The round table on ‘Conceptual and Operational Issues of Lender Responsibility for Sovereign Debt’ was hosted by the World Bank following the publication of a draft World Bank discussion paper entitled ‘Odious debt: Some considerations’ in September 2007. The event was organised in response to a request by a coalition of civil society organisations (CSOs) interested in discussing the findings of the bank’s paper and the broader issues of odious/illegitimate debt and responsible lending. This outcome report captures some of the main points raised by panellists as well as the discussions with the meeting’s participants which followed, namely, the concepts of odious and illegitimate debt, whether or not these can be considered well-established legal concepts, consideration of how feasibly these concepts could be applied in practice and practical approaches to addressing concerns on responsible lending and borrowing in the future. As follow-up some civil society organisations suggested that, if the World Bank was indeed serious about the importance of the odious debt issue, it should foster further discussions on the subject with legal experts to discuss different approaches to dealing with the problem. It was also proposed that the World Bank and a Southern CSO jointly appoint an independent auditor to examine selected credit according to mutually agreed indicators. Finally, CSOs called for the World Bank discussion paper and roundtable outcome report to be discussed by the bank’s management and Board.
Health equity in economic and trade policies
A SADC Task Force of Ministers of Trade, Finance and Agriculture met on 13 July 2008 in Lusaka, Zambia to discuss measures to mitigate currently increasing food prices, the impending food crisis and ways to improve the food security situation in the SADC region. The Ministerial Task Force noted that prices of food commodities worldwide have risen sharply over the past couple of years and even more sharply from January 2007 to date. There are a number of factors that are believed to contribute to the observed increase in world food prices. Key among them are the increasingly poor weather conditions, high energy prices, worldwide reduction in levels of food stocks, massive shift in crop cultivation towards bio-fuels, increased consumption of food in emerging economies such as India and China, commodity speculation, and inadequate investment in agriculture in recent decades. However, prices in the SADC region haven’t risen quite as sharply as world prices, which provides for a window of opportunity for measures to be taken for minimising future rises in food prices. The Ministerial Task Force came up with several measures the Member States and the SADC Secretariat should take in order to reduce current and future food crises in the region. These include: increasing the levels of investment in agriculture, including aligning national budgets to the 10% of national budgets agreed to by SADC Heads of State and Government in May 2004; improving access to agricultural inputs especially fertiliser through the provision of temporary subsidies to smallholder farmers; expediting the harmonisation of Sanitary and Phyto-sanitary Standards measures and removal of non tariff barriers within the region; encouraging financial institutions and NGOs to prioritise agriculture and extend credit to small scale farmers especially women and vulnerable groups; introducing social security systems targeted at the vulnerable to cushion them from the impact of increased food prices; facilitating easy flow of information among Member States and with SADC Secretariat; facilitating the establishment of a Regional Food Reserve Facility; and creating appropriate incentives for private sector involvement in services related to agricultural and food security.
One of the main agenda items of the 2008 SADC Summit is the launch of the Free Trade Area. Having completed the critical tasks of the SADC Trade Protocol, the SADC FTA was launched during the Summit on 17th August 2008 under the theme: “SADC Free Trade Area for Growth, Development and Wealth Creation”. SADC attained the Free Trade Area as of January 2008, although three of its Member States, namely Angola, DRC and Malawi are still addressing challenges facing them in the implementing the Protocol on Trade. The region was also reported at the Summit to have recorded significant progress and positive developments in the core areas of social and human development. In the health sector, positive results were recorded in combating HIV and AIDS, Malaria and Tuberculosis. Measures were put in place to increase access to preventive and curative services. Consequently, prevalence and incidence rates for HIV and Malaria declined in certain population categories and some parts of the region, with a decline in both prevalence and incidence of HIV especially among the youth aged 15 to 24 years and pregnant women attending ante-natal clinics. A 90% reduction of malaria incidence was recorded in countries in the Lubombo Spatial Development Initiative where malaria cross border control initiatives are being implemented. These emerging positive indicators are due to improvements and strengthening of health systems in Member States.
The year 2008 is halfway to the deadline for reaching the Millennium Development Goals. Despite some progress, this article argues that they will not be achieved if current trends continue. Starting with the G8 meeting in Japan, rich countries must use a series of high-profile summits in 2008 to make sure the MDGs are met, and tackle both climate change and the current food crisis. Oxfam proposes an agenda into the G8 this year that includes action on specific areas: stop burning food and start supporting poor farmers; mend broken aid promises; support health, education, water and sanitation for all; and put women and girls first. The report points to a similar situation regarding climate change, where it argues that a lot of the money pledged to help poor communities to cope with the effects of changing weather patterns is simply being taken from existing aid budgets or being made into loans.
Concerns ran high in some developing countries last week that their voices have been largely absent from a draft set of standards for heightened intellectual property enforcement advancing rapidly at the World Customs Organization. With the draft standards sent early - and, some say, without mandate - to decision-making bodies at the WCO, the organisation looks poised to become the next major platform for debate on global enforcement of intellectual property, as members discuss the possibility of incorporating IP protection into customs law.
In the WTO negotiations, there is a push towards the liberalisation of new services sectors by countries. However it is felt that basic services should be excluded, such as education, health, water, energy and telecommunications from the text of the WTO’s General Agreement on Trade in Services. These services are human rights that cannot be objects of private commercial relations and of liberalisation rules that lead to privatisation. The deregulation and privatisation of financial services, among others, are the cause of the current global financial crisis. Further liberalisation of services will not bring about more development, but greater probabilities for a crisis and speculation on vital matters such as food. The intellectual property regime established by the WTO has most of all benefited transnational corporations that monopolise patents, thus making medicines and other vital products more expensive, promoting the privatisation and commercialisation of life itself, as evidenced by the various patents on plants, animals and even human genes.
At its eighth executive board meeting in Geneva on 2 and 3 July, market-oriented drug purchasing mechanism UNITAID agreed to the principle of establishing a patent pool - that is, a collection of intellectual property assets with the consent of their rights holders, for easier licensing to third party manufacture or researchers. This “landmark” decision for drug financing in poor and underserved areas agrees on the usefulness of sharing intellectual property rights to lower costs and increase quality of needed medicines.
This report is the last in a series from NEF designed to stimulate progress towards a comprehensive and fair treatment of the crisis of sovereign debt. With the end of an unprecedented period of low interest rates now in sight, such a goal is needed more than ever. Debt relief isn’t working. Current approaches (HIPC and MDRI for poor countries and Paris and London Club renegotiations for middle-income countries) are not solving the problems of Third World indebtedness. HIPC and MDRI are indeed reducing debt burdens, but for a small range of countries, and at a high cost in terms of loss of policy space and after long delays, but non-HIPC poor countries also have major debt problems. Middle-income countries’ indebtedness continues to grow. There is a clear need for a new approach to resolving sovereign debt problems that is comprehensive, systematic, fair and transparent and above all, just. Responses from the creditors so far to criticisms such as those in the previous paragraph have been grossly inadequate. There is as yet no consensus about the way forward. This report aims to stimulate debate and help find a just solution to the debt crisis.
The International Monetary Fund no longer has the financial clout to fulfil its traditional role of lending out money to save crisis-stricken countries, according to a Bank of England report. In all cases the analysis suggests the present IMF lending framework may no longer be appropriate. The working paper is unique because most critics of the Fund have instead focused on the shortcomings of its management structure or economic analysis. It said that the Fund "is increasingly unlikely to provide financing on a sufficiently large scale to meet the demands of higher-risk members." The IEO report also urged the Fund to overhaul its governance structure, much of which is largely unchanged since the 1940s. Among its recommendations was a call to reform the selection process for managing director.
The International Monetary Fund (IMF) has approved a three-year, US$79-million plan to support Zambia's efforts to alleviate poverty and sustain economic growth. The new Poverty Reduction and Growth Facility (PRGF) plan succeeds a previous arrangement successfully completed last year, the IMF said in a press release. The new PRGF arrangement will support the government's objectives of boosting economic growth and enhancing employment and income opportunities, especially for the poor, while maintaining macroeconomic stability. The PRGF is the IMF's concessional facility for low-income countries. PRGF loans carry an annual interest rate of 0.5 percent and are repayable over 10 years with a five-and-a-half-year grace period on principal payments.