Failing IPS news reports appear daily in English, German, Finnish, Norwegian, Spanish and Swedish. The initiative, established in 1996, has been widely touted as the first comprehensive effort to reduce the debt burden of the world's poorest countries - albeit only to 'sustainable' levels at which creditors can be assured of borrowers' ability to service their loans. Their report confirms warnings issued by debt-relief advocates even before the scheme was launched. ESAF provides concessional loans so governments can keep up with debt repayments as they implement IMF prescriptions to rein in inflation, cut public spending, and open local markets to international trade, commercial lending and foreign ownership. The IMF defends this arrangement on the grounds that its economic prescriptions, however painful in the short run, will enable governments to make better use of their debt relief over the long haul.
Critics counter that the agency is holding debt relief hostage to structural adjustment.
Uganda has helped open their eyes. The East African nation has been pushed back into unsustainable debt less than a year after becoming the first HIPC graduate. This has been despite more than a decade of SAPs and extraordinary last- minute efforts by the World Bank to ensure reduced debt payments. The United States, Canada, Britain, Germany and France all have put forward HIPC reform proposals, and most back the sale of some IMF gold to bolster available financing. Fund managers favour selling about five million ounces while Washington, which has yet to pay in its share for HIPC, wants to cash in 10 million ounces.