As has been mentioned here before, one of the main problems with schemes currently offered for international debt cancellation is the conditionality attached to them. That conditionality goes beyond pressure for transparent accounting by adding considerable requirements for privatisation of public services and movement towards a market-capitalist system. Whatever the merits or otherwise of such a system, the application of those conditions can create artificial pressures on economies unprepared for such rapid change and under-resourced to deal with the new challenges they create.
The World Development Movement are reporting that a new draft policy paper has been released by the UK Government’s Department for International Development recognising that there is no economic one-size-fits-all panacea that can be applied in these cases and that more nuanced policies are needed. In equally positive news, WDM also report that:
As a result of DFID tabling its draft policy paper at the Autumn Meetings of the IMF and World Bank, the Bank has agreed to a far-reaching review of conditionality - just two days after Bank President Jim Wolfensohn declared that conditionality was no longer an issue. The IMF is also reviewing its conditions.
With the UK taking on the presidency of the G8 in 2005, news of changes in its policies on debt relief are welcome. As president of the G8 the UK will get the opportunity to set the agenda for the annual summit. We can hope that policy issues such as this one finally get back onto the table, after many years away.