TOPICS: Third World’s continuing debt crisis
Just weeks after its launch, Tony Blair’s fledgling Africa Commission, which aims to find ways of solving the problems of the continent, has already come under fire for missing the whole point of Africa’s main problem - debt.
The London-based pressure group the World Development Movement says the Commission, which was launched at the end of February, is an unnecessary diversion from real action to help Africa and condemns the UK Government for its continued failure to cancel Third World debt. The world’s poorest nations owe the richer hundreds of billions of dollars - famously for every $7 the developing world receives in aid it pays $90 back in debt repayment and in the five years since the G8 meeting in Cologne, Germany, when UK Finance Minister Gordon Brown called for wholesale debt relief, little has been done.
Debt repayment for poorer nations inevitably means diverting already scarce resources away from health-care, education and poverty reduction programmes, which only aggravates a situation often already blighted by corruption, political instability, poor harvests and HIV/Aids. Mr Brown did not mince his words in Cologne when he said poor country debt was the single greatest cause of poverty and injustice across the globe. It deprived millions of the chance of a future he said. He said the developed world must cut the debt of the world’s poor nations, and added, in a rhetorical flourish ‘...and cut it now’.
His empassioned call to arms to the world’s rich to help the world’s poor followed the IMF and World Bank’s 1996 HIPC (Heavily Indebted Poor Countries) debt relief initiative and pre-dated the UN’s year 2000 decision to target, as one of its Millennium Development Goals, the year 2015 as the time by when the number of people living in extreme poverty should be halved.
Under the HIPC scheme, debts are not cancelled but written down to the point where repayment is judged by the World Bank/IMF to be sustainable. In practice this has worked out at about one and a half times expected yearly export earnings. 42 countries are included in the HIPC initiative but today, eight years on from its launch, only 13 of the original 42 have had any relief and, for some, what relief there has been has not gone very far.
Ashok Sinha, co-ordinator of the London-based Jubilee Debt Campaign, criticises the one and a half times earnings framework as arbitrary. ‘What’s needed is a full write-off of unsustainable debt.’
Export earnings are notoriously erratic say campaigners. Uganda, for instance, one of the first countries to get relief, has seen the benefit wiped out by falling coffee prices. To keep up the pressure on creditor nations ahead of the G8 meeting scheduled for early next month (8/9 June) in Savannah, Georgia, the Jubilee Debt Campaign in the UK is organising World Debt Day on 16 May. In the UK campaigners will be taking to the streets and, in conjunction with its US counterpart, Jubilee USA, are organising a letter-writing campaign urging George Bush and Tony Blair to put debt cancellation at the top of the Savannah agenda.
Sunday was chosen because it marks the sixth anniversary of the G8 meeting in Birmingham, when 70,000 people linked arms to symbolise the links in the chains of debt slavery. — The Guardian, London