Brown calls for "full debt relief"

UK Chancellor Gordon Brown has called on all rich countries to "take the final historic step in delivering full debt relief" in 2005. Jubilee Debt Campaign is calling him and the other G7 Finance Ministers to live up to this promise, and use their influence next year to wipe out debt.

As a result of receiving tens of thousands of postcards from Jubilee Debt Campaign supporters last year, Mr. Brown had already promised cancellation of the UK's share of the debts being paid to the World Bank by a number of the world’s poorest countries. In a speech on 6 January, he built on this and plans for a debt moratorium for countries hit by the devastating Asian tsunami, with a call for 100% debt cancellation for the world's poorest countries as part of a "new deal between the richest countries and the poorest countries". You can take action now to put pressure on Gordon Brown and all the G7 Finance Ministers to ensure this becomes a reality.

UK proposal for debt cancellation
Mr Brown is now seeking the support of other rich countries for a proposal which includes:

100% multilateral debt cancellation for countries which have already completed the Heavily Indebted Poor Country (HIPC) initiative, as well as for a number of other poor countries;

use of IMF gold reserves to fund 100% cancellation of the debts these countries are paying to the IMF;

creditor governments to provide extra money to fund 100% cancellation of the debts these countries are paying to the World Bank and African Development Bank;

this cancellation to cover all debt payments until ‘at least’ 2015.

This does not offer everything Jubilee Debt Campaign is calling for. But it is the first time any G7 government has ever suggested a 100% cancellation of debt payments for poor countries, for any period of time. It also marks an open acknowledgement that HIPC, the current international debt relief scheme, is grossly inadequate and that many countries, given the needs of their own people, cannot and should not be making any debt payments. Other powerful governments are also beginning to acknowledge that, despite previous promises, they have not done enough on debt.

Limits of the UK proposal
What is on offer is still not enough. For instance, the cancellation proposed is time-limited, not permanent, and creditors are still attaching harmful and unjust economic conditions to debt cancellation. Nor – although the UK has promised some new money – have rich countries collectively committed anything near all the funds necessary to live up to their promises and wipe out unpayable poor country debt. But this sea change in attitude – and increased action – is hugely significant, and a clear tribute to the determination of debt campaigners over many years. It indicates a real chance for a breakthrough in 2005 – provided we redouble our efforts to press the G7 to turn their words into concrete action.

What can we achieve now?
These developments come at the start of a year of huge opportunities. Jubilee Debt Campaign's immediate aim is to ensure that all G7 governments agree to and find funds for 100% debt cancellation. Our first opportunity to achieve this is at the G7 Finance Ministers’ meeting in London on the 4th and 5th February. Please send a WIPE OUT DEBT action card or email before the end of January. However, if the breakthrough does not come then, we have other opportunities to build pressure, through World Debt Day on May 16th, the next G7 Finance Ministers’ meeting in early June, and of course the G8 summit in Scotland in July.

Please follow the link to see what more you can do in 2005.

Beyond 2005
We have a huge opportunity for a massive breakthrough on debt in 2005 – but it is unlikely that the whole crisis will be solved at once. If the G7 countries agree a deal based on the current UK proposal, we will still need to campaign for a permanent wiping out of debt – offering the fresh start demanded by the Jubilee movement –not just cancellation until 2015. We will still need to call for an absolute end to the destructive and unjust conditions imposed by HIPC. And we will still be calling for debt cancellation for all countries that need it, including those poor countries currently receiving no debt relief, such as Bangladesh and Nigeria.

In the longer term, we must ensure that we never return to a debt crisis like the one which has now been crushing poor countries for decades: it must be recognised that ‘odious’ debts, incurred by oppressive regimes, should not be repaid; an open, just and impartial arbitration process is needed to judge which debts countries cannot and should not pay; and the rich world should ensure that poor countries have sustainable financing to meet their needs, through an increase in aid and a bias towards giving grants not loans.

Now we are focused on seeing what we can all achieve by acting together in 2005 to take advantage of the amazing opportunities that public support for debt cancellation has created.