Madam, - John O'Shea (April 24th) erroneously peddles the belief that debt relief is given to African countries without any conditions. Debt relief comes with so many conditions attached that many campaigners question the value of the current cancellation schemes.
The World Bank "Country Assistance Strategy" for Mozambique includes 126 pages of conditions. If the country goes "off track", the debt cancellation can be reversed.
A significant body of research shows the often negative impact of conditions. As an earlier condition Mozambique was forced to remove its tax on unprocessed cashew nuts leaving the country. As a result all 15 of the country's industrial cashew processing plants closed - with 10,000 job losses.
Further, Mr O'Shea includes Mozambique among his growing list of "most corrupt" countries. Corruption is unacceptable in any form. However, 60 countries fare worse than Mozambique on Transparency International's "Corruption Perception Index".
And it takes two to bribe. A World Bank study has shown that the exports of fish from Mozambique are only half the quantity of Mozambican fish imported by other countries. Why this discrepancy? Because the European, South African and Japanese companies operating in Mozambique's waters don't report much of what they catch - and consequently pay lower licence fees to the country. When will that debt be repaid to Mozambique?
On one point Mr O'Shea is correct: that people naively believe that the money debt relief releases "will find its way to the poorest of the poor". The $119 million debt relief granted to Mozambique last December does not wing its way to the poorest of the poor. Nor does the government there get its hands on the cash. The cancellation is a book-keeping exercise with money moving from one account to another account within the IMF.
But at least the people of Mozambique, surviving on an average of 58 US cents per person per day, will see a little less of their meagre income leave the country in interest payments. - Yours, etc,
CONALL O'CAOIMH, Policy Officer, Comhlámh, Upper Camden Street, Dublin 2.
Madam, - John O'Shea wonders why the World Bank and its president, Paul Wolfowitz, continue to implement the decisions of the G8 countries on debt relief in the face of continued corruption in the developing world.
He accuses Mr Wolfowitz and those of us who support debt relief for the world's poorest countries of being naive, but I think perhaps it is he who is the innocent abroad.
Debt relief is far from being unconditional, as John O'Shea claims, and is surrounded by a complex web of conditions which must be fulfilled if poor countries are to benefit from it.
Among these conditions are the need for each country to have an agreement on macro-economic management with the International Monetary Fund. This agreement must specify how the public finances will be managed transparently. Most benefiting countries have now ring-fenced debt relief expenditure in specific accounts which can be monitored independently. For example, Malawi recently changed its budget format to allow external monitoring of the resources it spends at national and district level.
Benefiting countries have also to fulfil conditions which ensure that an increasing share of the country's resources are devoted to poverty reduction. They must produce a national poverty reduction strategy which is monitored annually by parliament, foreign donors, the World Bank, and the media. They also have to achieve increases in spending in specific sectors such as health and education. Such mechanisms not only allow official scrutiny of debt relief but have also opened up the whole issue of investment in poverty eradication to the many local community and social action organisations with an active interest in these matters.
This involvement of the people themselves in the process must not be ignored or underestimated. Trócaire supports such budget monitoring and transparency initiatives in 10 countries in sub-Saharan Africa.
Far from being unconditional, debt relief has been hard won by the governments of the poorest countries and is fiercely guarded by their people. - Yours, etc,
JUSTIN KILCULLEN, Director, Trócaire, Maynooth, Co Kildare.