The government line

The UK government has responded to campaigners who have contacted them about the conditions attached to debt relief, as part of our ongoing Cut the Strings! campaign. Below is Jubilee Debt Campaign's comment on their response.

For further details, please see our Cut the Strings! report.

"Significant progress has been made on debt cancellation"
True! There has been recent progress on debt cancellation – notably the 'Multilateral Debt Relief Initiative' (MDRI) which came out of G8 agreements in 2005 – prompted by the determined action of campaigners creating strong pressure for change. This initiative is not perfect – see our briefing for more details on the good, the bad and the ugly of the agreement – but it is significant for some countries. Funds released through this cancellation are already being used to train teachers, build roads, and provide emergency food supplies. This cannot blind us, however, to ongoing problems with undemocratic and damaging conditions.

"There are no new policy conditions attached to the MDRI"
There do not need to be ‘new’ conditions: the existing ones are bad enough! In order to qualify for MDRI, countries still have to meet all the conditions set down through the Heavily Indebted Poor Countries (HIPC) initiative. These are a grave cause of concern, including requirements such as spending restrictions for Malawi – a country that has been experiencing famine and an AIDS pandemic – or a requirement for Gambia to privatise its groundnut industry – which the government had already tried, before declaring this a "disaster" and renationalising. The conditions in HIPC are undemocratic and damaging: MDRI not only leaves these intact, but reinforces them by making yet more debt relief dependent on them.

"The UK government recognises concerns about the use of conditions attached to debt relief and aid"
The UK has been one of the countries in the forefront of questioning the kinds of conditions attached to debt relief and aid: but it needs to go further for this to make a difference on the ground. In early 2005, the UK changed its policy about the conditions it attaches to the aid it gives directly to poor countries: encouragingly, it said it would not attach economic policy conditions to aid, and explicitly recognised that it is "inappropriate and has been proven to be ineffective to impose policies". Yet the World Bank and IMF are still attaching exactly these same conditions to debt cancellation and aid, and using them to impose policies. The UK must back up its words with stronger persuasion.

"It is important to ensure aid is used effectively for the use of poverty reduction [and that] it is not misused through corruption"
We, and particularly the campaigners in indebted countries with whom we work, are extremely concerned that all funds are used effectively, and not misused through corruption – but that is not what these conditions are doing, as the UK has recognised in its policy on aid conditions. On the contrary, some conditions force countries to cut back spending, when what they really need is to invest more in health, education, and other vital services. The best way to tackle corruption is through promoting openness and supporting efforts to make governments accountable to their own people, not supporting the current system of conditions where decisions are made behind closed doors, without involving – and regardless of the views of – parliaments and citizens.

"The World Bank has now abolished its practice of prescriptive conditionality… the IMF follows conditionality guidelines that emphasise the importance of country ownership"
The World Bank and IMF, with encouragement from the UK and certain other governments, have reviewed their conditions recently. But their new guidelines are not strong enough: they do not, for instance, prohibit economic policy conditions, and there is strong evidence that they are not anyway making a difference on the ground. A new report by Jubilee Debt Campaign member ActionAid, based on extensive interviews with World Bank staff and detailed case studies in Uganda and Pakistan, concluded that the guidelines "have not led to the required change in the World Bank’s attitude, policies or activities." Meanwhile, the IMF guidelines on 'country ownership' are simply not good enough. The attitude of the World Bank and IMF seems to be that 'ownership' is something to be created after a policy is chosen for a country, by encouraging that country’s government to embrace and implement the policy dictated to them.

It is true that the UK government has taken some action on conditions – including most recently by withholding £50 million in funding from the World Bank until there is evidence of progress in reforming conditions. Whilst this is a very important symbol, it is still only 3% of the UK’s latest allocation of funding to the World Bank and is so far being dismissed by the Bank hierarchy. The UK must put much more pressure on the World Bank and IMF – including by withholding further funding – in order to ensure an end to externally-imposed conditions attached to debt cancellation. New guidelines and expressions of concern will mean nothing if poor people are still having their livelihoods devastated and their ability to hold their governments to account undermined, because of policies imposed from outside.