Liberia to enter debt cancellation process
22 November 2007Liberia’s arrears to the IMF and African Development Bank have finally been cleared, opening the way for the country to start the multilateral debt relief process. After 18 months of stalling, the International Monetary Fund (IMF) has come up with the financing arrangements to clear Liberia's $842 million arrears to the institution, which will allow it to enter the Heavily Indebted Poor Country (HIPC) debt cancellation initiative. Sustained campaigning has been critical to this success - without public pressure the deal might still not have been struck. And this week the US Treasury agreed to provide $2.5 million to clear Liberia's remaining arrears to the African Development Bank, which must also be paid off before it can start receiving debt relief.
The new Managing Director of the IMF, Dominic Strauss-Kahn, described the financing breakthrough at the Fund as a "milestone" and "a critical step in moving Liberia onto a path toward comprehensive debt relief." He also thanked civil society groups for their efforts, which he said had helped to make this financing possible. But the fact that it took so long just to get this far highlights once again the flaws in the lengthy HIPC initiative.
Liberia was founded in 1822 as a home for freed slaves and Black people born free in the USA. It is shocking that in this 200th anniversary year of Britain's abolition of the Transatlantic Slave Trade, Liberia is still trapped by the chains of debt.
Today Liberia is one of the poorest countries in the world. Life expectancy is just 42 years and per capita income stands at just $0.33. And yet the country struggles under a massive $4.3 billion debt burden. Most of this debt is of an illegitimate nature, run up under the brutally oppressive regimes of Samuel Doe and Charles Taylor, with no benefit to the people.
Democratically elected Liberian President, Ellen Johnson Sirleaf, African's first woman president, is seeking to lead the reconstruction efforts. For her work to be successful, Liberia's debt burden must be reduced so that it can access the necessary resources to rebuild the country's infrastructure and start to meet its people's basic needs.
This war-torn and impoverished country's journey to debt cancellation is far from over. Liberia faces years ahead of meeting harsh conditions before it can have some of its huge debts cleared. In the coming months we will keep you posted on developments and, where necessary, ask for your help to ensure Liberia receives the debt cancellation it urgently needs as quickly as possible.
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