Doha: disappointment on debt
The conference failed to identify fairer and more effective mechanisms for providing the funds needed to tackle global poverty.
Governments gathered in Doha were reviewing the Monterrey Consensus, an agreement of the international community in 2002, which set out a broad range of principles and proposals for financing development. Although the Doha outcome document affirms Monterrey in general terms, it is weak on specifics.
On debt in particular, the international community has missed a crucial opportunity. With the financial crisis already having a significant impact on the developing world, and a possible new debt crisis around the corner unless serious changes are made, the lack of ambition and imagination expressed on debt is astounding. In detail:
- There is no mention to legitimacy of debt claims - Norway had proposed an amendment to take this into account, but this was not accepted. This represents a failure to move the debt issue from one of ‘charity' to one of ‘justice' and effectively means serious levels of debt cancellation remain limited to the very poorest countries in the world.
- The Monterrey Consensus was clear on the need to explore "mechanisms to comprehensively address debt problems of developing countries, including middle-income countries". We believe this is more urgent then ever, and could be achieved through an independent, fair and transparent debt work-out mechanism. This was strongly supported by the G77 group of developing countries. However, the final text from Doha only speaks of considering exploring a "restructuring mechanism". We regard this to be a step backwards. This weakening was pushed by developed countries including the EU group and the US. As the UN Independent Expert on debt noted in his reaction, "the days of creditors playing prosecutor, judge and jury in debt issues must end."
- We are pleased that the Monterrey Consensus commitment of ‘additionality' is re-stated - that's to say debt relief should not be taken out of aid money - something that the vast majority of developed countries continue to do in practice.
- A major problem of debt cancellation schemes is still the conditions attached to that cancellation. The Monterrey Consensus was very clear that "Debt relief arrangements should seek to avoid imposing any unfair burdens on other developing countries" but the language from Doha is significantly weaker, stressing only "the importance of taking into account debtors' national policies and strategies linked to attaining the internationally agreed development goals". This is again a step backwards, and it remains vital for developing countries to have the space to determine their own ways out of poverty, accountable to their own citizens, and not to bureaucrats in Washington.
One glimmer of hope was the agreement on the need "for a strengthened and more effective intergovernmental structure to carry out the financing for development follow-up" under the auspices of the United Nations. This, in addition to the G20 and UN taskforce processes which are proposing reforms in response to the financial crisis, means that these discussions are far from over. We will be continuing to call for a fair and equitable debt system in the coming months, so that all developing countries can be free from the burden of unpayable and unjust debt.