BOLIVIA: IMF CANCELS US$251 MILLION IN BOLIVIAN DEBT AS PART OF 19-COUNTRY PACKAGE.
| Cargo | International Monetary Fund |
The International Monetary Fund (IMF) announced on Dec. 21 that it would be eliminating 100% of the institution's debts owed by 19 of the world's poorest countries, a list that in Latin America included Bolivia, Honduras, Nicaragua, and Guyana. The debt cancellation resulted in a US$251 million gain for the Bolivian government and US$3.3 billion in all for the 19 nations of the Heavily Indebted Poor Countries (HIPC) initiative.
Announcement coincides with Evo Morales victory
The announcement coincided with the electoral victory of Evo Morales in his campaign for the presidency of Bolivia (see NotiSur, 2006-01-06) and may be a small help for his effort to lift up the Bolivian people, an overwhelming majority of whom live in poverty. More important, however, will be the economic support he is attempting to garner from foreign countries during a whirlwind global tour prior to his inauguration (see NotiCen, 2006-01-12). The method by which Bolivia capitalizes on its immense natural-gas reserves will also be one of the major factors in the country's future.
"This is a historic moment that will permit these countries to increase spending in priority areas to reduce poverty," said IMF managing director Rodrigo Rato in a written statement. He said other countries were also on the way to entering the program, "and, to the extent that they continue this progress, which I hope will be quickly, we are disposed to help them."
IMF spokesman Thomas Dawson would not comment on whether Latin American countries other than the four listed were being considered for debt forgiveness.
The other recipients of the cancellation were mostly African countries: Benin, Burkina Faso, Ethiopia, Ghana, Madagascar, Mali, Mozambique, Niger, Rwanda, Senegal, Tanzania, Uganda, Zambia, and, in Asia, Cambodia, and Tajikistan. In its Dec. 21 announcement, the IMF said Mauritania would be included on the list "in a matter of weeks."
The IMF's Multilateral Debt Relief Initiative will be funded in part by profits from 1999 off-market gold sales, as well as by existing contributions from 43 countries to the IMF's lending facility for poor countries, according to Reuters. The IMF also said it had commitments from donors to fill a US$285 million gap in the debt-relief package.
The Latin American countries are among 19 countries eligible for the program because they completed requirements under the IMF's HIPC initiative. The countries eligible for debt relief will have 100% of debts...
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