Tuesday, October 23, 2007

States urged to cut Liberia debt

The president of the World Bank, Robert Zoellick, has called on International Monetary Fund member countries to allow Liberia's debts to be paid off.

Liberia is $800m in arrears on old debt to the IMF, relating to loans on which repayments stopped in 1984.

Forgiveness of the old debt would allow the IMF to issue new development loans.

Correspondents say it is widely agreed that Liberia's arrears should be paid off, but there is still some wrangling about the financial details.

Reuters reports that the IMF proposes to fund the debt relief by moving internal funds among accounts, which would not require additional funding from member countries .

Liberian President Ellen Johnson-Sirleaf with women supporters President Ellen Johnson-Sirleaf has won the sympathy of many donor countries

"We are held up because of the action of a few countries," Mr Zoellick said, speaking at the World Bank and IMF annual meetings in Washington.

"Some of them may have a few legal issues they have to check at home but I think it would be good tomorrow if we move this as far as we can."

Belgium is reported to be the one rich country that has failed to approve clearance of Liberia's arrears.

Some larger developing countries, including Brazil, Turkey, Indonesia and India, are also said to have reservations about using funds already available within IMF accounts, and would like the rich countries to make a larger contribution.

BBC NEWS | Africa | States urged to cut Liberia debt