WorldNews.com, Mon 9 Apr 2001 World Bank News Roundup.
Several poor countries risk building up unsustainable debt levels despite receiving debt relief under the high-profile international initiative, according to an analysis prepared by the World Bank, the Financial Times (p.4) reports.
A report prepared for the governing boards of the World Bank and IMF suggests that some countries - including Malawi and Niger - may not achieve the target debt-to-export ratios which the initiative is intended to deliver.
The problem has arisen as a result of falls in the terms of trade - the ratio of export to import prices - for these countries. Niger, for example, has been hit by rising oil import costs and recent falls in the world price of uranium, one of its main exports. The amount of debt relief on offer was calculated using debt-to-export ratios over the past three years, when Niger's export earnings were temporarily boosted by a jump in uranium prices.
The debt relief process is designed to reduce the net present value of each country's external debt to 150 per cent of exports. Critics argue that the amount on offer should be reassessed when the country qualifies for full relief, rather than being fixed when it enters the initial stage of the process.
The debt sustainability report is being discussed by the governing boards of the two institutions. Discussions so far have yet to provide a solution, and the issue seems likely to be passed on to finance and development ministers at the IMF/World Bank spring meetings in Washington in three weeks.
http://www.worldnews.com/?t=print.txt&action=display&article=6616102
_________________________________________________________ Do You Yahoo!? Get your free @yahoo.com address at http://mail.yahoo.com