DEBTINTHE1990s/199DEBT RELIEF MEASURES: A DROP IN THE OCEAN
Since 1994, the Paris Club has been negotiating case-by-case debt
reductions with specific debtor countries selected for being good
pupils of the IMF. The Paris Club has been wholly dishonest in its
promotion of the specifically Africa-oriented segment of this
initiative. It has claimed that up to 80 per cent would be chopped off
total bilateral debt. In fact, the conditions a country must meet in
order to qualify are so Draconian that the reduction amounts to very
little indeed. Uganda was the first country to benefit from such Paris
Club 'largesse': its total foreign debt was reduced by a mere 3 per
cent. One figure puts the lie to all talk of debt reduction: in 19 9 5, less
than 1 per cent of total sub-Saharan African debt was erased by
various debt cancellation and debt relief measures (World Bank,
1997). As for the new IMF-World Bank-Paris Club 1996 initiative,
we can be certain that it will also amount to little or nothing. The
whole operation aims only to make debt servicing a little more
'bearable' for the heavily indebted poor countries, whose total debt is
more than S200 billion. The first round of reductions is expected for
1998, but most will only take effect after the year 2000.