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Date: Wed, 31 Jan 2001 22:42:07 -0000
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Subject: [j2000-usa-news] Tell Bush to cancel the debt; plus Mozambique news
See below the latest news from Jubilee 2000/USA (soon to be Jubilee
USA Network). You'll find below OUR LATEST ACTION ALERT, plus a
fascinating item on an instance of successful resistance, by
Mozambique, to outside imposition of economic policies.
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JUBILEE ACTION ALERT-- Let freedom ring!
Please take time to act now, and send this Alert to others. Thank
you!
Write President Bush and your members of Congress today. Tell them it
is time to complete the unfinished business of Jubilee debt
cancellation.
Ask them to instruct the World Bank (WB) and International Monetary
Fund (IMF) to cancel the debts of low-income countries now, without
requiring Structural Adjustment Programs, and to appropriate at least
$375 million over the next two years for the remaining US share of
the international debt cancellation (for relief of debts owed the IDB
and the US govt).
Ask President Bush to make definitive debt cancellation a top
priority for action this year. Remind him of his campaign promise to
cancel debts of Third World countries. Urge him to fully fund debt
cancellation in his budget and to be a strong advocate for
multilateral debt cancellation (of debts owed lenders like the World
Bank, etc) with other creditor country leaders at the July 2001 G7
Summit in Genoa, Italy. You can also mention the connection between
debt and the global AIDS crisis, which Bush has also promised to act
on.
Contact:
1) Please send a signed letter to:
President George W. Bush
The White House, Washington, DC 20500
2) Please send similar letters to:
Your Senators: (A complete updated list is available at
www.senate.gov)
US Senate, Washington, DC 20510
3) Please send a similar letter to:
Your Representative: (A complete updated list is available at
www.house.gov)
US House of Representatives, Washington, DC 20510
Background:
Last October, the US Congress approved $435 million for reduction of
the debts of the so-called Heavily Indebted Poor Countries (HIPC),
and voted to approve use of a modest portion of the IMF's existing
financial resources for debt reduction. A year earlier the Congress
appropriated $110 million. Altogether, the richest countries (the
Group of 8) and the international financial institutions that they
dominate (the IMF and WB in particular) are providing debt relief
via HIPC worth about $34 billion (for 22 countries so far through the
program) —a good start. However, total developing country debt is
many times greater than this—the HIPC countries alone are making
payments on an estimated debt of over $220 billion. When other very
low-income countries such as Nigeria, Bangladesh, Haiti, Peru, and
the Philippines are included, the total is more than $350 billion.
Congress also approved a provision requiring that US representatives
to the IMF, WB, and regional development banks vote against and
oppose any loan agreements that include "user fees" on basic
education and health care for poor people. This provision is a
breakthrough in that it begins to focus critical attention on the
high social costs that often accompany aid. The Fund and Bank
require "Structural Adjustment Programs" (SAPs) as a condition for
new loans. SAPs typically reduce living standards by requiring fees
and/or sharp cuts in government spending for education, health, and
other basic needs. Many of the key documents that citizens groups
need to be aware of their governments' commitments under structural
adjustment agreements are still kept secret.
Debt reduction *has* helped—in Uganda, school enrollment has doubled
since user-fees on basic education were removed. Tanzania has ended
school fees. Senegal and Uganda are making great strides in reducing
the rates of AIDS infection. Honduras can now afford to offer three
more years of free schooling. The 22 countries that qualified for
partial debt reduction by the end of 2000 will see their debt service
payments reduced by an average of about 30%. (In several cases the
percentage reduction is over 50%; in the case of Honduras it is
18%.) But much more is needed.
President Bush is on record in support of some form of debt
cancellation. During the second campaign debate (October 12) he
said "I think we ought to be forgiving Third World debt under certain
conditions." Bush has also made several pledges to act to curb the
AIDS pandemic. Canceling debt could free up billions of dollars for
the fight against AIDS.
Much bolder action is needed:
* Most HIPC countries will continue to spend more on debt repayments
to rich countries than on health.
* The World Health Organization says at least an additional $3
billion annually is required for a minimally adequate effort to curb
the AIDS epidemic in Africa alone. Harvard researchers Amir Attaran
and Jeffrey Sachs now estimate the real need as at least $7.5 billion
annually.
* HIPC debt reduction is still tied to IMF and World Bank structural
adjustment programs which often hurt the poor. Plus, key documents
that show the agreements between governments and creditors are still
kept secret from local citizens groups, making full participation in
decision-making impossible.
Drop the Multilateral Debt Now!
Jubilee campaigns around the world are calling for 100% cancellation
of low-income developing country debt by the IMF, World Bank, and
other international financial institutions. The IMF can write off all
HIPC debts without impairing its credit ratings or balance sheets.
The World Bank can afford 100% cancellation of the HIPC debt it
holds, and its IDA-affiliate can afford cancellation of two-thirds of
the debt it holds without additional appropriations.
Fact: several countries will see more than 50 per cent of their debt
payments going to pay multilateral creditors like the IMF and the
World Bank: Benin (67% to multilaterals), Burkina Faso (71%), Guyana
(75%), Malawi (58%), Mali (68%), Rwanda (94%) and Zambia (63%).
Please Act Now! Contact your Members of Congress and President Bush
today. Pass this Jubilee Action Alert along to others. Thank you very
much!
Proclaim liberty throughout the land, to all the inhabitants thereof.
(Leviticus 25:10)
"True compassion is more than flinging a coin to a beggar; it
understands that an edifice which produces beggars needs
restructuring. A true revolution of values will soon look uneasily on
the glaring contrast of poverty and wealth." Rev. Dr. Martin Luther
King Jr.
For more information: www.j2000usa.org or [log in to unmask]
202-783-3566
or in the Northeast: [log in to unmask] (617) 746-2103
++++++
==> Jubilee 2000/USA will be re-structured and re-envisioned at a
special meeting in Denver, Feb 16-18. The Jubilee USA Network will
be born! Are you interested in attending this important meeting, to
help chart the course for 2001 and beyond? For an agenda and
registration materials contact AFSC Denver at 303-623-3464 phone or
email [log in to unmask]
+++++++
MOZAMBIQUE WINS LONG BATTLES OVER CASHEW NUTS AND SUGAR
MOZAMBIQUE BANS RAW CASHEW EXPORTS AFTER IMF ALLOWS CASHEW AND SUGAR
PROTECTION
article and clippings by Joseph Hanlon
[log in to unmask] 30.01.01
Mozambique has banned the export of unprocessed cashew nuts, ending a
five-year battle with the World Bank and International Monetary Fund.
Meanwhile, the IMF has allowed Mozambique to protect its expanding
sugar industry; IMF directors overrode opposition from their own
staff.
Allowing Mozambique to protect its two most important agro-industries
is a remarkable reversal by the international financial institutions.
It results from intense pressure from the Mozambican government,
trade unions and business, taken up by international campaign groups.
Cashew became a symbol of mindless trade liberalisation when in 1995
the World Bank forced Mozambique to allow the unrestricted export of
unprocessed cashew nuts to India. The World Bank argued that peasant
producers would gain higher prices from the free market. But it did
not happen -- as a monopoly buyer, India pushed down the price;
transfer pricing also lowered the price paid to Mozambique; and
traders within Mozambique pocketed larger margins. So the peasants
lost out, while nearly 10,000 industrial workers (half women) became
unemployed.
For five years Mozambique has campaigned against the ban. Finally, on
18 December the IMF Executive Board agreed a policy under which some
cashew factories will be closed, but the rest will be protected. The
protection is two-fold, an 18 percent export duty on unprocessed
cashew nuts, plus the local industry given the right of first
refusal -- to purchase nuts before they are exported. In light of
this, the government banned the export of raw cashew nuts in mid-
January.
Clippings reproduced below set out the recent events. The long
history of the cashew saga was published last year in "Review of
African Political Economy" no 83, pages 29-45. The article is also on
the web, at www.jubilee2000uk.org/policy_papers/roape100400.html
Meanwhile, the IMF Executive Board rejected a demand from its own
staff, and agreed that Mozambique can protect its sugar industry,
which is now being rehabilitated with major foreign investment. IMF
staff had argued that since Mozambique could import sugar cheaper
than producing it, it should allow duty-free import of sugar.
Investors had demanded protection and were backed by the government.
On 18 December, the IMF board agreed
with the government and not its own staff.
Cashew and sugar are both about similar issues: Mozambique wants to
create and protect tens of thousands of industrial jobs (cashew and
sugar are the country's two largest industries). On the other hand,
the international financial institutions (IFIs) argue that free trade
and globalisation will bring more long-term benefit, outweighing the
cost and disruption of massive unemployment. The IFIs believed they
could impose their policies, but the international outcry over cashew
made them rethink, and accept that they had to listen more closely to
elected national government.#
================
CLIPPINGS
Below are press articles and reports on cashew and sugar
Cashew export ban -- AIM (English) and Metical (Portuguese)
Recent IMF statements on cashew and sugar
IMF policy articles -- AIM and Metical
Job losses in cashew -- AIM, Metical and NotMoc
Export earnings down due to cashew price fall -- Metical
================
EXPORT BAN
-----
94101E FINALLY, RAW CASHEW EXPORTS BANNED
Maputo, 26 Jan (AIM) - The Mozambican authorities have slapped an
embargo on the export of raw cashew nuts to India, reports Friday's
issue of the independent newsheet "Metical".
For years the local cashew processing industry has been
demanding a total ban on raw nut exports, arguing that the exporters
compete unfairly with the industry, and deprive it of its raw
materials. Liberalisation of the trade in cashews was one of the
conditions imposed by the World Bank in 1995, in exchange for access
to soft loans.
The government was forced to dismantle protection for the
processing industry, much of which had only recently been
privatised. When it became evident that liberalisation was
killing off the processing industry, the government, with a reluctant
World Bank go-ahead, in 1999 raised the surtax on raw nut exports
from 14 to 18 per cent. The industry said this was insufficient to
save the factories, and demanded the total prohibition of raw nut
exports.
The industrialists have been proved right: currently the great
majority of cashew processing plants are closed, and over 8,500
workers have lost their jobs. The sudden embargoing of raw nut
exports does not mean, however, that the government is making a last
ditch attempt to rescue the industry. Nor is the move likely to
arouse the ire of the World Bank and the IMF.
For, according to "Metical", the government moved because it
suspected massive underinvoicing on the part of the exporters. The
government could not believe that the export prices (on which the
companies would have to pay the 18 per cent surtax) could be
as low as the exporters claimed.
They alleged that this season's export price varied from 355 to
440 US dollars a tonne.
The government, however, does not want the nuts exported for
anything less than an FOB price of 650 dollars a tonne.
The exporters claim that the price is low because of the poor
quality of the Mozambican nuts, which have supposedly been assessed
by the Indian buyers and by a pre-shipment inspection company.
Mozambican customs does not believe this story. On 19
January the customs service ordered that 8,000 tonnes of raw nuts
currently in the port of Nacala, should not be exported at the rock
bottom prices quoted by their owners.
Customs based its decision on the world market price of cashew
as cited by Mozambique's Export Promotion Institute (IPEX). The
IPEX bulletin for January gave the world market price of raw cashews
as between 660 and 800 dollars a tonne - about twice the price the
exporters say the Indian companies are paying them.# (AIM) pf/ (426)
+++++
==> Jubilee 2000/USA will be re-structured and re-envisioned at a
special meeting in Denver, Feb 16-18. The Jubilee USA Network will
be born! Are you interested in attending this important meeting?
For an agenda and registration materials contact AFSC Denver at 303-
623-3464 phone or email [log in to unmask]
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People can subscribe by sending an empty email message to
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For full campaign news visit www.j2000usa.org
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