Debt cancellation for poor countries
29 June 2005
Debt cancellation for poor countries: Time for a full and fair deal
The Jubilee Aotearoa Debt Action Network has welcomed the announcement by Aid Minister, Hon Marian Hobbs that the New Zealand government will contribute to the cost of cancelling the intolerable burden of debt for some of the world’s poorest countries. But Jubilee continues to call for a fairer deal on debt, for debt cancellation to be extended to a wider group of countries, and for funds for debt cancellation to be additional to existing aid budgets.
“The government has done the right thing by supporting the latest G8 debt proposal,” said Jubilee spokesperson Peter Zwart. “But it is time for New Zealand to start taking a lead in calling for a fairer deal for all poor countries crippled by debt. This initiative will impact only 18 countries in the first instance but many more are in desperate need of immediate cancellation to end some of the human suffering.”
The government has announced that it will support a proposal from the G8 Finance Ministers to cancel the debt owed by 18 heavily-indebted poor countries to international financial institutions like the International Monetary Fund and the World Bank. This means that New Zealand will pay a share of the money owed by developing countries to the World Bank.
“It appears that New Zealand’s contribution to debt cancellation will come from money already budgeted for overseas aid. Jubilee believes that contributions to debt cancellation must not come at the expense of existing aid budgets,” Mr Zwart said.
As a member of the Make Poverty History coalition, Jubilee Aotearoa says that debt cancellation must go together with more and better aid and trade justice if the poorest countries are to substantially reduce poverty in line with the United Nations Millennium Development Goals. New Zealand’s aid level is already low by international standards, and the government should find additional money for debt cancellation rather than taking it from money already budgeted for aid.
Jubilee urges the government to push for debt cancellation to be extended to all countries that need it to achieve the Millennium Development Goals. It is believed that this means cancelling 100% of debt for over 40 other poor countries in addition to the 18 covered by the G8 proposal. Poor countries should also not have to meet conditions such as privatisation and removing protections for domestic industries in order to qualify for debt relief.
“A fair go for poor countries means cancelling 100% of debt without harmful conditions so that money can be spent on health, education and other social priority areas,” Mr Zwart said. “Jubilee Aotearoa calls on the government to make a strong case for further debt cancellation at all international meetings.”
Jubilee Aotearoa is made up of the Anglican Social Justice Office, Arena, Caritas Aotearoa New Zealand, Christian World Service, Council for International Development, Development Resource Centre, Latin America Committee, Oxfam New Zealand, Student Christian Movement, Tear Fund, Trade Aid, and World Vision and many concerned individuals. Its website is: www.debtaction.org.nz
Make Poverty History is a campaign by a wide range of New Zealand organisations calling for New Zealand government action on trade justice, dropping the debt, more and better aid, and ending child poverty in New Zealand. It is part of an international mobilisation to end poverty, and events are planned around the country for the first international day of action on Friday 1 July. See www.makepovertyhistory.org.nz
The Millennium Development Goals are a series of United Nations targets such as halving extreme poverty and hunger by 2015.
A report by the Jubilee Debt Campaign UK, ActionAid UK and Christian Aid calculates that at least 62 developing countries will require 100% debt cancellation in order to meet the Millennium Development Goals. See “In the Balance: Why Debts Must be Cancelled Now to Meet the Millennium Development Goals” at www.jubileedebtcampaign.org.uk/?lid=659
New Zealand’s overseas aid for 2005-06 will be 0.27% of Gross National Income. This is well short of the UN target that developed countries should give 0.7% of national income in aid, and is also significantly below the donor average of 0.42% of national income.