NAM urges debt reduction for world's poorest nations

JAKARTA (JP): President Soeharto, in his capacity as chairman of the Non-Aligned Movement (NAM), yesterday renewed his appeal to leaders of the world's wealthiest countries to reduce the debt burdens of the world's poorest nations.

"An important issue for the poorest, heavily indebted developing countries is the need for a `once and for all' reduction of all types of debt, in particular multilateral debt," Soeharto said in a message sent ahead of the Group of Seven (G-7) summit in Halifax, Canada, this week.

"Serious consideration should be given to the use of IMF (International Monetary Fund) gold and other modalities for implementing multilateral debt reduction."

The letter, a copy of which was made available to the press by the presidential office here, was addressed to Canadian Prime Minister Jean Chretien, the host of the June 15-17 summit which will be attended by leaders from the United States, Japan, Britain, Germany, France and Italy.

Soeharto appealed for a review of the working mechanisms of the World Bank and the IMF, including voting rights in the two institutions.

He said those agencies, also known as the Bretton Wood institutions, had often been used to serve the domestic political interests of developed countries as their major shareholders.

"Such actions have resulted in an ambiguity of mission, goal congestion and a diffused pattern of lending. There is a clear need for these institutions to return to a more focussed set of priorities," he said.

The NAM chairman urged the G-7 countries strive for a more effective multilateral surveillance system of the world economy, through greater discipline and coordination of their fiscal and monetary policies.

Impact

"Their polices have a severe global impact through highly unstable exchange rates and interest rates, as well as volatile international capital flows. The developing countries have a particularly strong stake in this matter."

This is the third consecutive occasion on which the NAM chairman has made an appeal to the G-7 leaders just ahead of their annual summit.

In 1993, Soeharto even traveled to Tokyo to meet with some of the leaders, including U.S. President Bill Clinton, just before their summit began, drawing their attention to the plight of the poorest developing countries in Africa and Asia, most of whom are members of the 112-nation movement. The concerns he raised were duly noted during the summit.

Last year, Soeharto sent a similar message ahead of the G-7 summit in Napoli, Italy. (emb)