Tsunami debt relief welcome but insufficient
30th December 2004
Jubilee Debt Campaign welcomes the indication from some creditor countries that they will cancel or suspend debt repayments from countries hit by the devastating tsunami on 26 December 2004 – but points out that most of these countries could not afford to pay all their debts even before the horrific disaster.
In countries where preventable poverty was killing thousands daily even before the waves struck, debt cancellation – 100% debt cancellation for the poorest of these countries – was already necessary. Debts must be dropped – but there will still be a need for substantial emergency aid to deal with the impact of this disaster and prevent it claiming even more lives.
UK Chancellor [Finance Minister] Gordon Brown, German Chancellor Gerhard Schroder and others have called publicly for at least a temporary halt to debt repayments by some of the countries devastated by the disaster. Proposals will be discussed at the next meeting of the 'Paris Club' - an informal group of creditor countries which meets behind closed doors to discuss debts owed to them by poor countries – on 12 January. They have also been put onto the agenda of the G7 Finance Ministers' meeting being chaired by Mr. Brown in London at the beginning of February.
Indonesia is the most indebted of the countries that bore the major impact of the tsunami. A 2002 report by the European Network on Debt and Development (Eurodad) calculated that, taking into account essential spending on poverty and human development, Indonesia could afford only half of its annual debt repayments (which totalled $37 billion), and that half should therefore be cancelled. Other countries affected by the tsunami – including Somalia, Tanzania, Kenya and Bangladesh – are among the poorest and most indebted in the world, and need 100% cancellation of all their debts (via a process that ensures proceeds are used in a transparent and accountable manner) if they are to escape from the crushing poverty which has been forced on them.
Ashok Sinha, Jubilee Debt Campaign’s Coordinator, said, ‘This week’s tsunami has shown the horrific and devastating impact of unpreventable natural disasters – and the public’s desire to help. But every week an entirely preventable, man-made disaster kills even more people. Every day, 30,000 people around the world die from poverty . We can stop this. If all those now generously donating money to help the tsunami victims also come together to demand that the world’s most powerful countries drop the debt, end injustice in international trade, and deliver more aid more effectively over the long term, then we can MAKEPOVERTYHISTORY in 2005 and save millions of lives all across the poor world.’
Please also see www.makepovertyhistory.org for more information.
Total external debts of countries hit by the tsunami: