DEVELOPMENT-ITALY: Bill to Write Off Debt Owed by 78 Countries

By IPS Correspondents Reprint | | Print |

Jorge Piña

ROME, Jun 17 2000 (IPS) - Government officials and political leaders in Italy Friday lauded a bill under study in parliament to forgive four billion dollars in foreign debt owed by 78 highly indebted poor countries.

The initiative, currently being discussed by the Chamber of Deputies commission on foreign relations, will be voted on Jun 23 by a full session of the lower house of parliament, where it is expected to be almost unanimously approved by all parties.

The bill provides for a two-year timeframe from the moment the law goes into effect to write off four billion dollars owed by 78 developing nations.

In order to qualify as beneficiaries of the debt write-off programme, Italy’s debtor nations will have to demonstrate that they can guarantee respect for human rights and fundamental liberties, and that they have eschewed war as a means of resolving international conflicts.

The draft law also stipulates that the funds released by the debt cancellation initiative are to be used to bolster the well- being and full human development of the population, with a particular emphasis put on the fight against poverty.

The governments will have to present specific projects for channelling the funds towards social aims, with especial attention to agriculture, health, education and infrastructure.

The bill provides for the total cancellation of the money owed Italy by countries struck by natural disasters.

Developing countries owe Italy a total of 30 billion dollars, with 18 billion dollars of the debt held by private institutions.

Italy’s proposal was discussed at the fourth international forum on debt, a two-day conference that ended Friday in Rome, part of a campaign by local non-governmental organisations and institutions pushing for the cancellation this year of all “unpayable” debt owed by poor countries.

Italy’s under-secretary of foreign relations, Rino Serri, said the draft law was an important step forward in relations with developing countries.

Serri said he was opposed to setting unilateral conditions that must be met before countries can qualify for the cancellation of the debt they owe Italy.

“Industrialised nations cannot set requirements for the countries of the developing South, but must simply stress the need for a common effort to achieve respect for human rights, freedom and democracy,” said the official, who warned that setting conditions could jeopardise the debt relief operation.

Walter Veltroni, the secretary of the Democratic Left Party — the chief political force in the governing coalition — commended the initiative, and expressed his wish for poor countries to participate in international forums where decisions concerning them are adopted.

“We must put an end to the habit of making decisions about developing countries without listening to them,” he stressed.

Veltroni proposed opening the Group of Eight (G-8) most industrialised countries to the poorest nations, which “today have no voice in discussions of their fate.”

The chairman of the Chamber of Deputies’ commission on foreign relations, Achille Occhetto, said “there is no doubt that the foreign debt owed by the poorest nations is the biggest hurdle to their development, and forces them into appalling living conditions.”

The interest that countries of the developing South must pay on their foreign debt often outstrips domestic spending, which means no funds are left over for social programmes or health, he pointed out.

The organisers of the international forum in Rome said they were closely following Italy’s important debt relief initiative, which they said was partly a result of the campaign for writing off unpayable debt. They also hoped the bill could be made even stronger as it wound its way through parliament.