Aid campaigners and pop stars train guns on IMF

AID campaigners, buoyed by their success in lobbying governments to write off a big chunk of Third World debt, are training their guns on the IMF ahead of the organisation's meeting later this month.

The Group of Seven major powers agreed in June to cancel about $70 billion in loans owed by 36 poor countries and pledged to strengthen the link between debt reduction and poverty alleviation through the International Monetary Fund (IMF).

Development organisations contend that the G7's debt forgiveness plan was woefully inadequate. Several groups have said they plan to broaden the focus of their campaigns to hold the seven industrial powers to their promise on debt reduction.

That, they say, means getting the IMF to change its ways.

"What happened at Cologne was that the IMF became the gatekeeper for debt relief, which is a bit like putting a fox in charge of the henhouse," said Mr Ian Bray of Oxfam International. "They're the last people who should be looking at poverty-focused responses after debt relief."

The G7, at its June session in Cologne, Germany, called for the IMF to develop specific plans to tackle poverty reduction by the time of the IMF's annual meeting. The G7 wants the IMF to integrate pursuit of sound social policies into its structural adjustment programmes.

The aim is to ensure that savings from debt relief are channelled into health, education and other social needs that are essential for alleviating poverty.

IMF officials insist that poverty reduction is the ultimate aim of the fund's economic reform programmes, but aid campaigners are dismissive. They see no sign that the IMF is prepared to soften its traditional hard focus on sound money and low inflation.

"Other donors are looking at the impact that policies are having on poverty, whereas the IMF are still almost like a rabbit caught in the headlights of macroeconomic stability, rather than looking at the 2015 targets for halving the number of people living in poverty," Mr Bray said.

Henry Northover, of the Roman Catholic aid agency Cafod, agreed. He said the failure of the G7 and the IMF to judge debt sustainability according to poverty levels was a crucial flaw in the debt strategy.

"So far we're getting these very narrow analyses that focus exclusively on balance-of-payments sustainability," he said.

"We want to see a widening of the narrow macroeconomic benchmarks to enable countries that have a genuine commitment to poverty reduction to qualify for debt relief, Mr Northover added.

Alongside the push for a kinder, gentler IMF, lobbyists want governments to promise that they will not run down existing aid budgets to pay for debt relief.

"The reason why people are campaigning so strongly for debt relief is precisely because of the low levels of investment in infrastructure in poor economies. So we want to see debt relief as part of an additional financing flow and not a substitution for aid," Mr Northover said.

Pop stars continue to play a prominent role in the debt campaign. Bono, Bob Geldof and Quincy Jones will be in a delegation from the Jubilee 2000 coalition that is scheduled to have an audience with the Pope in Rome this week to discuss debt relief.

Jubilee 2000 expects Pope John Paul to declare his support for its campaign for unpayable debt to be cancelled by the year 2000.