Debt Relief

Brown proposes tsunami debt moratorium

Gordon Brown has reiterated his call for a new form of Marshall plan to deliver “a once in a generation opportunity” to eliminate global poverty.

Mr Brown, in a keynote speech setting out Britain’s plans for the presidency of the Group of Eight leading industrial nations, proposed an immediate moratorium on debt repayments by nations affected by the Asian tsunami disaster.

The chancellor, determined to keep development high on the G8 agenda, sought to use the example of tsunami relief as an example of how “closely and irrevocably” the nations of the world were bound together, tying “the fortunes of the richest persons in the richest country to the fate of the poorest persons in the poorest country of the world even when they are strangers and have never met.”

A new Marshall plan

Mr Brown outlined three key elements of his proposed new Marshall plan, the US programme of economic aid for the reconstruction of Europe after the Second World War:

• A “final historic step” in delivering full debt relief for debt burdened countries;

• Implementation of “the first world trade round in history that benefits the poorest countries and ensures they have the capacity to benefit from new trade”;

• Organising a new international finance facility to offer immediate, long term aid for investment and development. “This would raise an additional $50bn a year each year for the next ten years, effectively doubling aid to halve poverty,” Mr Brown said.

Justice for Africa

Mr Brown reiterated his determination to make Africa a priority. “To those who say Africa should remain patient, the reply now comes from Africa: 150 years is too long to be patient. 150 years is too long to wait for justice,” he said.

Key points:

• This year the richest countries “should match bilateral debt relief of 100 per cent with the bold act of offering 100 per cent multilateral debt relief – relief from the $80bn of debt owed to the IMF, the World Bank and the African Development Bank.”

• The cancellation of debts owed to the IMF “should be financed by a detailed plan and timetable we now agree to use IMF gold.”

• Countries “should make a unique declaration that they will repatriate their share of the World Bank and the African Development Bank’s debts to their own country. “

Reforming world trade

Mr Brown also called for a liberalisation of world trade to help poorer countries. He said the richest countries should agree “to end the hypocrisy of developed country protectionism by opening our markets, removing trade-distorting subsidies and in particular, doing more to urgently tackle the scandal and waste of the Common Agricultural Policy – showing we believe in free and fair trade.”

Financial Times, January 6, 2005

Categories: Debt Relief, Odious Debts

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