Don’t falter on the Debt Deal
26 September 2005
Don’t falter on the Debt Deal
“So often in the past the rights of poor people have been lost in lengthy pronouncements and vacuous promises but this time we are hoping for a breakthrough that delivers,” says Gillian Southey, a spokesperson for Jubilee Aotearoa, in response to the latest announcement on debt relief for poor countries.
The International Monetary Fund (IMF) and World Bank annual meetings over the weekend decided to implement the debt cancellation agreed at July’s G8 meeting in Scotland. Jubilee is hoping that final agreement from the executive boards of these two institutions will be forthcoming in order to deliver the promised deal into the hands of the people who need it most.
If the pledges made at the G8 meeting are met, 18 countries will have 100% of their debts to the IMF and World Bank cancelled. This debt cancellation may be extended to other poor countries in future, but debt campaigners have shown that at least 60 countries need 100% debt cancellation in order to meet international poverty-reduction goals.
It appears that the G8 debt deal will not impose new conditions on countries receiving debt cancellation. If this is the case, it will be a welcome change from previous debt relief under the Heavily Indebted Poor Countries initiative, which has been dependent on countries meeting conditions such as cutting protection for their industries and privatising water or other essential services. These conditions have directly harmed poor people.
“The commitments made by G8 leaders were not huge and given the depth of suffering in some of the world’s poorest countries not very substantial, but they acknowledge the harmful affects of World Bank and IMF policy over the last 60 years and their inability to deal to poverty,” she adds.
Jubilee Aotearoa is campaigning for debt cancellation that will enable the world’s poorest countries to spend much-needed money on providing health care, educational opportunities and other measures to eradicate poverty rather than repaying loans to rich creditors.
“Despite opposition from within the IMF and World Bank, it is imperative that these institutions find the money to cancel the debt now. They have access to billions of dollars and the IMF holds substantial undervalued gold reserves. Money and balance sheets are not the point. It is people’s lives that matter and with a child dying every three seconds from poverty there is no excuse for this hesitancy,” she says.
- The external debt of low-income countries is $523 billion. For every $1 received in grant aid, low countries pay $2.30 in debt service (Jubilee UK)
- Jubilee Aotearoa is a coalition of agencies and individuals campaigning for debt cancellation for the most indebted poor countries and for an end to loans made on the condition that a country follows economic advice that further impoverishes the poorest people.
It was formed in 1997 and supported the signing of the international petition calling for debt cancellation to mark the new millennium. The petition was signed by 24 million people of whom 63 847 were New Zealanders. Jubilee Aotearoa is campaigning for deeper debt cancellation as a strategy to enable people to escape poverty. www.debtaction.org.nz