Iraq: Report charts cost of conflict Debt relief

Report charts devastating cost of conflict Debt relief, Iraq and the cycle of bloodshed

The full report can be found at http://www.globalempowerment.org

As US President George Bush lobbies for the cancellation of Iraq's US$134 Billion debt, a new report shows the total debt of 16 of the world's most war-torn countries could be wiped away at much less cost.

The report, An ounce of prevention, from World Vision, analyses the human, social and economic costs of violent conflict in 16 countries where 14 million have died and 19 million people have been displaced over four decades.

Cancel Iraq's debt by all means, World Vision says, but take the next step and cancel the combined debt of these 16 countries, US$84 billion.

The call comes as President Bush is expected to pressure G8 member countries later this month to wipe away Iraq's debt mountain, estimated to total $US134 billion, to facilitate reconstruction. The US move has prompted World Bank president James Wolfensohn to note that any such move on Iraq would trigger a new look at debt relief for all countries (The Guardian, April 20, 2004, p21),.

The report profiles the cost of conflicts that have devastated Sudan, Rwanda, the Democratic Republic of Congo, Lebanon, Cambodia, Angola, Sri Lanka, Somalia, Sierra Leone, Nepal, Liberia, Haiti, Guatemala, Burundi, Afghanistan and Chechnya.

"Many of these countries will struggle to become viable in a post-conflict era while saddled with an unsustainable debt," says World Vision New Zealand's Simon Duffy.

"It's hard enough for any country emerging from conflict to build a functional democracy, but these countries are being asked to carry an extra burden that is just not manageable. If they are not able to achieve a reasonable level of governance and a viable economy within a few years, they risk slipping back into conflict."

"At $20 billion, Sudan's external debt is the largest in the study, and that's far beyond its capacity to repay. Most of these countries don't have anywhere near Iraq's natural resources or human resources in terms of levels of skills and education in the population. Without debt relief, these countries will remain shackled to the constraints of post-conflict economic stagnation without the means to rise to viability."

The World Bank's $25 million Trust Fund for Low-Income Countries Under Stress is a welcome development, says the report, but barely constitutes a drop in the bucket. None of the G8 members meet the OECD's modest investment target for development assistance of 0.7% of Gross National Product. Dr Cullen's budget delivered last week failed to lift New Zealand level of aid from last year's 0.23%, or less than one third of the OECD target.

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