and Ranking Member of the House Financial Services Committee. The Representatives express deep concern about “the urgent humanitarian needs of the people of Haiti and the difficulties Haiti has faced in qualifying for the cancellation of its debts.” “We understand that Haiti is scheduled to send approximately $20 million to the World Bank in 2009,” the letter reads, “Clearly, this money would be better spent on basic infrastructure and poverty reduction for the Haitian people.” Signers include 72 US Representatives from across the political spectrum, including Representative Ileana Ros-Lehtinen (R-FL), Ranking Member of the House Foreign Affairs Committee and Donald Payne (D-NJ), Chairman of the House Subcommittee on Africa and Global Health, and House Foreign Affairs Committee Chairman Howard Berman (D-CA).

Download a PDF of the letter from Members of Congress to World Bank President Zoellick

“After enduring four tropical storms last summer on top of an escalating food crisis, Haiti must now contend with the fallout of the global economic meltdown. It is outrageous to ask Haiti to wait one minute longer for debt relief under these circumstances,” said Neil Watkins, Executive Director of the Jubilee USA Network, a coalition of faith-based, development, human rights and community organizations working for debt relief for all impoverished countries. Jubilee members encouraged their Representatives to sign on to the letter.

“If Robert Zoellick wants to give Haiti a chance, he should start by unconditionally canceling Haiti’s debt,” said Brian Concannon of the Institute for Justice & Democracy in Haiti. “Haiti’s debt is not only unconscionable, it is unjust- today’s Haitian citizens are literally starving to pay back debts that the Banks made to yesterday’s Haitian dictators.”

Haiti will be eligible for substantial debt relief upon completion of the IMF and World Bank’s Heavily Indebted Poor Country (HIPC) program. The Banks improperly left Haiti out of the original HIPC in 1996 for political reasons. The country was accepted into HIPC in 2006, but Haiti’s efforts to catch up have been hindered by economic policy conditions imposed by the IMF and a string of natural disasters, economic shocks, and political unrest.

Earlier this month Haitian President René Préval appealed to Secretary of State Hillary Clinton for immediate financial assistance, describing a $100 million budget gap that he said could throw Haiti into anarchy. Haiti can expect to be severely and negatively affected by the recent downturn in the economy of the United States. Not only does the United States serve as a valuable market for Haiti’s exports, Haiti is also heavily dependent on remittances from Haitians living in the United States, which dwarf international assistance.

The Oblates of Mary Immaculate are a founding member of Jubilee USA. Jubilee USA Network is an alliance of 75 religious denominations, faith communities, development agencies, human and worker rights organizations, and environmental groups building the political will for poor country debt cancellation and more responsible international finance to fight global poverty.

WASHINGTON, DC and LONDON — International debt campaigners today called on rich country finance ministers meeting at the World Bank and International Monetary Fund annual meetings in Washington DC to end the outrageous delays to debt relief for Haiti and Liberia – two of the poorest countries in the world.

They are calling on rich country governments to act with the same urgency in tackling the food crisis and global poverty as they have with the banking crisis in recent weeks. Campaigners point out that the ‘emergency bailout’ for big banks has been fast-tracked, while two countries on the receiving end of the impacts of the food and financial crises – Haiti and Liberia – are facing new delays to debt relief that has been long promised.

A new report on the Heavily Indebted Poor Countries debt relief initiative produced for the annual meetings has announced that the likely date for Haiti to receive debt relief has been put back six months from ‘last quarter 2008′ to ‘first half 2009′ [1]. Meanwhile Liberia, which spent two years, while recovering from civil war, waiting for donors to agree how to clear its arrears so it could even ‘qualify’ for debt relief, is being told not to expect any until 2010.

Neil Watkins, National Coordinator of Jubilee USA Network, said: “After four hurricanes in a month and an escalating food crisis it is outrageous that Haiti is being told it must wait six more months for debt relief. This is like Hank Paulson telling Wall Street he will get back to them in the New Year.”

“Haiti has been dealing with multiple crises in recent months. As a result it is still spending $1 million a week on debt service while its people starve. As we’ve seen this month, when Wall Street bankers are affected, they get fast tracked for debt relief. But the people of Haiti don’t seem to matter very much in Washington. Haiti needs the immediate debt cancellation of its illegitimate debt that it has long been promised now,” said Watkins.

Nick Dearden, Director of Jubilee Debt Campaign UK, said: “Liberia has a large, illegitimate commercial debt burden and both the government and its creditors are ready to make a deal via the Debt Reduction Facility, but are being held up by delays in the World Bank bureaucracy. The people working on the DRF should stop crisis-watching on CNN and get on with releasing funds that will save people’s lives.”

“Liberia is on the front line of the global food crisis, and yet it is still being told it must wait until 2010 for debt relief to be delivered. In such a rapidly-changing world, the Heavily Indebted Poor Countries initiative is increasingly looking like an outdated process. It’s time for an urgent injection of political will to get some liquidity back into debt cancellation, and bail out the world’s poor from a mess they had no part in creating,” said Dearden.

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[1] Haiti’s likely completion date for the Heavily Indebted Poor Countries (HIPC) initiative, the World Bank and International Monetary Fund’s debt cancellation scheme, has been put back from ‘last quarter 2008′ to ‘first half 2009′ – a delay of up to six months. See Heavily Indebted Poor Countries Initiative: Status of Implementation report, World Bank and International Monetary Fund, 12 September 2008.

For more information, see Jubilee USA and Jubilee Debt Campaign, UK

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