At Arm's Length: 10.04.04
For the debtor nations of Africa, more welcome words could not have been spoken. During the opening meeting of the International Monetary Fund and World Bank on Thursday of last week, the weight of the debt carried by these third world countries was high on the agenda.
A proposal by Britain's Gordon Brown, the chancellor of exchequer opened the door for discussion on how to relieve the high cost of maintaining what these countries can ill-afford to repay. It has been widely discussed that $15 billion that is owed on the interest alone has come with sacrifices in quality of life for those country's citizens. Previous statements made by the organization suggested that such debt relief would come at the expense of other borrowing nations and plans for relief were not possible. Now there seems as if there is hope for a change in policy.
One of the proposed methods suggested by the British called for a re-evaluation of gold reserves held by the bank. Such repricing, which has been done before would wipe almost $32 billion from the current accounts of these countries and in one stroke, eliminate the debt of 38 of the poorest borrowers.
The plan was embraced by the U.S. as Treasury Secretary John Snow planned to offer 100% debt relief proposal at the next G7 meetings. Although these comments were positively received, only Britain so far has actually offered a payment of 10% to the bank for such relief. Before such a plan can be adopted however, France and Germany must also agree.
Perhaps Mr. Snow realizes the economic impact that these debt free nations will have on the global economy. Perhaps he just wants to make sure that the World Bank has enough in assests available when this country achieves third world status with its own overwhelming debt burden.
The previous week's articles.
NEW!
Our Glossaries One dollar off for a limited time!
COLUMN REQUEST | AT ARM'S LENGTH ARCHIVE | WHO WE ARE | CONTACT US | LEARNING CENTER
COPYRIGHT 2002 - 2004 THE BLUE MONEY REPORT - ALL RIGHTS RESERVED
