Debt relief accompanied by more blows to poor

The decision of the recent meeting of G7 (largest industrialised) 
countries to scrap debt owed to them by the poorest countries of the world 
would be welcome if it were not tied up with strings.

The scrapping of the debt is conditional on the governments of the poor 
countries following IMF conditions and the IMF selling 10 per cent of its 
gold reserves.

"We ... reject the intention by the IMF to sell 10% of their gold reserves 
as a trade-off. We similarly reject the conditions of wholesale 
privatisation, leaner civil services and the reduction of state spending 
placed on these countries", said COSATU in a statement issued following the 
G7 meeting.

"Only increased poverty awaits the people of these countries if their 
governments follow the IMF conditions. After all, it was the IMF's 
conditions and high levels of interest repayments that, in the main, landed 
these countries to the dismal state that they are in today."

Whatever relief scrapping of debt might bring, it would soon be wiped out 
by the austerity measures and higher prices imposed by the IMF.

The privatisation and other IMF conditions will provide openings for 
transnational corporations, from the G7 countries, to further penetrate and 
exploit those economies and the people.

As for the gold sales, South Africa's Finance Minister Trevor Mauel 
described the sales as dangerous for the mining industry.

Talk of the sales has already led to a drop in the gold price to its lowest 
in 20 years. Many of the countries the IMF claims to help are gold 
producers who depend on gold sales for their foreign currency.

"Economists have warned that thousands of jobs will be lost if the gold 
price stays at its current level for more than a few months. 

This is all the more worrisome for a South African gold industry that has 
shed 100,000 jobs in the past three years", said the COSATU statement.

If the mining companies are sent to the wall, along with their workforces, 
there is no prize for guessing who will snap them up.

"The IMF's decision to sell gold reserves therefore can only result in more 
blows for those they claim to help."