The issue of debt relief is set to dominate the spring summit of the International Monetary Fund and the World Bank in Washington this weekend.This content was published on April 15, 2000 - 11:24
The issue of debt relief is set to dominate the spring summit of the International Monetary Fund and the World Bank in Washington this weekend. Switzerland is calling for a rethink of the way donor countries hand out loans to poorer nations and is also urging a restructuring of the Bretton Woods institutions.
The economics minister, Pascal Couchepin, and the finance minister, Kaspar Villiger, are heading the Swiss delegation.
"We do think the fight against poverty is important for the Bank, and that if there is a financial crisis, the bank should stick to long-term support instead of short term support," said Oskar Knapp of the Swiss finance ministry.
Also on the agenda this weekend is the initiative on Heavily Indebted Poorer Countries (HIPC). Last year a number of countries, including Switzerland, agreed to take part in the initiative launched in 1996 aimed at boosting debt relief for the developing world. The main condition is to cut debt to sustainable levels for countries which have a sound economic record over a six year period.
Knapp said another problem was that some lending countries had not followed words with action - that they had not implemented the necessary measures to cancel debts.
"However for lasting progress it is critical that benefiting countries maintain sound macro-economic management," added Giovanni Colombo of the economics ministry. "So the prime objective is not to push as many countries as possible through the initiative as fast as possible but rather to ensure assistance is granted to countries with a commitment to sound policy."
Colombo also said the IMF and World Bank should go back to their original mission, in other words, not to hand out extensive credits to countries which have access to private capital markets.
Switzerland's perspective is shared by its partners in the IMF and World Bank: including the view that financial stability will lead to greater social justice between the developing and developed world.
However, developing countries have criticised the fact that loan conditions are too restrictive.
swissinfo and agencies
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