ICFTU ONLINE...
246/981111/DD
Brussels November 11 1998 (ICFTU OnLine): The ICFTU is calling on the international financial institutions and creditor countries to suspend the debts of the Central American countries which have been devastated by Hurricane Mitch.
"It is a terrible irony", said the ICFTU, "that while aid agencies are calling on their governments to contribute money to finance emergency plans to bring relief to the region, Honduras and Nicaragua are paying out more than US$2 million every day in debt payments to some of those very countries which have made loans directly or through these financial institutions".
The ICFTU joins with groups like the Jubilee 2000 Coalition in pointing out that the cancellation of the unpayable debts of Honduras and Nicaragua would release resources that need to be spent on rebuilding the devastated countries.
Entire villages in Northern Honduras are under water, and a third of the houses in Tegucigalpa, the capital, where one million people live, have been badly damaged or swept away by the Choluteca River. In these circumstances, the Honduran Commerce and Industry Minister Reginaldo Panting has told newspapers that Honduras would like to see international creditors forgive much of the country's $4 billion foreign debt to allow the nation to begin rebuilding itself.
Honduras' external debt has tripled since 1980, and in 1996 stood at US$4.5 billion. Nicaragua's external debt is US$5.9 billion, and until recently Nicaragua had the highest debt per capita of all countries in the developing world. Honduras and Nicaragua are the poorest countries in Latin America, with a GDP per capita of under US$700. Both countries are in the Heavily Indebted Poor Countries (HIPC) Initiative, but debt relief under this initiative is not due for many years. Nicaragua will have to wait until 1999 before a decision is taken on how much debt relief it will receive, and will then have to wait until 2002 before this comes into effect. A decision will not be taken on Honduras' debt relief until 2001, and the IMF says that the country does not need full HIPC debt relief.
The ICFTU says that there is no possibility of these countries servicing their external debts in the current emergency or indeed in the foreseeable future, as a major part of their economic base which relies on agriculture has been destroyed. It is calling on the creditor countries and institutions to recognise this, and suspend or cancel all due debt repayments from these two countries immediately.
International Confederation of Free Trade Unions (ICFTU)
Boulevard Emile Jacqmain 155, B - 1210 Brussels, Belgium. For more information
please contact: Luc Demaret on: 00 322 224 0212 - press@icftu.org