Madagascar receives some debt cancellation
24 October 2004At the end of October 2004, a part of Madagascar's debts to the rich world were cancelled. JDC welcomes this, but points out that until it gets 100% cancellation, Madagascar will still be paying vast sums in debt service. On 20th October 2004, Madagascar became the 15th country to reach 'Completion Point' in the Heavily Indebted Poor Countries (HIPC) initiative, meaning that it received some debt cancellation. This move is very welcome and will free up resources that Madagascar desperately needs for its own people - but it still falls far short of what is needed and what campaigners are calling for. The debt cancelled amounts to $1.9 billion ($836 million in net present value), which will make a big difference to Madagascar. Other countries which have had some debts cancelled through HIPC have been able to increase social spending by around 20%, allowing them, for instance, to abolish primary school fees, introduce free immunisation programmes for children, and improve water and sanitation. However, this debt relief comes at the end of a long process, and still falls far short of the 100% debt cancellation that justice demands and that Madagascar and other countries need. Madagascar is one of the poorest countries in the world: one third of children under five are malnourished, and around one in seven children dies before its fifth birthday. Madagascar's unique eco-system is also under threat. Even after this debt cancellation, Madagascar will be forced to make debt repayments to the rich world of more than $50 million a year, rising to $70 million by 2006. This highlights one of the failings of the HIPC initiative, a process that offers too little, too slowly, with too many strings attached. Madagascar desperately needs and deserves 100% cancellation of its external debts, and Jubilee Debt Campaign is calling on all the G7 governments and the rest of the rich world to ensure that Madagascar and other poor countries receive 100% cancellation, without harmful conditions, as soon as possible.