Source:
BolPress
Wed Jul 06 2005
Weaknesses were unveiled regarding the cancellation of obligations undertaken with the IMF and the World Bank, approved some weeks ago by the Group of the world’s Eight richest countries in favour of a group of noticeably underdeveloped nations, among them Bolivia. Debt relief is conditioned on the implementation of neoliberal-type structural reforms, which imply increased indebtedness.
The recent partial external debt cancellation approved by rich countries in favour of some nations like for example Bolivia is conditioned on an increased indebtedness and submission, as warned by two specialised institutions. Warnings were made by "Fundación Jubileo", the active arm of the Catholic Church, that calls for total cancellation, and the non-governmental organization "Acción contra la Pobreza".
Both analysis unveiled the weaknesses regarding the cancellation of obligations undertaken with the International Monetary Fund (IMF) and the World Bank, which was approved some weeks ago by the Group of the world’s Eight richest countries (G8) in favour of a group of noticeably underdeveloped nations, such as Bolivia.
According to "Fundación Jubileo", the G8 decision will only serve to reproduce a vicious cycle of increased indebtedness, since it reproduces the former debt reduction plan applied to highly indebted poor countries (HIPC).
Such programme was applied to Bolivia some moths ago and reduced its debt from U$S 4.41 billion to U$S 1.91 billion; however, Bolivia owes now 4.50 billion, recalled the above-mentioned institution.
According to "Fundación Jubileo", this is due to the fact that creditor countries condition debt relief to the implementation of structural reforms (of a neoliberal type), which imply increased indebtedness.
The new debt cancellation will imply a U$S 44 million reduction in external debt service, which amounts annually to U$S 277 million, and according to "Fundación Jubileo" and "Acción contra la Pobreza", it will not lighten the debt burden.
These institutions proposed that the cancellation should be total, without conditions and with full respect for Bolivia’s sovereign decisions.
It should also be accompanied by international cooperation to redress the damages caused by neoliberal policies and ensure advances in the fight against poverty aiming at the fulfilment of the Millennium Goals, which comprise for example the reduction of extreme poverty from 37% to 15% by the year 2015.
At the same time, "Fundación Jubileo" pointed out that there should be a change in international trade rules given the fact that the current rules hold back small production, industry and subordinate countries such as Bolivia to foreign interests.
On the other hand, "Acción contra la Pobreza" claimed that the relief announced by the G8 is not subjected to the continuity of the so-called structural reforms, that is to say, to maintaining the conflictive neoliberal economic policy which has been in force in Bolivia since 1985.
Such policy, recalls the above institution, only reduced the state income and increased expenditure, thus generating exclusion and inequality.
The announced debt cancellation forces Bolivia and the other supposedly benefited countries to ensure “legal security” for transnational companies, eliminate barriers for foreign investment and guarantee macroeconomic stability and economic opening-up under neoliberal terms.
The warning made by "Acción contra la Pobreza" coincided with the arrival of an IMF mission that will be revising the fulfilment of the economic commitments undertaken by Bolivia with this institution.
The reduction of debt should not force Bolivia to sign a Free Trade Agreement (FTA) with the United States or to join the Free Trade Area of the Americas (FTAA), points out the non-governmental organization.
It also states that rich countries also want Bolivia to maintain natural resources in private hands - mainly transnational companies - and to insist, in general, on a policy that generates economic inequality, social conflicts and environmental damage.
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