Campaigners force step forward on debt

The G8 Finance Ministers, meeting in London today, have announced a deal on multilateral debt cancellation for 18 countries. UK Chancellor Gordon Brown paid tribute to campaigners' efforts, saying "the eyes of the public are upon us".

WHAT THE G8 HAS AGREED:

Debt cancellation for countries reaching 'Completion Point' in the Heavily Indebted Poor Countries initiative. This is 18 countries at present. Another 9 countries may qualify soon, and up to 11 more could do so at some point (though some are unlikely ever to do so). (Click here for more details on the HIPC initiative.) Jubilee Debt Campaign analysis shows that more like 60 countries need debt cancellation to meet the Millennium Development Goals. (See our report In the Balance for more details.)

Cancellation of World Bank, African Development Bank and IMF debts for these countries. Recent statements had not included IMF debt - the fact that the deal does now cover it is a tribute to the determination of campaigners. The IMF debt cancellation is to be paid for out of 'internal resources' - probably including money from a previous sale of IMF gold - and possibly some additional donor contributions.

Additional resources. This had been a sticking point. World Bank and African Development Bank debt cancellation will be paid for out of indebted countries' own aid allocations from the multilateral institutions. However, the G8 has promised to reimburse these institutions. These new contributions will not go just to the countries which have had their debts cancelled, but will be available to all poor countries. This means that debt cancellation for qualifying countries will not be fully funded; but on the other hand there will be some extra money available for other countries.

Debt stock cancellation. The deal writes off debt stocks in full, rather than just temporarily cancelling debt service (as the UK, Canada and the Netherlands had promised to do for some countries already). Campaigners had been calling for this full write-off, to free countries from the ongoing relationship of indebtedness.

A promise to look at Nigeria's debt situation. The communique states that Finance Ministers are "prepared to provide a fair and sustainable solution to Nigeria's debt problems".

WHAT UK CAMPAIGNERS HAVE DONE:

Put pressure on all G7 Finance Ministers through the Wipe Out Debt campaign. We presented the Finance Ministers with 8,000 of your cards at their meeting in February, 13,000 at their embassies on World Debt Day, and another 10,000 as they gathered for dinner last night.

Put pressure on Tony Blair on World Debt Day. Events around the country on 16 May drew attention to the debt issue, and 10 Downing Street received around 8,500 letters and cards calling for debt cancellation.

Put pressure on world leaders by preparing for the biggest mobilisation ever on debt, trade and aid. The G8 knows it faces the prospect of tens of thousands of campaigners gathering in Edinburgh on 2 July to demand debt cancellation, trade justice and more and better aid - while millions watch worldwide.

Forced politicians to acknowledge your impact. Gordon Brown acknowledged the role of debt campaigners in creating today's deal, and stated that Finance Ministers know "the eyes of the public are upon us". Gordon Brown, Hilary Benn and Tony Blair also showed the extent to which they are influenced by debt campaigners in the statements to campaigners they released on World Debt Day.

WHAT IS NEEDED NOW:
We must not sit back now we have had this step forward! There is still more to do to secure the giant leap we need. In particular, we must:

Ensure the deal is delivered. Debt campaigners know that ensuring public statements make a real difference for indebted countries takes continuing pressure.

Ensure an end to economic policy conditions. Today's deal leaves the harmful and undemocratic conditions of the HIPC scheme intact. This is not acceptable.

Ensure all countries that need debt cancellation get it. Jubilee Debt Campaign analysis shows that around 60 countries need total debt cancellation, just to meet the Millennium Development Goals. This is far more than the 18 that are currently getting it, and the 27 likely to. Multilateral debt cancellation for these countries would release over $10 billion per year for poverty reduction, rather than $1 to $2 billion. Those not included in this deal are not getting even bilateral debt cancellation. (See our report In the Balance for more details.)

Ensure unpayable debts to all creditors are included. Even countries that are included are not having all debts cancelled. For instance, the four qualifying countries in Latin America will pay debt service totalling $216 million to the Inter-American Development Bank this year. Some countries also need help tackling burdens of commercial debt.

Come to Edinburgh on 2 July! Campaigners must keep up the pressure on debt, trade and aid by making their voices heard at the Make Poverty History G8 rally.

THANK YOU FOR ALL YOU HAVE DONE!