Marshall Plan for Africa a 'pipedream' unless debt wiped out

As Chancellor Gordon Brown presented his package of proposals on Third World debt and a 'Marshall Plan for Africa' at a speech in Edinburgh this morning [06 January 2005], Jubilee Debt Campaign challenged the UK and other rich governments to finally Wipe Out Debt in 2005, not least as a vital step towards ending what the Prime Minister, at his simultaneous press conference, called 'a man-made preventable tsunami every week in Africa'.

Jubilee Debt Coalition Coordinator Ashok Sinha said today, 'Through its magnificent response to the Asian tsunami the UK public has demonstrated its overwhelming desire to tackle extreme poverty and hardship. We challenge the Prime Minister and Chancellor to act on this deep popular concern and use the UK's chairmanship of the G8 this year to wipe out third world debt in 2005 and so end the scandal of poor countries being forced to pay £30 million a day in debt repayments to the rich world while their own people are devastated by both natural and preventable disasters. Unless this happens, a long-term Marshall Plan for Africa will be nothing more than a pipedream.'

Jubilee Debt Campaign makes this call one month before the G7 finance ministers meet in London (4-5 Feb), under Gordon Brown's chairmanship, to consider his proposals on debt relief. The onus is on this group to urgently find the resources necessary to cancel 100% of the unpayable debts owed by the poorest countries to World Bank and IMF, as well as deliver 100% cancellation of bilateral debts.

As a result of receiving tens of thousands of postcards from Jubilee Debt Campaign supporters, the Chancellor has already committed the UK to funding cancellation of its share of the debts of a range of poor countries to the World Bank. Today, he rightly urged other rich governments to do the same, as well as agree a debt moratorium for countries hit by the devastating Asian tsunami.

However these proposals, whilst welcome, are not enough. A debt moratorium falls far short of the cancellation needed to support long-term reconstruction in tsunami-hit countries, let alone tackle the pre-existing crisis of poverty experienced by many of them even before the waves struck. And the wider proposals will not constitute "the final historic step in delivering full debt relief", promised this morning by Mr Brown to all the world's poorest countries, unless he and the rest of the G7 agree to:

• full cancellation now: there must be rapid and irreversible 100% cancellation of all unpayable debts, by fair and transparent means. The Chancellor's proposal for full relief on debt servicing by poor countries until 2015 - the date when the Millennium Development Goals must be met - is a step forward, but insufficient by itself.
• new money: rich countries must not fund debt cancellation from existing aid commitments, but use IMF gold and contributing whatever new money is needed to make up the balance. The UK has promised some new money, but other governments have not yet done so.
• an end to harmful conditions: creditors must stop attaching harmful strings - such as enforced privatisation of basic services or cuts in public spending - to desperately-needed debt relief. Mr Brown's proposals do not address this.

***ENDS***

CONTACT
Ashok Sinha, Coordinator, Jubilee Debt Campaign, 020 7324 4722 or 07905 139 140 or ashok@jubileedebtcampaign.org.uk

NOTES

1. Jubilee Debt Campaign is working with campaigns around the world to call for debt cancellation in 2005. Campaigners worldwide will be targeting the embassies and consulates of G7 countries on Tuesday 18 January, demanding an end to debt.
2. Jubilee Debt Campaign and Jubilee Scotland are running a WIPE OUT DEBT campaign in 2005. Campaigners are sending postcards and emails to the G7 Finance Ministers. The first delivery will be at their meeting in London on 4 February.
3. Follow the link for Jubilee Debt Campaign's full demands for debt cancellation.
4. In 2005, the UK has an unprecedented opportunity to influence the international agenda on tackling poverty, as it will be chairing the G7 Finance Minister meetings in February and June and the G8 summit in July, and taking on presidency of the European Union from July. In recognition of the importance of these opportunities, Jubilee Debt Campaign is playing a central role within MAKEPOVERTYHISTORY, a unique coalition of campaigns, charities, unions, faith groups and celebrities demanding action on debt, trade justice and aid.
5. The original debts of the world's 52 poorest and most indebted countries amounted to $375 billion. The G7 / 8 has promised to cancel $100 billion of this, and has actually cancelled $46 billion. Follow the link for more facts and figures on debt.
6. 42 countries are eligible for the current international debt relief scheme (the Heavily Indebted Poor Countries [HIPC] initiative). G7 countries, the World Bank and the IMF have promised to cancel all the bilateral debts and 65% of the multilateral debts of these countries - subject to a number of unfair economic policy conditions such as privatisation of public services and caps on social expenditure. They have not, however, pledged sufficient funds to realise these promises or eliminated these damaging conditions.
7. The UK has pledged an additional £100 million to fund cancellation of 10% (calculated as its 'share') of the debts to the World Bank and African Development Bank of countries that complete the HIPC scheme (15 at present) and other countries that meet their criteria of 'reforming economies'.