World Bank Speeds up Debt Cancellation for Resource Poor Countries

March 29, 2006

Advocates for cancelling resource poor countries' debt had an unanticipated victory yesterday (March 28).

Instead of implementing a plan where impoverished countries would have to wait until July 2007 to see 100 percent debt cancellation, World Bank leaders opted for a plan that would cut the waiting time to only three months.

E-mail messages to World Bank President Paul Wolfowitz and U.S. Executive Director Robert Holland asking them to avoid delays and to keep the debt cancellation promise made in Gleneagles in July 2005 played a key role in the World Bank’s change of course.

Jubilee USA Network reported that tens of thousands of phone calls and email messages to World Bank President Wolfowitz, a letter from several prominent members of the U.S. Congress and support from governments and civil society across the globe led to this important reversal.

The debt agreement finalized Tuesday, March 28 will cancel 100 percent of debts owed to the International Monetary Fund (IMF), World Bank, and African Development Bank in 2006 for 17 resource poor countries.

It is important to note that this deal excludes dozens of other resource poor nations that require debt cancellation to meet Millennium Development Goals. It also excludes debt to other significant creditors such as the Inter-American Development Bank. Nor does it address illegitimate debt, or get rid of economic conditionality.