AFRO-NETS> IMF Says Debt-Relief Initiative For Africa Not Working

[Dr Rana Jawad Asghar <jawad@alumni.washington.edu>]

IMF Says Debt-Relief Initiative For Africa Not Working
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Wednesday, October 22, 2003
 
The International Monetary Fund's initiative for Heavily Indebted 
Poor Countries, launched in 1996 to reduce debt levels in some of 
Africa's poorest countries so they can increase spending on basic 
services such as education and health, is not working, IMF re-
searchers say in a report released Monday.
 
According to Fiscal Sustainability in African HIPC Countries: A 
Policy Dilemma?, which analyzes the economic performance of 12 
African countries, including Mozambique, Tanzania, Ghana, and 
Cameroon, African governments have not been able to raise enough 
money to invest in social programs even after having their debts 
reduced.
 
"As countries made progress in macroeconomic stabilization they 
are now 'allowed' to increase their expenditure to address pov-
erty-reduction needs," the report says. "However, based on our 
framework, this may result in the country's swinging back into 
unsustainable debt levels."
 
The report says that those countries will only be able to achieve 
sustainable economic growth if they raise taxes or receive more 
foreign aid. The latter, however, is likely to cause an increase 
in foreign debt, it says (Martin Plaut, BBC Online, Oct. 21). 
http://www.unwire.org/UNWire/20031022/449_9672.asp
 
Full Report in Adobe PDF format (27 pp. 988 kB) at:
http://www.imf.org/external/pubs/ft/wp/2003/wp03187.pdf
 
 
--
Dr Rana Jawad Asghar
Program Manager Child Survival, Mozambique
Provincial Coordinator Sofala Province, Mozambique
Health Alliance International, Seattle, WA, USA
http://depts.washington.edu/haiuw/
Coordinator South Asian Public Health Forum 
http://www.saphf.org
jawad@alumni.washington.edu 
http://www.DrJawad.com

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