Sir, - The IMF's recent decision not to use its considerable "resources to cancel debts owed to it by the poorest countries has dealt a severe blow to the hopes of the people shouldering the burden of these debts.
Even more disappointing is what the IMF decided to do in response to demands that they produce proposals to tackle the debt crisis. Rather than use their resources to cancel debt, they plan to sink these resources into their Enhanced Structural Adjustment Facility (ESAF). Through this programme the IMF lends further money to low income countries so they can continue to repay their debts. Clearly this proposal will not enable heavily indebted countries to escape from the debt trap. Anyone who has had dealings with loan sharks will know that borrowing to pay off previous loans does not lead to financial stability.
The IMF's decision has implications for the Irish Government who are currently considering starting to contribute to ESAF. Serious criticisms of this programme already exist. It is the IMF's tool for keeping a stranglehold on the economies of heavily indebted countries with disastrous social and economic results. The IMF's use of ESAF to evade its responsibilities for debt cancellation adds to the case against an Irish contribution to this programme. Instead, pressure must be maintained on the IMF to play its full role in international efforts seeking an end to the debt crisis. - Yours, etc.,
Co-ordinator,
Debt and Development
Coalition Ireland, Dalgan Park, Navan,
Co Meath.