Canadian organizations and individuals today called for an immediate stop on debt payments coming out of Nicaragua and Honduras.

4 November 1998 - In letters to the heads of the International Monetary Fund (IMF), the World Bank, the Inter-American Development Bank (IDB), Finance Minister Paul Martin and External Affairs Minster Lloyd Axworthy, they asked that a freeze on debt payments be enacted for 90 days, in light of the disaster affecting the people in Central America.

Both Nicaragua and Honduras are considered heavily indebted poor countries by the international financial institutions, and pay out millions of dollars each month to outside creditors. Much of this money goes to the IMF, World Bank, and IDB. The two countries sent out US$888 million dollars last year - or $2.43 million per day.

In September 1998,

Factsheet
Structural adjustment programmes (SAPs), were originally designed to stabilize developing country economies. Instead, they have imposed harsh economic measures which deepen poverty, undermine food security and self-reliance and lead to unsustainable resource exploitation, massive environmental destruction, and population dislocation and displacement. Given the mounting evidence, Northern countries must reconsider the appropriateness of using their lending and aid programmes to support the structural adjustment regimes of the World Bank and IMF.

What are SAPs?

Introduction
The International Monetary Fund and the World Bank have proposed a framework of action to assist in resolving the debt problems of heavily indebted poor countries. In the current formulation of this framework, replenishment of the Enhanced Structural Adjustment Facility (ESAF) has been presented as the centrepiece of the IMF contribution.

The IMF role was described in the brief prepared by IMF and World Bank staff for the April 23, 1996 meeting of the Development Committee:

"The IMF would also be expected to take action that would reduce the present value of its claims on a country, consistent with broad and equitable participation in the framework of this initiative. Various possibilities involving support under the ESAF which might achieve this objective are currently under examination."

This information was provided to the Halifax Initiative Coalition (the Social Justice Committee is a