C'Wealth Ministers Focus On Poor
We live on a planet that is increasingly not one world but two, Sri Lanka's deputy finance minister and justice minister G L Peiris said. The prospects of the poorest countries, under threat of marginalisation, have been worsened by the continuing decline of (aid), he told a Commonwealth finance ministers meeting in the Caribbean island of Bermuda.
The meeting of some 53 countries that once made up most of the British Empire has focused on the urgent need to help developing countries pull themselves out of a worsening debt trap.
Multilateral debt poses particularly strong pressure as it is neither reschedulable nor cancellable under the existing terms and conditions, Tanzanian finance minister Simon Mbilinyi said. His own country's economic adjustment programme was being threatened by the burden of paying off its debts to official creditors such as the Paris Club, the World Bank and International Monetary Fund.
Many ministers have criticised proposals to help poor countries as so rigid that few could hope to benefit. Foreign direct investment, seen as the answer to the problems for developing countries to make up for declining aid, has been limited to a small number of economies, Botswana finance minister FG Mogae said.
The growth of international trade has also benefited only a handful of developing countries and some ministers warned that trade liberalisation at too fast a pace could cause more harm than good.
The poor countries were backed by Britain's Chancellor of the Exchequer Kenneth Clarke, who told the world's major creditors not to wait for each other to provide vital debt relief for poor countries. Help is crucial if they are going to be able to attract private investors, though they in turn must be prepared to open up their own economies and not throw money away on military spending, Clarke said. He intends to press further on the issue at next week's annual meeting of the World Bank and IMF, which are still debating how to finance any debt relief. It is only very recently that the two institutions and the industrial countries which dominate their boards have begun to consider breaking a long-held taboo of forgiving some past debts. s/bottom.inc"-->