No debt cancellation at World Bank meetings

The October meetings of the IMF, World Bank and G7 Finance Ministers have promised only 'further consideration' of debt cancellation. But, after vocal campaigning, the meetings saw 100% debt cancellation discussed for the first time, raising real hope of a breakthrough in 2005.

Hopes of a deal on 100% debt cancellation at this meeting were not met. But, thanks to campaigners, the ground has shifted a long way and the real progress is being made. Only a few years ago, no government was taking these proposals seriously; but powerful governments are now doing so, showing the strength of the debt campaign and what it can achieve. The UK Chancellor [Finance Minister] Gordon Brown spoke after the meetings of a "growing consensus" around 100% cancellation. With the UK hosting the G8 summit in Scotland in 2005 - and with the debt campaign as strong as ever - there is a real hope that comprehensive debt cancellation could be agreed next year.

Background to the meetings

In the last few weeks before the annual meetings of the World Bank and IMF, held in Washington DC in early October, momentum for 100% debt cancellation built rapidly. The US Government, for the first time, floated a proposal to cancel 100% of the debts for up to 42 countries in the Heavily Indebted Poor Country (HIPC) initiative - although the proposal envisaged a reduction in aid budgets in order to fund debt cancellation, meaning that it did not include any new resources for poor countries.

Thank you to all of you who took action by email, urging UK ministers to turn this proposal into one that included additional resources. Gordon Brown rose to campaigners' challenge, and proposed a 100% cancellation of debts owed to the IMF by a number of countries funded through revaluation of IMF gold, thus leaving aid budgets intact. The UK furthermore set an example to other countries by promising - just a week before the meetings in Washington - that it will commit up to £100 million per year to pay its 'share' of the debts owed to the World Bank and African Development Bank by around 30 poor countries. These exciting developments are a tribute to the efforts of Jubilee Debt Campaign supporters, who have been vociferously demanding just this through our Call for Change campaign. Having created this opportunity, we must now take action to persuade other rich governments.