Leaders Can't Cancel Nation's Debt
By THE ASSOCIATED PRESS
Filed at 1:12 a.m. ET
DAR ES SALAAM, Tanzania (AP) -- The heads of the World Bank and International Monetary Fund told 12 African leaders it would be impossible to cancel the entire debt of the world's poorest nations, as many have asked.
IMF director Horst Kohler and World Bank President James Wolfensohn said total debt would leave the two institutions cash-strapped and unable to provide the new loans to developing nations, said G.E. Gondwe, director of the IMF's Africa department.
``You would look at the issue of closing the bank,'' Gondwe told reporters Friday at the beginning of a two-day IMF-World Bank summit to discuss how their agencies can help countries alleviate seemingly never-ending poverty.
Callisto Madavo, World Bank vice president for Africa, said the interests of the bank's shareholders ruled out debt cancellation.
``It is the shareholder perspective that is the bottom line,'' he said.
The World Bank, which provides nearly $16 billion in loans each year, is owned by more than 180 member countries.
Rwanda, Uganda, Mozambique and Tanzania, which sent representatives to the 12-nation summit, are among 18 sub-Saharan nations that qualified for partial debt relief last year as long as they met certain conditions set by the lending institutions.
But most African governments say the continent will only develop if the billions of dollars of debt the countries have accumulated in their post-independence years is unconditionally canceled.
Some of the poorest countries in sub-Saharan Africa spend 25 percent of their revenues servicing debt.
African Forum and Network on Debt and Development, a Zimbabwe-based group, said African countries owed the IMF and World Bank $41.6 billion.
The international bankers have said they are using the summit, the penultimate leg of a tour to west and east Africa, to listen and learn from African leaders, many of whom have vociferously criticized the institutions' policies in the past.
Other issues discussed at the summit included how Africa's economic growth could catch up with the rest of the world, as well as how to fight the AIDS epidemic -- perhaps the continent's biggest crisis.
Nearly 24 million Africans are infected with the HIV/AIDS virus.