The G8 stand still on debt when a giant leap is needed
8 July 2005The G8 summit at Gleneagles has ended with the leaders simply endorsing the debt cancellation deal proposed by their Finance Ministers last month. While Jubilee Debt Campaign had welcomed this deal as a small step forward, we were urging the G8 leaders to go much further. Please follow the links to read the official Jubilee Debt Campaign statement in response to the G8, the demands we had been making of them, and our original response to the G8 Finance Ministers' proposal. The deal essentially offers full cancellation of outstanding debts to the IMF, World Bank and African Development Bank for 18 poor countries, of which 14 are in Africa. Other countries can qualify in future by completing the Heavily Indebted Poor Countries initiative. But it is an inadequate response to the global debt crisis, particularly in its failure to challenge the damaging conditions consistently attached to debt relief. The proposal - which still has to be endorsed at meetings of the World Bank and IMF - includes some important steps forward, which are a tribute to the efforts of campaigners. In particular, we welcome the fact that some countries' debts to some multilateral institutions have been cancelled in full for the first time. Campaigners have long been calling for 100% cancellation, and have long been told that it was not possible. This deal establishes the principle that it can. We also welcome the inclusion of IMF debts in the deal, which is a tribute to campaigners' determination that it should not be excluded. We also welcome the positive language on measures to ensure that money stolen by corrupt former regimes is returned from banks in the North to poor countries, to use for the benefit of their people. However, the deal falls short of campaigners' demands, and there is much further to go. In particular:
- the proposal reinforces the damaging and undemocratic conditions attached to debt relief, which include forcing countries to privatise public utilities, liberalise trade, and cut spending on social services.
- many indebted countries are excluded from the countries which will benefit.
- the deal does not cover all debts: for instance, debts to the Inter-American Development Bank, which are a huge burden on poor countries in South America, are not included.
- the proposal will provide less than $1 billion per year - the equivalent of less than one dollar per head per year for the people who will benefit - when more than $10 billion a year of debt cancellation is needed to contribute to the ending of extreme poverty.