Press Release - Sunday, March 28, 1999

Government action on debts of poorest countries a progressive move
says Halifax Initiative Coalition, and backs Canada to take a stronger position at the World Bank, IMF.
For immediate release 28 March, 1999
Ottawa -- Today's announcement that Canada will cancel 100% of debts owed by the poorest countries in the world is welcomed by the Halifax Initiative, a national coalition of environment, development, social justice and faith groups.
"The government's new position on debt puts Canada out front of other creditor countries in terms of action for debt relief” said Pamela Foster, the coalition's coordinator. “Canada is a small creditor, however, and should use the moral highground gained by its new position to take a much stronger lead at the World Bank and the IMF, where the debt relief efforts are shamefully inadequate."
The actions, announced in Prime Minister Chrétien's speech in Winnipeg, are positive.  The proposal for special consideration for countries hit by natural disasters and economic shocks will provide a good supplement to efforts just beginning for post-conflict countries.
The call for other industrial countries to move their debt cancellation to 100% is a strong move, backed up by the Canadian action on debts to our country which provides substantial credibility. 
Regarding multilateral debt, Canada’s announcements of increased participation in the HIPC Initiative, the lowering of the “sustainability” ratio and the reduction in time-frame indicate that the government recognizes many of the problems identified by NGOs since the HIPC programme was first announced.
Canada should propose, however, a more fundamental reform of the World Bank/IMF programme. The Halifax Initiative has called repeatedly on the International Financial Institutions for a real write-off of debt and to de-link the debt reduction program from the market system restructuring that is now required.
“The international creditor community is cutting of its nose to spite its face through structural adjustment programmes.” says Derek MacCuish of the Social Justice Committee of Montréal and Halifax Initiative member. “Most SAPs reduce spending on health and education. Requiring SAPs as a condition of debt reduction and at the same time demanding increases in health and education spending is an unnecessary viscious circle”.
Canada can use the credibility gained from the progressive program that has been announced, and take the lead in pushing for more from the bigger creditors.
For more information contact:
Pamela Foster, Coalition Coordinator