March 24, 2006

February 28, 2006

The Honourable James Flaherty
Minister of Finance
Department of Finance Canada
140 O’Connor Street
Ottawa, ON K1A 0G5

Dear Minister Flaherty:

On behalf of the Halifax Initiative Coalition, I would like to congratulate you on your recent appointment as Minister of Finance. Over the past ten years, the Halifax Initiative has developed a good working relationship with the Department of Finance, and in the coming years we hope to strengthen this relationship.

Every month, the Halifax Initiative produces a two-page monthly update on various issues related to international finance. This month:

• IMF Board of Directors approve debt cancellation for 19 countries
• Guatemalans meet with World Bank President Wolfowitz about mining
• World Bank gets creative in accounting for its renewable energy investments
• New discussion papers
• Upcoming Meetings
• JUST THE FACTS - What are the IFC Safeguard Policies?
  

  SELECTED ISSUES on INTERNATIONAL FINANCIAL INSTITUTIONS

   

  ►IMF Board of Directors approve debt cancellation for 19 countries
  The IMF announced on December 21st that it would cancel the debts owed to it by nineteen highly indebted countries, early in 2006. The G8 last June had promised full debt cancellation for countries that had reached the completion point of the World Bank/IMF Heavily Indebted Poor Country Debt Initiative. (See Issue Updates 7,8 and 9, July, August and September 2005, respectively, for more info). Over the past two weeks, the IMF had threatened to delay implementation of the debt write-off for six countries on the pretext that their economic policies are "off-track" in relation to IMF conditions. Only Mauritania will have its debt cancellation delayed. It thus appears that the IMF has backed down from its threat to delay debt relief to the other countries in the face of a last-minute but intensive international campaign led by campaigners in favour of full and unconditional debt cancellation. The 19 countries that qualify as a result of today's assessment include: Benin, Bolivia, Burkina Faso, Cambodia, Ethiopia, Ghana, Guyana, Honduras, Madagascar, Mali, Mozambique, Nicaragua, Niger, Rwanda, Senegal, Tajikistan, Tanzania, Uganda and Zambia. The IMF added non-HIPC countries, Cambodia and Tajikistan, because of their low per capita income.

   

  • IMF Press Release: http://www.imf.org/external/np/sec/pr/2005/pr05286.htm
  • Letter to Finance Minister Goodale from the Halifax Initiative Coalition: http://www.halifaxinitiative.org/index.php/Home/653

   

  ►Guatemalans meet with World Bank President Wolfowitz about mining

  Two delegates from Guatemala traveled to Washington D.C. to voice their concerns and demands regarding the Marlin mine directly to World Bank President Wolfowitz on December 9th. Glamis Gold, a US-based, Canadian registered mining company owns Marlin mine, which was built with the help of a World Bank loan. Mario Tema, an indigenous leader from Sipacapa, and Magali Rey Rosa, a representative of the Guatemalan environmental NGO, Colectivo Madre Selva formed the delegation. Mr. Tema presented Mr. Wolfowitz with a statement from numerous Sipakapense leaders, outlining their demands regarding operation of the Marlin mine. Mr. Tema also presented President Wolfowitz with a statement from the community of San Miguel Ixtahuacán.  The delegate from San Miguel was unable to participate in the meeting as he was denied a US visa. Both Sipacapa and San Miguel are affected by the Marlin mine.

  Additional Information

  • Halifax Initiative case study on the Marlin mine http://hi2.openconcept.ca/updir/Glamis-Final.pdf 
  • Halifax Initiative and Friends of the Earth Canada joint statement on Marlin mine:  http://www.foecanada.org/index.php?option=content&task=view&id=228&Itemid=113 

  ►World Bank gets creative in accounting for its renewable energy investments

  The World Bank revised its own figures upwards in regards to investments in renewables and energy efficiency (RE & EE), in time for the inter-governmental meetings on climate change in Montreal that ended early this month. The Bank’s latest report shows that 60 per cent of its support for renewable energy and energy efficiency (RE & EE) is in fact for big hydro projects.

  The World Bank claims in a November 30 press release that it more than doubled its investment in RE & EE from fiscal year 2004 to FY 2005. The press release compares 2005 lending with its commitment to increase RE & EE support by an average of 20 per cent per year from 2005 to 2009. The Bank made this commitment at the June 2004 international conference on renewable energy held in Bonn, Germany.

  The Bonn target excluded large hydro (greater than 10MW) and loans and guarantees from the Bank’s private sector and insurance arms (IFC and MIGA).

  Additional Information:

  • Friends of the Earth USA, Power Failure: How the World Bank is Failing to Adequately Finance Renewable Energy for Development: http://www.foe.org/camps/intl/institutions/renewableenergyreport10242005.pdf
  • International Rivers Network, Friends of the Earth International release: http://www.irn.org/programs/greenhouse/index.php?id=051205leap.html

  *     *     *

   New discussion papers (HI Members or Associates, government) on IFI issues:

  • Power Failure: How the World Bank is Failing to Adequately Finance Renewable Energy for Development - http://www.foe.org/camps/intl/institutions/renewableenergyreport10242005.pdf
  • Comments submitted by stakeholders on the revised IFC Safeguard Policies http://www.ifc.org/ifcext/policyreview.nsf/AttachmentsByTitle/November+25+Stakeholder+Comments/$FILE/60+day+Comments+All.pdf

   Upcoming IFI-related conferences or meetings

  • World Social Forum, end of January 2006 in Bamako, Mali, Caracas, Venezuela and Karachi, Pakistan.

  JUST THE FACTS – Safeguard Policies The policies were developed at the World Bank Group, largely due to donor and NGO pressure to reduce the social and environmental consequences of World Bank lending. The objective of these policies is to prevent and mitigate undue harm to people and their environment. These policies provide guidelines for bank and borrower staffs in the identification, preparation, and implementation of programs and projects.  World Bank Group Safeguard Policies include policies on environmental assessment, indigenous peoples, cultural property, forests, pest management and involuntary resettlement.  The government lending arms of the World Bank Group and the private sector lending arm have different standards and different accountability mechanisms.   For more information see: http://www.ciel.org/Ifi/IFIs_Social_Environmental.html

   

   
  Additional Information

   

December 15, 2005

Stale Government Response to SCFAIT Mining and Human Rights Recommendations
"Balderdash!" summed up New Democratic Party MP Ed Broadbent's thoughts on the government's response to a set of recommendations made by the Standing Committee on Foreign Affairs and International Trade (SCFAIT) on the issue of Mining and Human Rights. Although the Government's response, released October 18th, acknowledged a need for action to address the often devastating impacts of the mining sector, it dismissed the majority of the Committee's recommendations. Citing a number of challenges that prevent more concrete action, the government focused on purely voluntary measures.

G8 Debt Proposal gains support at World Bank/IMF Annual Meetings
The World Bank and International Monetary Fund (IMF) have advanced a plan for cancelling debts owed by 18 low-income countries, at their September 23-25, 2005 annual meetings. The plan, first proposed by the Group of 7 (G7) Finance Ministers last June and then ratified by G8 (G7 plus Russia) heads of government at their July Summit in Gleneagles, Scotland, applies only to those countries that have graduated from the Heavily Indebted Poor Countries (HIPC) Initiative (See Issue Updates July and August 2005, respectively, for more). It would cover 100 % of their debts owed to the World Bank's International Development Association (IDA), the IMF and the African Development Bank's African Development Fund (AfDF).

World Bank, International Monetary Fund write off some debts

January 3, 2006

Mr. John Mihevc
Chair
Halifax Initiative Coalition
Suite 104, 153 Chapel Street
Ottawa, Ontario, K1N 1H5

Dear Mr. Mihevc:

Thank you for your letter of September 12, 2005 regarding Canada's contributions to the global fight against poverty. I regret the delay of my reply.

The United Nations Millennium +5 Summit and the annual meetings of the World Bank and International Monetary Fund (IMF) were extremely important opportunities to secure commitments to advance international efforts toward poverty alleviation. Canada was very active in the lead-up to these events and Canadian officials worked hard to ensure that there was no erosion of existing international commitments in the United Nations Summit Outcome document. In this, I believe, we were largely successful.

For pdf click here.

September 12, 2005

A leaked internal audit assessing the World Bank's involvement in a controversial Canadian gold mine in Guatemala has