MercoPress. South Atlantic News Agency

Four hemispheric countries in IMF debt write-off

The International Monetary Fund (IMF) has agreed to write off 3.3 billion US dollars in debts owed by the poorest countries in the world including Nicaragua, Bolivia, Honduras and Guyana.

The write-off follows the Group of Eight debt forgiveness deal which was struck in July. Earlier this month it was feared the IMF was set to withhold help for up to six of the poorest countries.

Debt-relief campaigners ended up warning some intended recipients that the IMF was set to drop them from the list because their macroeconomic policies did not meet its requirements. On Wednesday, the IMF dismissed reports that it had been back-tracking as "simply not true".

The multilateral debt relief initiative was agreed by leaders of the G8 industrialised states in July after the series of "Live 8" rock concerts drew attention to the issue. The debts owed by the 19 nations will finally be cancelled once the IMF has the approval of all 43 rich countries that have contributed to an anti-poverty trust set up by the Fund.

"So far we have 37 consents. We're quite hopeful we'll get the remaining six in the next few weeks" said IMF spokesman Thomas Dawson who described the event as "historic". Poor countries should receive IMF debt relief by early 2006.

Among the hemisphere countries benefiting, Nicaragua has a standing debt with IMF of 137 million US dollars; Bolivia, 251 million US dollars; Honduras 120 million and Guyana 48 million. Apparently the IMF recently finished a positive assessment of the economic policies of the Latinamerican candidates for the write off.

Nicaragua revealed the IMF suggested increasing electricity rates and a tighter control over government expenditure.

Oxfam, one of the organisations that feared the IMF would go back on its word, welcomed Wednesday's board verdict.

"It's good that the IMF realised that they couldn't wriggle out of promised debt cancellation during a closed-door session in Washington DC," a spokesman said. "The IMF must now deliver the funding quickly and without any further delay".