"Forgive and Forget" Won't Fix Third World Debt

Worldwatch Institute 17apr01

When the World Bank and International Monetary Fund spring meetings open in Washington, D.C., on April 29, 2001, officials will point proudly to the roughly $20 billion in debt that they have promised to cancel since their heavily-protested meetings last year. These promises take a step in the right direction, concludes a new report from the Worldwatch Institute, a Washington-based research organization. But even full cancellation would only be a Band-Aid for a broken system.

"Before officials congratulate themselves they need to pay attention to a wider problem-how to prevent this debt crisis from happening again," said David Malin Roodman, author of Still Waiting for the Jubilee: Pragmatic Solutions for the Third World Debt Crisis. "Hundreds of billions of dollars in unpayable loans still need to be written off. And creditors have done little to change the lending practices that created the debt problem in the first place."

Roodman calls for major reforms to prevent poorer countries from sinking back into debt. On the borrower side, these include making governments less corrupt and more accountable. On the creditor side, the reforms include:

• Giving poor countries greater access to foreign exchange earnings by lowering trade barriers in rich countries to allow more imports from the poorest ones.
• Basing government contributions to the IMF and development banks on how well these lenders reform management culture to reward employees for results instead of loan-pushing.
• Ensuring that aid agencies, from the Japan International Cooperation Agency to the World Bank, lend less and grant more to the poorest nations.

In preparation for the World Bank/IMF meetings, and to discuss how the Third World debt crisis can be ended once and for all, the Worldwatch Institute has invited experts from the World Bank, Drop the Debt, Environmental Defense, and the U.S. Congress, as well as the Ambassador of Uganda, for a multi-sided debate on this controversial issue that affects hundreds of millions of people.

WHO: David Roodman, Senior Researcher, Worldwatch Institute; Adrian Lovett, Director of Drop the Debt; Axel van Trotsenburg, Director of the HIPC Implementation Unit, World Bank; and Bruce Rich, Director of the International Program, Environmental Defense. Invitations have also been extended to the Ambassador of Uganda, and Congresswoman Maxine Waters (D-CA).

WHAT: Debate: "What Will Bring the Third World Debt Crisis to a Lasting End?" based on Worldwatch Paper 155: Still Waiting for the Jubilee: Pragmatic Solutions for the Third World Debt Crisis

WHERE: Worldwatch Institute, 1776 Massachusetts Ave. NW, 8th Floor, Washington DC

WHEN: Thursday, April 26, 2001, 11:30-2:00 EDT (lunch 11:30-12:30; debate & discussion 12:30-2:00)

EMBARGO: Thursday, April 26, 2001 2:00 PM EDT

CONTACT: Leanne Mitchell (202) 452-1992 ext. 527 RSVP: Niki Clark (202) 452-1992 Ext.517

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