Europe

Third world debt may soon lose the spotlight

Campaigners vow to keep on fighting after Jubilee 2000 shuts shop.

UK – There will be bureaucrats within the World Bank and the International Monetary Fund counting down the days to the end of the year when Jubilee 2000, the coalition calling for the forgiveness of third world debt, finally shuts up shop.

The UK-based lobby group has harried the two international financial institutions for more than five years to give the world’s indebted countries a break. Human chains around World Bank and IMF meetings and the support of high-profile figures like Bono and the Pope has taken debt from being an obscure backroom issue to front page news. On Monday the lead singer of the band U2 met Bill Clinton at the White House and with religious leaders and senators urged the US to forgive its share of third world debts.

The campaign has achieved some breakthroughs: last year the Group of Seven leading industrialised countries agreed that the existing plan for managing third world debt was slow and inadequate. They promised deeper, speedier debt relief at their Cologne summit in June last year.

But in less than 100 days, the main focus of the debt campaign will shut up shop. Jubilee 2000 has no plans to become Jubilee 2001, even though its leading lights admit their campaign objective of achieving the cancellation of unpayable third world debt is far from won.

There were some crumbs of comfort yesterday for campaigners disappointed by the lack of progress on debt forgiveness at last week’s meetings of the World Bank and IMF.

Britain has found a further £100m of third world debt to write off, buried in the books of the Commonwealth Development Corporation, the state-owned development financing body which Labour plans to privatise.

The CDC debt is small beer, however, in comparison to what remains to be done on debt more than a year after the G7’s pledge. The bank and the IMF claimed they had made progress in Prague: they have agreed to bend the strict conditions poor countries have to meet to qualify for the west’s loans reduction package, to help get 20 countries on to the programme by the end of the year.

But even if the two bodies manage to fast-track 10 more countries over the next three months, the original pledge was to get 24, not 20 countries into the programme. And campaigners argue that the G7’s debt deal is too limited: headline promises of 100% debt cancellation apply only to debts owed to individual western countries. The bulk of the debts are owed to the World Bank and the IMF and will be cut rather than written off, leaving many countries still paying more in servicing debt than they do on health and primary education.

Cracks appear Privately, insiders in the bank admit the holes in the present debt deal are beginning to appear. Crashing commodity prices and the rising cost of oil is hitting the indebted countries of sub-saharan Africa the hardest, undermining the two financial institutions’ estimates of what is sustainable debt.

The IMF’s figures show that some countries will be paying more on debt servicing after the G7 debt deal than before. But the bureaucrats argue that it took so long to mobilise support for the current deal even if it is flawed that going back to the drawing board is out of the question.

As the deadline set by the G7 looms larger, so does Jubilee 2000’s self-imposed deadline. The time limit on the call helped to give Jubilee’s campaign its edge, however, the down side is that the coalition cannot extend its mandate to a further round of campaigning without losing its credibility. The debt campaign’s leaders – representatives from the faith groups and aid agencies which fund the umbrella body – are determined to stick with the original deadline despite opposition from within the coalition. “You can’t turn a sprint into a marathon,” says Adrian Lovett, Jubilee 2000’s deputy director.

But developing country campaigners feel they are being abandoned by their northern partners with the job not even half done. The response from the coalition is that campaigning on debt will not end with Jubilee: the members will keep the campaign going.

“The World Bank, the IMF and the G7 would be making a big mistake if they are banking on the pressure disappearing after Jubilee 2000 shuts down,” says Justin Forsyth, head of policy at Oxfam, one of the coalition members. Unluckily for the G7, the venue for their meeting next year is Genoa. The Italian debt campaign is well organised and has papal backing, and unlike this year’s G7 meeting in Okinawa, it is within striking distance for Jubilee’s committed supporters.

The question now is who will rally them. The aid agencies want to move on from debt, which they argue was just a symptom of the problems facing poor countries in the global economic system rather than a cause of poverty. They will continue to work on debt issues, but without the name of Jubilee, keeping supporters in touch and organised will be more difficult.

But it would be unwise for the World Bank and IMF staff to celebrate too soon. Jubilee 2000 may be about to fold up its tents but the heirs to grassroots opposition it rallied will be carrying on the fight.

Charlotte Denny, Guardian Unlimited, October 4, 2000

Categories: Europe, Odious Debts, United Kingdom

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