Press Release - Wednesday, November 25, 1998

Bail out the people of Central America, not the banks, says NGO coalition
Ottawa (November 25, 1998) -- Nicaragua and Honduras are being forced to continue debt payments of millions of dollars to foreign creditors, following the most devastating hurricane in 200 years. A coalition of Canadian human rights, environment and development organizations is demanding that International Financial Institutions (IFIs) cancel their debts immediately and revisit their policies, which exacerbated the disaster.
"I find it hard to believe that the World Bank and Inter-American Development Bank, which are mandated to promote human development and poverty reduction, can put all their energy into ensuring that debt payments continue to be paid, literally come hell or high water," commented Derek MacCuish of the Halifax Initiative, a group of a dozen NGOs. "The Canadian Executive Directors of the IFIs must ensure that money going in to these countries for relief does not come right back out."
Thousands died in Central America in the wake of Hurricane Mitch. Poor people were made more vulnerable to the disaster because particular economic policies required by the World Bank and the IMF marginalize the environment and hinder governments' abilities to respond to the needs of the people, in part due to enormous debt burdens.
Before Hurricane Mitch struck, both countries were already classified as "heavily indebted poor countries" by the IFIs. Last year, these two countries were asked to pay US $2.43 million a day in debt payments. Canada should be recognized for lessening this load temporarily by placing a moratorium on Honduras' debt payments to Canada and for contributing $100 million for reconstruction over the next four years. However, it is time for the Canadian Executive Directors of the Inter-American Development Bank, International Monetary Fund and the World Bank to take a strong stand on debt relief.
Instead of developing a credible program to address the problem, the Inter-American Development Bank, the World Bank and the International Monetary Fund are planning a new "trust fund" to ensure that debt payments would continue to be made on behalf of Nicaragua and Honduras. Countries like Canada will be asked to contribute.
"Canadians would not like their tax money going to bail out the banks, instead of helping these countries start anew,"said Marian Dewar, chairperson of Oxfam Canada. "The IFIs are continuing to bank on disaster. Their policies are devastating the poor."
For more information, please contact:
Pamela Foster, Coalition Coordinator
tel: (613) 789-4447 fax: (613) 241-2292,