G8 must cancel Egypt's unjust debts
Jubilee Debt Campaign has called for all of Egypt and Tunisia’s unjust debts to be cancelled unconditionally, ahead of the G8 discussion on North Africa tomorrow. The campaign group says an immediate moratorium should be called on the debt payments of the two states, all debts should be audited during the transition to democracy and those found to be unjust should be cancelled without conditions. They have also called for the International Monetary Fund not to use the toppling of dictators Mubarak and Ben-Ali to impose ‘free market’ conditions on the North African countries.
Last week US President Obama said “we do not want a democratic Egypt to be saddled by the debts of its past” and called for $1 billion worth of debt relief, as well as new loans and guarantees to the region. Yesterday, the US wrote to the G8 nations calling on them to engage in ‘debt swaps’ with Egypt, allowing their debts to be invested in the Egyptian economy. It is expected that other G8 countries will agree debt cancellation and investment packages at the G8 summit tomorrow.
However, anti-poverty campaigners argue these measures would end up benefiting G8 economies rather than Egypt’s economic development.
Nick Dearden of Jubilee Debt Campaign said today:
“Debts run up by Mubarak and Ben-Ali have too often fuelled misrule, corruption and inequality across the region, being used to buy weapons and other products from Western countries. The people of Egypt and Tunisia should not be made to repay these debts. Unjust debts must not merely be ‘swapped’ allowing those same Western countries to continue exerting control in North Africa, but cancelled outright.
"We are deeply concerned that the ‘debt swaps’ and new loans promised by President Obama, will simply be used to recycle Egypt and Tunisia’s unjust debts, as well as imposing ‘free trade’ conditions on those countries. Inevitably this will be good for the West but bad for the people of Egypt and Tunisia who, after decades of misrule, finally have the chance to control their own economies. New loans would tie the hands of future democratic governments before they have even been elected.”
Key facts on relevant to Egypt and Tunisia’s debt:
- The Egyptian Government’s total external debt is $30 billion. It currently spends $3 billion per year on debt payments. Tunisia owes $15 billion
- Since 1981, Egypt has paid the equivalent of $80 billion dollars in debt and interest repayments
- Hosni Mubarak pillaged Egypt’s economy, and left office with as much as $70 billion in his family’s bank account
- The UK Government claims Egypt owes it £100 million, but won’t own up to what it’s for.
- New loans of up to $6 billion are being offered to Egypt and Tunisia by the World Bank
- The US has said it will guarantee up to $2 billion of bank loans to buy American exports.