Japan threatens to withhold aid, if...

Japan has warned that it will withdraw all aids and grants to Ghana if the government applies for the Highly Indebted Poor Countries (HIPC) package being proposed.

The Japanese Ambassador to Ghana, Mr Hiromu Nitta, disclosed this in Accra yesterday. He was contributing to a discussion of a paper on the topic, "Eliminating World Poverty : making globalisation work for the poor," delivered by the visiting British Secretary of State for International Development, Ms Claire Short.

The address, which was based on the new British White Paper on International Development, committed the British Government to the internationally agreed targets to half world poverty by 2015. It also looked at implications of globalization on world development, and in particular, at how it can be harnessed to reduce extreme poverty.

Mr Nitta stated that Japan was against the HIPC strategy and had categorically made its position clear to the Ghana government. He said that Japan would not extend aid to any country which would join the HIPC.

"This has been communicated to the government. The Japanese Ambassador raised these points after the British Secretary of State suggested that Ghana should join the HIPC to boost the country's economy and offer her people an escape from poverty.

The HIPC package, according to her, is an open poverty reduction strategy in which Ghana will get the opportunity to receive about 200 million dollars of debt relief this year in order to re-direct funds for development.

The Ghana government has already indicated that it is assessing the total debt situation in order to arrive at a decision on the HIPC initiative.

Various economic experts have repeatedly asked the government to put Ghana first in its final decision in view of the fact that Japan, the largest donor to Ghana, is set against the HIPC while the United Kingdom, Ghana's colonial partners, see the HIPC as the panacea to Ghana's debt problems.

Ms Short said that there were about 42 sub-Saharan African countries currently signed up for the HIPC, adding that "going for the HIPC will be a beneficial path for Ghana to solve her numerous debt problems and fuel subsidy."

She said that Ghana, which had achieved some level of success in democratisation, was a potential asset and needed to join the level of achievers in reforms to reduce poverty.

According to her, the problem of fuel prices should be addressed systematically in order not to destroy industry, while monies spent on debt servicing, which was more, should be re-directed to providing education and health.

On poverty reduction, Ms Short said that poverty and inequality was the main problem facing the world. "There is no future for the rest of the world if some areas remain poor, the consequences will come back to affect the developed countries," she said.