FINANCE-MOZAMBIQUE: US Pledges to Cancel All Debt

By Jim Lobe Reprint | | Print |

Jim Lobe

WASHINGTON, Mar 8 2000 (IPS) - The United States government Tuesday said it will cancel all remaining bilateral debt owed by Mozambique to help that country recover from the last month’s devastating floods.

The announcement, by Treasury Secretary Lawrence Summers, came as US officials touted the arrival in Mozambique of the first 247 troops of a 900-man US force to help in relief operations there.

And, as if to counter charges that Washington is too slow to respond to humanitarian disasters in Africa, the State Department also announced the launch of yet another relief operation to provide 715,000 tonnes of food to six famine-threatened countries in the Horn of Africa.

Some 15 million people – including eight million in Ethiopia and three million in Kenya – are at risk of famine due to a major drought in the region, according to the US Agency for International Development (USAID). It said Washington will provide half of all the food aid needed to prevent famine there this year.

“We at USAID knew that the Horn of Africa was facing dangerous conditions even before the United Nations and other international relief agencies began calling for food aid,” Brady Anderson, USAID’s chief, told a special briefing here Tuesday.

Noting that a similar early-warning system and generous international assistance had prevented famine during a serious drought in Mozambique in 1993-94, he said, “Famine was avoided then, and I know it can be now.”

Tuesday’s announcements came amid growing calls by the Mozambican government and international non-governmental organisations (NGOs) to cancel all debt owed by Maputo to foreign creditors as the most effective way to help the country recover from the devastation wreaked by two deadly cyclones.

Mozambique, one of the world’s poorest nations, currently spends some 1.4 million dollars a week on servicing its 8.3 billion dollar debt. Although that will be reduced to about one million dollars a week under a debt-reduction agreement reached last year, most analysts believe the country cannot afford to pay even the lesser amount, especially after the past month’s natural disasters.

Until Tuesday, Britain was the only creditor country to pledge to forgive its bilateral debt.

The International Monetary Fund (IMF) and the World Bank, which together hold about one third of Mozambique’s official debt, have proposed a temporary payment holiday that would defer this year’s payments by Mozambique for at least one year, although interest on the outstanding loans would continue to mount.

Washington has already forgiven nearly all of Mozambique’s bilateral debt. Indeed, Summers said Tuesday that the remainder amounts to less than two million dollars.

But his announcement Tuesday was designed primarily to demonstrate Washington’s concern and to add to pressure on Mozambique’s other major creditors – notably France, Italy, Brazil, Russia, and Portugal – to follow suit, according to Treasury officials.

“We are prepared to relieve 100 percent of US bilateral debt at the earliest possible multilateral opportunity,” he said, adding that debt

forgiveness, which must be endorsed by the US Congress as part of a larger package, “is a good investment for the United States.”

Meanwhile, US officials continued to insist that their reaction to the flooding was not tardy as some critics have argued.

Graca Machel, the widow of Mozambique’s first president and who now is married to former South African President Nelson Mandela, levelled precisely that charge in an interview with the South African Broadcasting Corporation Tuesday.

“They’re will always be a question why people took so long,” she said. “When we are dying in thousands, then they come running, (but) it’s always too late,” she said.

But at a special briefing here Tuesday, Hugh Parmer, USAID’s director of humanitarian operations, said that his office first sent personnel to Mozambique one week after Cyclone Connie struck during the weekend of Feb 5-6.

“Their reports consistently indicated that, although, the flooding was of a serious nature and there were people at risk, the Mozambican and South African regional resources available for search-and-rescue operations were adequate.”

That report was echoed by a similar assessment by a Pentagon team, he said.

Cyclone Eline, which struck central Mozambique during the weekend of Feb 19-20, “did not drop a tremendous amount of rain on Mozambique,” he said. “So, our reports continued to be: Well, we dodged another bullet.

“However, we hadn’t dodged the bullet, because Cyclone Eline dropped a tremendous amount of water at its termination over Zimbabwe. That water, on already saturated ground, flowed down the river basin, into Mozambique, and over the weekend of the 26th created the kind of conditions we’ve all been seeing since then,” he said.

On Feb 29, Parmer’s bureau leased four fixed-wing aircraft and two helicopters that were already in the region. They began working with South African search-and-rescue aircraft Mar 1. At the same time, the bureau dispatched a 14-member team from Miami’s Search and Rescue Squad, and called for additional Pentagon helicopter support. Six helicopters are due to arrive Wednesday.

“Now, we’re actually in a situation where we’re moving more from rescue to relief,” said Pentagon spokesman Kenneth Bacon. “The waters are receding now, and the real issue is how to help the people who have been driven from their homes and have moved into refugee camps or other areas where they need shelter and food,” he said.