[Here is a foretaste of what we can expect when the financial wizards of the
"New World Order" meet to "reconstruct" devastated Yugoslavia. -- Tom C]
Title: ECONOMY: Donors Plan Central America's 'Transformation'
By Abid Aslam
WASHINGTON, May 24 (IPS) - Donors and creditors are holding talks
this week on Central America's 'reconstruction and transformation'
following the devastation of Hurricane Mitch.
More than 9,000 people were killed and millions were rendered
homeless when the storm struck last October. Entire crops were
wiped out and towns remain without basic services such as water
and electricity. Roads, bridges and ports were destroyed, bringing
commerce to a standstill throughout the region.
The 'Consultative Group for the Reconstruction and
Transformation of Central America' meets in Sweden Tuesday through
Friday. The Washington-based Inter-American Development Bank (IDB)
assembled the group here last December and is leading this week's
sessions.
Donors and creditors aim ''to foster sweeping reforms in the
region to rebuild its economies, strengthen its democracies and
overcome its legacies of poverty and inequality'' in Honduras,
Nicaragua, Guatemala and El Salvador, according to an IDB
statement.
They also are considering aid for Costa Rica, which opened its
borders to thousands of refugees after the hurricane.
In December, the group pledged some 6.2 billion dollars in
humanitarian aid, moratoria on old debt repayments, and new loans.
That is roughly what it would take to restore the countries to
their condition before Mitch struck, according to Miguel Martinez,
the IDB's regional manager.
''If you had an obsolete water-treatment plant before Mitch,
this would be enough to let you replace it with another equally
obsolete one,'' Martinez says. ''What is actually needed is much
higher.''
This week's negotiations are being held behind closed doors as
international and Central American non-governmental organisations
(NGOs) seek to open the 'transformation' process to broader
participation.
That is a daunting task. ''Donors are open to local groups'
input on local priorities and projects but no one's really
interested in letting them set national development priorities,''
says Geoff Thale of the non-governmental Washington Office on
Latin America.
As a result, demands for progressive reforms in land ownership,
domestic credit, and wage policy likely will be given short
shrift, officials and observers warn.
Rather, negotiations are being based on national reconstruction
plans drawn up by each government, says Martinez.
''A number of donors consider the plans too general and short
on substance in the key areas of transparency, participation and
environmental sustainability,'' says Thale.
''Many citizens' groups get to meet with their governments and
say what they think but it all goes down a black hole,'' he adds.
''Donors have heard complaints about this and should call for very
specific mechanisms to ensure that reconstruction plans are
transparent and based on partnership with civil society.''
The Nicaraguan government withheld its plans from the public
until early this month, when it was ready to submit them to donors
and creditors. Honduran groups did not see their government's
proposals until officials at the IDB handed them a copy during
talks here last month.
Although that has donors worried, ''they're going to pump in
more money than Central America has seen in years and more than
they're likely to see in years,'' says Thale. ''Governments and
civil society alike will be stretched'' to manage the influx of
funds and expectations.
While donors are pushing for more grassroots participation,
they have made it clear that there will be no change in the
official vision of development as a means to integrate the
countries into global markets in goods, services, and finance.
''We want to prepare the countries of Central America for the
competitive global economy of the 21st century,'' chief U.S.
delegate and Undersecretary of State Stuart Eizenstat declared at
the consultative group's December meeting.
The US Senate last week approved almost one billion dollars in
relief and reconstruction assistance but the administration of
President Bill Clinton has not been able to offer the region
trading privileges equal to those enjoyed by Mexico under the
North American Free Trade Agreement (NAFTA).
'NAFTA parity' has been a key demand of Central American
leaders and ''needs more attention,'' says IDB President Enrique
Iglesias. ''These countries need special treatment.''
Also high on the agenda are reforestation programmes and other
environmental measures to reduce the countries' vulnerability to
natural disasters, says Robert Kaplan, regional environmental
chief at the IDB.
All of which will cost money. Officials at the International
Monetary Fund (IMF) say they are taking into account the
hurricane's devastating effects in setting public-spending and
other macroeconomic targets with affected governments - but add
that fiscal and monetary discipline must be maintained.
Maximum flexibility will be needed if the countries are to meet
increased social needs and, in the longer run, improve health,
education, unemployment and other 'social safety net' programmes,
says Lionel Nicol, the IDB's chief of social programmes for
Central America. (END/IPS/aa/99)
Origin: ROMAWAS/ECONOMY/
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[c] 1999, InterPress Third World News Agency (IPS)
All rights reserved
===========================================
From: Robert Weissman <[EMAIL PROTECTED]> (by way of Tom Condit
<[EMAIL PROTECTED]>)
Subject: Zimbabwe under IMF (and Paris Club) thumb... (fwd)
[... and yet a little more detail on what we may expect in the future in the
Balkans. -tc]
This note and clip from South African stop-IMF subscriber Patrick Bond:
Dear Zimbabwe-watchers,
I was in Harare and Mutare this time last week, and have begun
raising my hopes that the democratic forces are getting tougher
around economic issues. But the IMF loan issue remains murky; as soon
as Mugabe says anything cheeky the bourgeois press come down on him
very hard, and this leaves his progressive opponents somewhat taken
aback.
Here's more evidence of why they have to straighten their spines.
What is outrageous about this report is that in an interview in the
Financial Gazette on 20/5/99, IMF Africa czar Michael Nowak said, in
the answer to the very first question, that the IMF's new conditions
for the long-awaited US$53 mn loan (upon which another several
hundred million US$ from other "donor"-lender countries depends) are
a) get rid of price controls on staple foods (which Mugabe put on
last year after violent riots following price increases), and b) get
rid of import tariffs on luxury goods imposed late last year (also
last week it was revealed that Zimbabwe's inequality index had risen
dramatically as a result of the IMF-World Bank structural adjustment
programme, to levels higher even than South Africa).
So here we have the IMF demanding that the only two little things
that Mugabe has done recently in the interests of the masses be
repealed. And not only is the IMF withholding a new loan (which,
incidentally, progressive forces like the Zim Union of Journalists
have requested be denied on grounds of Mugabe's human rights
violations, harking back to the anti-apartheid financial sanctions
campaign), but now the Western powers are joining with the claim that
any debt relief Mugabe may get in future hinges upon taking the IMF
loan now... by agreeing to the pro-rich, anti-poor conditions.
It's farcical... and tragic at the same time...
(fyi, Z$38=$US1)
Patrick Bond
[EMAIL PROTECTED]
Zimbabwe Independent, 27/5/99
Prospects of Paris Club debt relief recede
ZIMBABWE, which is saddled with $90 billion in foreign debt, risks
being left out of debt rescheduling concessions by international
donors later this year unless the International Monetary Fund (IMF)
releases the US$53 million balance-of-payments support it has been
sitting on, the Zimbabwe Independent established this week.
The Paris Club, a grouping of Western state banks and private donors
and financiers will be meeting in September to consider debts by poor
Third World countries. European Union officials said Zimbabwe, which
has already started to default on loan repayments, was likely to face
a torrid time at the debt rescheduling talks to be held in London.
"If Zimbabwe can get an agreement with the IMF, it would be easier to
discuss with the Paris Club about debt rescheduling," said French
embassy trade commissioner Alain le Bel.
"This is not a 100% condition but it brings in the confidence. If the
club knows that a country has a good relationship with the IMF, it is
easier to get a positive answer," said Le Bel.
Another European embassy official said time was running out for
Zimbabwe to be considered for debt rescheduling unless the IMF
released the funds soon.
"Zimbabwe's chances of debt reconsideration are going to be very
difficult unless the money is released in the next few weeks. The
Paris Club will definitely take into consideration Zimbabwe's ability
to secure a finance package in the absence of the balance-of-payments
support," he said.
In addition to the $90 billion foreign debt, the government's domestic
debt stood at $42,6 billion at the end of last year.
The total debt of $132,6 billion then accounted for 95% of gross
domestic product.
Zimbabwe has been anxiously awaiting IMF funding since the beginning
of the year, and as patience appears to be evaporating in the ranks of
the local political leadership, President Mugabe has launched scathing
attacks on the Bretton Woods institution, despite concerted attempts
by the Ministry of Finance to court the international financiers.
Harare-based economic analyst Mervin Ellis said technically Zimbabwe
qualified for debt rescheduling as the country's economic status made
it suitable to be classified as a highly indebted poor country (HIPC).
He said countries in the same class included Zambia, Mozambique,
Malawi and Uganda. He said Zimbabwe could however only obtain debt
rescheduling if it returned to the reform track.
"Zimbabwe has to demonstrate that it is going back on the reform road
for it to be considered for debt rescheduling," Ellis said.
