International Financial Institutions, including IMF and World Bank, are turning a cold shoulder on the treasury departments of under developed countries pertaining to debt cancellation, so disclosed Ministry of Finance and Economy.
Approached by The Ethiopian Herald Ministry of Finance and Economic Cooperation public relations Director, Haji Ibsa said that it is to be recalled that International Monetary Fund and World Bank had been displaying good will and stewardship in the debt cancellation in conformity with the initiative to strike out high debt of poor countries in the last fiscal years.
He noted that the aforesaid financial institutions are backpedaling from stretching out their lending benevolent apart from treating debt cancellation of the poor countries with a raised brow. He further said that among the under developed countries, Ethiopia is being mentioned as a best instance in economic growth but a typical example of escalating rate of debt burden.
For all-rounded development of the country and for keeping the development underway in the country going, unsaddling the country from the debt burden is critical. Lecturer of Economics at Addis Ababa University, Dr. Atliaw Alemu on his part said that debt cancellation by financial institutions is not obligatory. It is an act of benevolence. Adding he said that Ethiopia seems addicted to collecting loans from financial institutions across the globe.
Such easy-going measures will create financial burdens on the coming generations. No need to mention, its attendant ill could be backbreaking. He pointed out that the country had a tarnished image and regrettable history of demanding loans from affluent countries and international organizations. In this bent of its during the last three regimes, It had been putting on the back burner financial yokes for succeeding generations.
He remarked that before asking loans from the international financial institutions the government should put preconditions and precautionary measures pertaining to the amount of loan, the purpose for the loan, how to efficiently use the loan and how to pay the loan. Adding he said that it is better to run the country’s economy based upon own saving and investment for the execution of infrastructural facilities and public investment projects. He stated that when the government plans to draw loans from the respective financial institutions, it should give due concern on whether the loan is drawn from concessional, soft loan, commercial banks for the maturity period of time. He pointed out that debt imposition has repercussion on the economic growth of one’s country. It could expose a nation for corruption and maladministration.
For instance, the unreformed government had taken Monterey terms as a form of loan for the launching of a sugar factory. But its corrupt officials laid waste the 2 to 3 billion dollars garnered via loans. Because of corruption and malpractices that became the order of the day, the loan finance was embezzled by lechers.
The Ethiopian Herald, March 10/2019
BY MEHARI BEYENE
