July 2, 2004
Washington, D.C.: As the Bush administration pushes U.S. allies to cancel more than US$120 billion in Iraq’s debt to help boost the country’s economic recovery, a key development group Thursday announced the launch of a three-month effort to persuade the Bush administration to press international financial institutions (IFIs) to cancel the debt of the world’s 50 poorest nations.
Jubilee USA Network, the U.S. chapter of a global coalition, said the tens of billions of dollars the world’s poorest countries owe to the World Bank and the International Monetary Fund (IMF) are making it impossible for them to combat the growing HIV/AIDS and meet many of the other harsh challenges faced by their populations.
The Network’s ‘Countdown to Freedom from Debt’ campaign is aimed at persuading the Bush administration to back a British initiative, unveiled at the Group of Eight (G-8) summit meeting at Sea Island, Georgia, last month, to cancel 100 percent of these countries’ multilateral debt.
The proposal is expected to come up again at the Group of Seven (G-7) Finance Ministers meeting October 1, which coincides with the annual board meetings of the Bank and the IMF, which are celebrating their 60th anniversary this year. In addition to the U.S. and Britain, the G-7 includes France, Germany, Italy, Canada, and Japan which, along with other wealthy European countries, exercise a predominant influence on the two IFIs’ governing boards.
“This is an absolutely critical moment in the struggle for freedom from debt, which is literally bleeding countries in Asia, Africa and Latin America of resources they need to fight AIDS, poverty, and disease,” said Marie Clarke, national coordinator of Jubilee USA Network.
“This summer, the people of faith and conscience that are part of Jubilee USA across the country will be turning up the heat on the White House and Treasury (which represents the U.S. on the IFIs’ boards). The global community needs action on debt, and we have a deadline: October 1st.”
The appeal to cancel the debt, which is supported by dozens of U.S.-based development, humanitarian and church groups, will also be pressed in Congress where a bipartisan group of five lawmakers introduced the Jubilee Act just before the Sea Island summit. It requires the U.S. Treasury to work with other countries to achieve 100 percent cancellation of the debts of 50 nations by the IMF through its own resources and leverage.
Both the Act and the new campaign go beyond the proposal that British Prime Minister Tony Blair brought with him to the G-8 Summit – to make the world’s 41 highly indebted poor countries (HIPC) eligible to receive 100 percent debt relief from the Bank and the IMF at a cost to wealth countries of about $1 billion a year.
Blair had hoped that Bush, who has been pressing Iraq’s bilateral creditors to cancel Baghdad’s debt, would line up strongly behind his initiative. But the U.S. president reportedly balked, as did several other leaders.
Unable to agree, the leaders in the end simply called for the existing HIPC program to be extended through 2006.
But HIPC has been widely criticized, even by IFI officials, as being inadequate. Since HIPC began operating in the late 1990s, only about $30 billion out of some $100 billion in IFI debt has been forgiven for 27 of the 41 countries deemed eligible for relief.
As a result, most of HIPC’s beneficiaries continue to pay more in debt service each year than they spend on health and education, a situation that debt campaigners argue is morally indefensible, particularly because much of the original debt was incurred by western-backed dictators who misspent or, in some cases, embezzled the money.
According to Salih Booker, the director of Africa Action, a Washington-based grassroots group that is also campaigning for comprehensive debt relief, Bush is practicing “an unacceptable double standard when it advocates for the cancellation of Iraq’s odious debts, but refuses to apply the same terms to the illegitimate debts of African countries.”
He added that HIPC has become a “shell game” that has failed to deliver the kind of relief to needy African nations, who make up about three-quarters of HIPC’s clients, they need to both cope with the HIV/AIDS epidemic, which is currently killing an average about 6,000 Africans a day, and create the conditions for sustained economic growth.
The G-7’s leaders did agree that to take up the issue again, and Blair reportedly intends to continue pressing his initiative.
Jubilee, also last month released an appeal for comprehensive debt relief signed by more than 250 U.S. religious leaders and heads of denominations, said it will plans to hold a series of church forums around the country in the lead-up and organize lobbying activities in Congress in the lead-up to the G-7 finance ministers October 1. It also said it intends to hold a series of demonstrations at the Treasury Department through the summer.
Categories: Africa, Odious Debts
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