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UNICEF issues call for debt relief

The UNICEF chief spoke on the eve of the World Bank and International Monetary Fund (IMF) fall meetings, which start Friday in Washington, DC. "The perpetuation of a crippling debt burden in the poor nations is not only international negligence," she said. "It is a morally indefensible act."

"When the lives of millions of children in poor countries could have been saved, and when the future of millions more could have been secured through the judicious use of financial resources, freed from debt, one is left wondering why the resolution of this crisis has been so elusive and why the vision of the global financial community has faltered so visibly."

Ms. Bellamy said that recent years have brought a painful reminder that key development goals, established by the World Summit for Children, will not be met in the absence of effective debt relief and additional resource allocations. "The fact that these global goals and targets are certain to be compromised, by a frightening increase in poverty levels and deepening income inequities, underscores the need for urgent and visionary action now."

UNICEF's leader proposed that the tragedy of the debt crisis be decisively ended "through dramatic debt reduction or, if we continue to fiddle while the developing world burns, outright debt cancellation -- particularly in Africa. In Tanzania, debt servicing now costs nine times what the government spends on health care, and many other poor nations are in the same league."

The 1996 World Bank/IMF Heavily Indebted Poor Countries Initiative (HIPC) was hailed initially as a viable means of debt reduction, Ms. Bellamy explained. "But now it has become a false promise. After lengthy and grueling processes, only six out of 41 countries eligible for HIPC relief have managed to draw benefits, and the benefits themselves have carried a steep price."

Among current barriers within the HIPC initiative, Ms. Bellamy pointed to a six year waiting period and steep export and government revenue quotas that exclude the overwhelming majority of the poorest nations from even qualifying for relief. "The debt sustainability thresholds are unreasonably high," she said. "Present conditions lead to unjustifiable human costs, lost human development and no poverty reduction whatever."

Ms. Bellamy said HIPC needs to be revamped to remedy these glaring difficulties. "UNICEF strongly supports proposals, particularly those of OXFAM, which would enhance HIPC's impact by offering much deeper, quicker relief and transforming it into an effective strategy aimed at poverty reduction. A reconstituted HIPC initiative would encourage an explicit link between debt relief and globally-agreed human development targets."

Africa, home to 33 of the 48 least developed nations, should be first in line for debt cancellation, debt conversion and the revamped HIPC initiative, Ms. Bellamy said. "Here we confront the most distressing situations and the ones most riddled by conflict and political instability. When one considers that radical relief would constitute a small fraction of what the world financial community committed to the Asian financial crisis, virtually overnight, the underlying moral issue is revealed starkly and conclusively."

Ms. Bellamy said the forthcoming World Bank/IMF meetings should consider tackling the debt issue head-on. "Leadership must translate into actions long overdue," she said. "The alternative for the world's poorest children and women is catastrophic."

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