1 July 2008
analysis
Washington, DC — "In May 1998, 70,000 people from across Britain and the world took part in one of the biggest demonstrations the UK had ever seen: a human chain around the Group of 8 (G8) summit in Birmingham, demanding an end to poor country debt. ... Significant amounts of debt cancellation have been secured for the world's poorest countries, making a real difference to the lives of millions of people in poor countries. .. [But] not all that has been promised has actually been delivered - and further, what was promised was far from enough." - Jubilee Debt Campaign
As G8 leaders prepare to meet in Japan next week, African development, along with global issues affecting Africa, such as climate change and the food crisis, will be on the agenda. But there are serious doubts whether the group of rich countries will deliver on their 2005 pledge to raise annual levels of aid to Africa by at least $25 billion (see http://tinyurl.com/6q4j65) And a new report by the UK's Jubilee Debt Campaign notes that the promises of action on debt cancellation are also still outstanding.
This AfricaFocus Bulletin contains excerpts from the Jubilee Debt Campaign report "Unfinished Business." The full report is available at http://www.jubileedebtcampaign.org.uk
For previous AfricaFocus Bulletins on debt cancellation issues, see http://www.africafocus.org/debtexp.php For information on the campaign in the United States and the current Jubilee Act, see http://www.jubileeusa.org, http://www.afsc.org/africa-debt, and http://www.africaaction.org/campaign_new/debt.php
@@@@@@@@@@@Editor's Picks: Crisis Updates/Background@@@@@@@
Zimbabwe: detailed July 27 election results by province, compared with March 29, plus map of violence
Zimbabwe June 27 Election Report: SADC
http://allafrica.com/peaceafrica/resources/00011577.html
Zimbabwe June 27 Election Report: Pan-African Parliament http://www.africafocus.org/ictexp.php http://allafrica.com/peaceafrica/resources/00011576.html
Zimbabwe: : hunger, terror, displacement and death
by Mary Ndlovu (2008-06-26)
http://www.pambazuka.org/en/category/features/49051
Zimbabwe Solidarity Fund - Africa Action, TransAfrica Forum, Priority Africa Network
http://capwiz.com/africaaction/issues/alert/?alertid=11510781
Previous AfricaFocus Bulletins on Zimbabwe
http://www.africafocus.org/country/zimbabwe.php
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Unfinished business: Ten years of dropping the debt
May 2008
Jubilee Debt Campaign
info@jubileedebtcampaign.org.uk
http://www.jubileedebtcampaign.org.uk
Jubilee Debt Campaign is part of a global movement working for full cancellation of unjust and unpayable poor country debts, by fair and transparent means. It is a UK coalition of around 90 national organisations and 100 local and regional groups, as well as thousands of individuals.
[Excerpts only. The full 44-page report contains 7 chapters, plus appendices and endnotes. The chapters are 1. A brief history of the debt crisis; 2. The debt problem unpacked; 3. The Jubilee movement so far; 4. Promises made, promises kept?; 5 Flawed processes; 6. Debt relief is working; 7 Next stages on the journey ]
Introduction and summary
In May 1998, 70,000 people from across Britain and the world took part in one of the biggest demonstrations the UK had ever seen: a human chain around the Group of 8 (G8) summit in Birmingham, demanding an end to poor country debt.
It was a day that changed the world for millions of people. The issue of debt was catapulted to the top of the G8 agenda, leading to large commitments for debt cancellation. It was a turning point in the ability of ordinary people directly to influence the policies of global financial institutions - and to move towards justice on behalf of the world's poor.
But it was not enough. Ten years later, we look back ...to assess just how far we have - and haven't - come. ...
Continued lobbying and active campaigner engagement around the world over the past decade are cause for celebration; the report highlights some of the key moments on the journey, as well as the main debt deals that have been agreed. Significant amounts of debt cancellation have been secured for the world's poorest countries, making a real difference to the lives of millions of people in poor countries. The impact of debt cancellation should not be ignored: it is a very effective means of tackling poverty.
But the results remain woefully inadequate. Not all that has been promised has actually been delivered - and further, what was promised was far from enough.
There are fundamental problems with the debt relief process: the conditions that have been attached and the delays, stigma and loss of control faced by countries receiving debt cancellation.
Even worse, far too little debt has been cancelled for far too few countries so far. Poor countries are still shelling out more than $100 million a day in debt payments; and for every $1 they receive from rich countries in aid, the developing world still returns $5 in debt service payments.
Jubilee Debt Campaign estimates that over $400 billion of debt must be cancelled for around 100 countries, simply to allow them to meet their people's basic needs. The schemes established for debt cancellation have so far wiped out around $88 billion. Put in simple and very approximate terms, around a fifth of the debt cancellation that would be required simply to meet the basic needs and rights of citizens in poor countries has so far been delivered. On top of this, much of the debt is unjust, originating in irresponsible lending decisions. This debt should be cancelled outright, on the grounds of illegitimacy.
Our demand is the same one that united 70,000 people in Birmingham in 1998. We call for an end to unpayable and unjust debt. We demand:
The cancellation of the unpayable debts - over $400 billion for around 100 poor countries.
A new definition of 'sustainable' debts, in terms of human need, to be used as the basis for cancelling unpayable debts.
The auditing of poor country debts and the cancellation of those that have resulted from irresponsible lending.
The establishment of a fair and transparent process for working out debt disputes.
The participation in debt cancellation processes of those creditors who have been least engaged in the process so far, especially commercial creditors; this would prevent 'vulture fund' activity.
An end to the imposition of economic policy conditions attached to debt relief.
The creation and implementation of enforceable criteria for responsible lending.
It's not a matter of charity. It's a matter of justice.
...
From Chapter 1: A Brief History of the Debt Crisis
The situation today
In the early 1980s, the interest rates on the loans tripled and even quadrupled, causing the debt crisis. While these interest rates have since come down, developing countries continue to be burdened with huge debts which many cannot afford to repay. The total external debt stock (that is, owed to creditors outside the country) of all developing countries in 2005 was $2.74 trillion, with some $514 billion paid back to the rich world that year alone. This consists of: multilateral debt, owed to institutions like the World Bank and regional banks; bilateral debt owed to other countries; and commercial debt owed to banks and private companies.
To repay this debt, poor countries have to forego crucial spending to meet their people's basic needs and to reduce poverty. Debt is one of the main barriers to development in poor countries today. Moreover, successive generations are still paying off odious and illegitimate debts - incurred by loans made to oppressive regimes; to known corrupt officials; for obviously useless or overpriced projects; or granted on unacceptable terms, such as usurious interest rates. These should be cancelled on the basis of their illegitimacy.
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