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in the long term, for the prospects of economic reform more widely in Africa, and for the debt strategy generally. offered to provide $100 million in 1989 (largely additional to the aid programme) on the condition that other donors also made a substantial contribution. At a successful donors' meeting in London on 9 January the required amount was pledged, with large contributions from Japan and the African Development Bank, and useful sums also from the US and FRG. Whether the programme will hold particularly if the oil price falls - remains to be seen. But the UK has gained a good deal of credit both with Nigeria and with fellow creditors. I will spare you an account of the Whitehall infighting, but we could not have done what we did without the Prime Minister's personal support for giving Nigeria a lifeline.
16. Other donors may well seek trade-offs. The Belgians (who did not contribute to the Nigerian package) have been making noises about Zaire. The French are suggesting some specific linkage between French support for Nigeria (only $10 million) and UK support for francophone Africa, especially Cameroon. their chief problem is Cote d'Ivoire, crippled by its insistence on maintaining unrealistically high cocoa prices. It is still too rich to be aidworthy, and is in any case setting its face against the sort of economic reform adopted by Nigeria. We have to resist linkages, not least because ODA simply do not have the money to make new aid commitments.
17. Meanwhile progress continues on implementing the debt concessions agreed at Toronto. So far Tanzania is the only Anglophone among the five to have benefited. But Uganda should join the list this week if it can agree with the Israelis how to treat its claims over the Entebbe airport raid. While we cannot prejudge creditors' views (case by case rules: see paragraph 3 of my last letter), Malawi seems certain to benefit in the next few months. Another likely beneficiary is Mozambique, which has only failed to obtain a concessional rescheduling so far by its refusal to sign bilaterals under the previous agreement unless interest rates are reduced retrospectively. And we have given a sop to the French by joining them in urging Toronto terms for the borderline case of Senegal.
Gorbachev Speech
18. An interesting development since I last wrote was inclusion of proposals for debt relief in the speech Gorbachev made at the UN just before the earthquake in Armenia. The Soviet Union has not lent much to the developing world, except by way of rouble credits to certain protégé states like Mongolia and Vietnam. And his specific proposals were neither original nor very welcome: for example, an increased role for the UN in debt issues. But Nicholas Bayne was struck (on a recent visit to Moscow) by the Soviet emphasis on market mechanisms and the need not to reward debtors for irresponsible policies. We need to
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PERSONAL & CONFIDENTIAL