Europe South Asia Asia Pacific Americas Middle East Africa BBC Homepage World Service Education



Front Page

World

UK

UK Politics

Business

Sci/Tech

Health

Education

Sport

Entertainment

Talking Point
On Air
Feedback
Low Graphics
Help

Wednesday, November 18, 1998 Published at 12:18 GMT


World: Americas

Plan for Mitch debt relief

Help may be at hand

Countries struggling with the aftermath of Hurricane Mitch could have much of their debts written off.

Hurricane Mitch
The head of the International Monetary Fund, Michel Camdessus, has proposed wiping 80% of loans owed to industrialised countries by Honduras and Nicaragua off the books.

Mr Camdessus, who has been touring flood-ravaged areas of Nicaragua, has also promised more low interest loans with repayment spread over a long time.


The BBC's Paul Welsh: Honduras fears a cholera outbreak in the next week
"We are not only talking about immediate aid for reconstruction but rather the construction of a new country," he said after a meeting with Nicaraguan President Arnoldo Aleman.

Both Nicaragua and Honduras have been trying for years to reduce their debt which costs them much of their capital.


[ image:  ]
Honduras owes more than $4bn, costing the country $400m a year to service - about a third of its annual budget.

Nicaragua is in an even worse position with debts of $6bn - three times the country's annual gross domestic product.

The hurricane is estimated to have killed 11,000 people and left hundreds of thousands homeless.

Thousands of people are still missing and damage to crops and infrastructure runs into billions of dollars.

Fears of cholera epidemic

As aid agencies struggle to bring food and medicine to the survivors, there are growing fears of a cholera epidemic.

In Honduras doctors are seeing dramatic increases in people with Dengue fever, diarrhoea and pneumonia, which they attribute to the floods.


[ image: Mrs Clinton announced extra aid on her trip]
Mrs Clinton announced extra aid on her trip
And they are already planning for a cholera outbreak as early as next week.

Aid agencies are racing against time to build water treatment plants and clean up wells polluted by flood water.

Meanwhile, El Salvador has reported a cholera outbreak in the south-east of the country. One person is dead and four are ill after drinking contaminated water.

In Nicaragua, the pressure seems to have eased - many bridges have been rebuilt and food seems to be available in most places.

However, there is concern that aid has not been used as effectively as it could have been and some villagers say they still only have enough rice to eat once a day.


The BBC's Stephen Cviic: Politics is hampering Nicaraguan relief efforts
Disputes between central and local government has led to a lack of co-ordination in distributing supplies and one UN official says some international organisations are sending unnecessary quantities of food to the countryside which could damage the local economy.

IMF urges countries to cancel debts

Mr Camdessus's trip follows a visit by Hillary Clinton who said the United States would roughly double emergency aid commitments to the region, to a total of more than $250m.

Mr Camdessus also urged individual governments to help ease Nicaragua and Honduras' debt burdens.

In the past two weeks, the two countries have received commitments for major debt relief from France, Spain, Cuba and the US.

Mr Camdessus also praised the Nicaraguan Government's continuing commitment to painful structural reform, despite its current difficulties.

The IMF's low interest loans come with conditions that the country trim its budget deficit, tame inflation and meet other strict targets.

Earlier reports suggesting that the IMF is planning to write-off some 80% of the loans it is owed by Honduras and Nicaragua were incorrect.



Advanced options | Search tips




Back to top | BBC News Home | BBC Homepage | ©




Africa | Americas | Asia-Pacific | Europe | Middle East | South Asia



Relevant Stories

18 Nov 98 | Hurricane Mitch
Mitch: Picking up the pieces

17 Nov 98 | Americas
More US aid for Mitch victims

17 Nov 98 | Americas
The curse of cut trees

14 Nov 98 | UK
Hurricane Mitch: How you can help

11 Nov 98 | Americas
The burden of debt

09 Nov 98 | World
Special Report: Hurricane Mitch

09 Nov 98 | Americas
Mitch survivor: My six-day ordeal

08 Nov 98 | From Our Own Correspondent
Mitch hits poor hardest

27 Oct 98 | Americas
On the trail of Hurricane Mitch





Internet Links


International Monetary Fund

World Bank - Latin American and Carribean section


The BBC is not responsible for the content of external internet sites.




In this section

From Business
Microsoft trial mediator appointed

Safety chief deplores crash speculation

From Entertainment
Taxman scoops a million

Violence greets Clinton visit

Bush outlines foreign policy

Boy held after US school shooting

Memorial for bonfire dead

Senate passes US budget

New constitution for Venezuela

North Korea expels US 'spy'

Hurricane Lenny abates

UN welcomes US paying dues

Chavez praises 'advanced' constitution

In pictures: Castro strikes out Chavez

WTO: arbitration in EU-Ecuador banana dispute

Colombian army chief says rebels defeated

Colombian president lambasts rebels