- The International Monetary Fund (IMF) has been accused of failing to reach an agreement to clear the arrears owed by Liberia, a necessary step that allows Liberia to access life-saving debt cancellation.
A consortium of organisations [Jubilee USA Network, Africa Action, and European Network on Debt & Development (Eurodad)] outrageously reacted to the development.
“The IMF and its main shareholders ought to be ashamed of their broken promises to Liberia,” said Emira Woods, Board Chair of Africa Action and Co-director of Foreign Policy in Focus.
“Liberia has met all of the onerous requirements demanded by the IMF to access debt cancellation, and they still have gotten nothing in return. Meanwhile, the impoverished majority in Liberia pays the price for the IMF’s inaction.”
Liberia’s debt to the IMF, the World Bank, and other creditors totals more than $4.5 billion. However, much of this debt is “odious or illegitimate” in nature, having been run up by the brutal regime of Samuel Doe, with no benefit to the people.
During years of civil war, Liberia failed to make its scheduled payments, resulting in huge arrears which the IMF insists must be cleared before the West African country entered the debt cancellation process.
“Liberia's debt and the arrears are both the result of irresponsible lending. Every delay amplifies this injustice; now is the time for accountability on the part of the creditors,” said Marie Clarke Brill, Interim Executive Director at Africa Action.
For 18 months, the IMF shareholders have been working to devise a plan to clear the country’s US $800 million arrears. And after developing a complex formula to mobilize the needed resources, a funding gap of US $60-90 million still remains.
IMF shareholders are currently debating who should cover the remaining costs. While some ask the IMF to use its substantial internal resources to make up the difference, others seek the assistance of the G-8.
“The IMF is playing a blame game rather than investing the time and energy necessary to come up with the remaining cash. The reality is that IMF management, the Bush administration, and other leading shareholders including middle-income countries all share responsibility for this failure,” said Neil Watkins, National Coordinator of Jubilee USA Network, an alliance of 80 religious denominations, development agencies, and human rights groups.
“While the Bush administration has been active, they are not doing enough. If this administration is serious about supporting Liberian President Ellen Johnson-Sirleaf, President Bush and Secretary Paulson need to get on the phone with key shareholders and make a deal or come up with the extra money themselves now.”
“Belgium is the only rich country not to contribute its share of resources to clear Liberia’s arrears, and this is not acceptable,” said Gail Hurley of EURODAD, a network of 53 European development organizations.
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