Debt Relief

Debts of honour

Indifference, interrupted sporadically by spasms of satisfying moral outrage or luxurious compassion, characterises the general Western attitude to the African continent.

Why can’t Africa sort itself out? It has been the unspoken theme of the week following the horrific violence in Uganda and Sierra Leone, and corruption in Nigeria and Zimbabwe. In truth most people are not terribly interested in the answer. Indifference, interrupted sporadically by spasms of satisfying moral outrage or luxurious compassion, characterises the general Western attitude to the continent.

We watch a two minute news item, send a few pounds to Oxfam and feel a glow of virtue. Meanwhile, the way in which the developed West dominates the global financial and trading systems, and continuously manipulates them to its own ends and to the devastating detriment of Africa, is ignored.

Jubilee 2000’s campaign for debt relief is an ambitious attempt to challenge this self-serving blindness. And, contrary to the tirades of its critics in recent weeks, it is working. It has succeeded in putting the issue on the public agenda with a little help from Bono and Muhammed Ali.

Publicity was desperately needed; nothing has penalised Africa more than indifference. When the Paris Club of the world’s richest nations meets behind closed doors to decide how much debt relief to give Mozambique or Uganda, their ruminations have not been disturbed by the thought of hordes of journalists waiting for the press release.

Even the critics help by raising the obvious objection: why give debt relief to corrupt rulers when it only helps them to buy another private jet or marble mansion? The answer is simple: don’t. Uganda has pioneered the alternative: a Poverty Action Fund into which all the money released by debt relief is diverted. Grants are made to health and educational projects supervised by the government, aid agencies and external creditors. Bolivia and Guyana have set up similar schemes.

Money saved from debt relief must go towards relieving poverty or the exercise is pointless. But one final point on the corruption argument: when we are busy jabbing an accusatory finger at Africa, remember to ask who has corrupted the corrupt?

Northern corporations pay bribes to local politicians. The non-governmental agency, Transparency International, has successfully lobbied the US government to impose penalties on US companies that bribe, why can’t the British government do the same?

Shades of the Aitken/ Ayas saga here?

But the most daft jibe is that this campaign is naivety run riot – “it won’t work anyway, so save your breath”. One would hardly describe Lord Lawson, John Major, or Kenneth Clarke as naive, yet all three have played a major international role in promoting debt relief. What they grasped back in the eighties is that the billions of debt were snarling up the world’s banking system.

Debts were not being repaid or serviced and, as they grew, they strangled the ability of countries to develop, trade and buy our products.

Debt was not good for anyone. The Financial Times is not a newspaper known for its bleeding heart, but it has consistently pressed for the problem to be tackled.

And being tackled it is. Debt relief will happen: the only questions are over who gets it and how quickly. The Highly Indebted Poor Countries Initiative (HIPC) in 1996 was a start: it cancelled $1.25 billion of Uganda and Bolivia’s debt in 1998. This year $3.6 billion of Guyana, Mozambique and Mali’s debt should be cancelled.

We want more countries to benefit from the HIPC and more quickly. And the message is getting through; Gerhard Schr der has swung Germany, a long-term opponent, behind speeding up the HIPC and, emboldened by his support, Gordon Brown is going radical: his proposal this week is that $50 billion of debt be wiped out.

Brown has acknowledged that the campaigning work of Jubilee 2000 is creating the public opinion which enables him to raise the stakes for the G8 summit in Cologne in June.

The Guardian, March 6, 1999

Categories: Debt Relief, Odious Debts

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