The Associated Press
April 27, 2001, Friday, BC cycle
SECTION: Business News
BYLINE: By THERESA AGOVINO, AP Business Writer
DATELINE: NEW YORK
Activists call for debt relief for poor countries to fight AIDS
The debt owed by the world's poorest countries is a major barrier to
fighting the AIDS pandemic and should be canceled immediately,
activists urged Monday.
The plea by such people as economist Jeffrey
Sachs and rock star Bono, came as the World Bank and The International Monetary
Fund, which hold the majority of the debt, held their spring meeting in
Washington this weekend.
The international lending organizations have a
joint program to reduce debt but have so far declined to wipe the slates clean.
"It is morally reprehensible for the developed world to continue to
demand repayment when we have a crisis on the continent of Africa," said
Njongonkulu Ndugane, Archbishop of Capetown, South Africa. "One hundred percent
cancellation is nonnegotiable."
Sub-Saharan African countries spend
$13.3 billion on debt repayment each year but need the
$15 billion to stop the spread of HIV/AIDS, according to the
Global AIDS Alliance.
Zambia, for example, has an annual debt service of
$174 million with $90 million of that going to
the World Bank and IMF. The country's health budget is $76
million.
This week in Abuja, Nigeria, U.N. Secretary-General Kofi Annan
called on the developed world to raise $7 billion to
$10 billion to create a trust fund to battle the AIDS epidemic.
Sachs, an economist at Harvard University, said that
canceling debt will give countries even more money to fight the disease that is
ravishing the continent. AIDS has killed about 22 million people around the
world, including 17 million in sub-Saharan Africa.
Two separate
initiatives were introduced in the Congress this week which call on the IMF and
the World Bank to eliminate debt. One bill introduced by Reps. Maxine Waters,
D-Calif., and Spencer Bachus, R-Ala. calls for 100 percent debt relief for the
world's poorest countries. The bill introduced by Barbara Lee, a California
Democrat, calls for debt relief for countries heavily affected by HIV/AIDS.
Bono, the lead singer of the Irish rock band U2, said that part of the
problem is that Americans don't understand how the debt is devastating the
poorest countries, and plans to try to raise awareness to create political
pressure. "We have failed to get across the seriousness so far. Social response
is not on the scale of the problem," Bono said.
The World Bank have a
program called the HIPC Initiative to stem debt. To qualify countries must meet
a variety of economic standards. While the program has relieved some debt,
activists say it take years to see results.
According to a World Bank
report the 22 countries receiving some relief have seen debt payments go from
3.7 percent of GDP to 2.1 percent of GDP.
The IMF didn't return calls
seeking comment, while a World Bank spokeswoman referred inquiries to its Web
site for information on their programs.
Activists say the reductions are
negligible, especially considering the AIDS crisis. Indeed, pharmaceutical
companies have drastically reduced the price of AIDS medications with at least
two firms selling medicine at cost. Still, they are deemed to expensive.
"HIV/AIDS is worse than the bubonic plague," said Lee. "The money used
for debt service could be used for education, research, a health care delivery
system. ... It could go a long way to turning the situation around."
On the Net:
http://www.worldbank.org
http://www.imf.org
http://www.dropthedebt.org
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Copyright
©2001 by the President and Fellows of Harvard College.
Last revised 4/2/2001