Next step on debt secured after frantic negotiations
25 September 2005The debt cancellation deal proposed by the G8 in July has now been endorsed by all shareholders of the World Bank and IMF. Now we must ensure it is rapidly implemented - and build on the momentum to secure more desperately-needed debt relief, without harmful conditions. The deal proposed by the G8 Finance Ministers in June and supported at the G8 summit in July offers 100% cancellation of outstanding debts to the World Bank, IMF and African Development Fund for 18 impoverished and heavily indebted countries. The meetings of the World Bank and IMF at the weekend endorsed this proposal, and ministers and officials were insistent that all countries had agreed to this cancellation, and to pay their share of the financing it requires. But we will need to continue monitoring the deal carefully to ensure that it is rapidly and fully implemented. Jubilee Debt Campaign welcomed the deal as a small step, but good news for those living in eligible countries and a tribute to campaigners. Evidence shows that debt cancellation has a positive impact, enabling countries to spend their own money on their own people's needs - in health, education, and infrastructure. Both UK Chancellor Gordon Brown and World Bank President Paul Wolfowitz explicitly acknowledged the role played by public pressure and concern for debt relief.
It is significant that the deal includes 100% cancellation of some debts for some countries. For years, campaigners have been insisting that some debts must be wiped out in full - but until now, governments have always resisted this call, and focused instead on debt reduction or rescheduling. So this precedent is an important one. However, even after the G8 announcement, the deal was far from secure. All countries with shares in the World Bank and IMF had to agree and some had raised objections - particularly over whether the deal was fair to all poor countries, whether the G8 would really provide their share of the financing, and also because some wanted to make poor countries jump through more hoops to qualify. We recognise that the UK government worked hard to resolve these differences - and we are glad that the deal has now been agreed.
But it is not over yet. The quarter of a million campaigners who took to the streets of Edinburgh in July want total cancellation of all unpayable and unfair debts - not just some debts for some countries. And rich goverments must still tackle the huge problem of damaging conditions attached to debt relief, which force poor countries to cut spending, liberalise trade or privatise basic services in return for debt cancellation. So to all who have been calling so loudly for debt cancellation - including lobbying of the G8 this year: well done! And let's keep going.
NB The 18 countries which currently qualify for relief are:
Benin, Bolivia, Burkina Faso, Ethiopia, Ghana, Guyana, Honduras, Madagascar, Mali, Mauritania, Mozambique, Nicaragua, Niger, Rwanda, Senegal, Tanzania, Uganda and Zambia.