Government proposal falls short as Canada concedes leadership on Third World debt relief
The proposal put forward by Finance Minister Goodale this week concedes leadership on Third World debt relief to the UK. The Social Justice Committee welcomes the call by the Canadian government for 100 per cent debt relief, but the Canadian proposal is fundamentally identical to the flawed one the UK has been promoting for months, and in some aspects is not as good.
Finance officials respond to the comparison to the UK proposal by saying that "this is not a beauty contest," but the truth is that wealthy countries, pushed by citizens appalled at the notion of demanding debt payments from impoverished countries, have been engaged in a form of competition on debt relief since the mid–1990s.
The UK plan includes the use of IMF gold revaluation to pay for debt relief; the Canadian proposal is reluctant. The UK plan would provide immediate assistance to Albania and Armenia. The Canadian plan omits them, and the UK plan anticipates the participation of more countries than does Canada's.
Both UK and Canadian proposals are restricted to countries that have completed the IMF/World Bank program of economic restructuring, and have a structural adjustment loan program in place, neither of which reflect social needs associated with poverty.
The Canadian plan refers to "immediate" action, but would affect only 4% of the debts of the Third World to the World Bank, IMF and African Development Bank. A moratorium on 100% of these debts would be much more effective for immediate action, and is the approach the government took on debts to Canada, but officials accept the argument made by the IMF and World Bank that this would damage their financial viability. "The Canadian government seems to prefer a protracted, inadequate debt relief program to a leaner World Bank, which continues to avoid its responsibility as the main creditor to the Third World," says Derek MacCuish, the Coordinator of the Social Justice Committee.
Third World countries would be better served by a complete and immediate moratorium on debt payments. Current proposals are bogged down in details and minimized in their effectiveness as rich countries debate the details of how to pay for it.
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Info: Derek MacCuish 514–933–6797