Press Release - Tuesday, April 27, 1999

Halifax Initiative condemns debt relief conditioned on IMF austerity programs
April 27, 1999

Washington - The Halifax Initiative, a Canadian coalition of social justice, development, faith and environment oganizations, is dismayed by the failure of the international financial institutions to remove structural adjustment conditionality as a requirement for implementation of their debt reduction program.
Director Michel Camdessus has recently reaffirmed the IMF's priorities, saying that debt reduction "must be in a way that creates incentives for countries to continue to persevere with adjustment and reform".
"Clearly the IMF still prioritizes a government's ability to pay its debts over its right to choose to invest its resources in poverty reduction and economic development," said Pam Foster, Halifax Initiative Coordinator.
The international financial institutions' program for debt reduction for Heavily Indebted Poor Countries (HIPC) has been severely criticized since it began because of the requirement that eligible countries complete six years of strong economic restructuring under IMF direction. Suggestions for improvement to the program have been limited to talk of reducing the time frame.
The Halifax Initiative objects to IMF conditionality for debt restructuring in two fundamental ways:
- it denies the moral and human imperative for immediate debt relief
- it is being used as a tool to pry open economies to market reforms
The Halifax Initiative calls on the international financial institutions to openly recognize the social and economic cisis that exists as a result of Third World debt, and move quickly to real and effective debt relief, without structural adjustment conditionality.
"We musn't forget that debt reduction should not be an exercise in itself. It is a means by which poor countries arrive at an opportunity to start again. The goal is to meet the needs of the poor as determined by the poor, rather than meeting the accounting needs of creditors," said Stella Arthur of the Canadian Ecumenical Jubilee Initiative.