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West urged to cancel $400bn of poor countries’ debt

A further $400-billion of debt relief for the world’s poorest countries is needed despite a decade of progress, the Jubilee Debt Campaign warns on Friday.

The group’s latest report calls on the G8, World Bank and International Monetary Fund to cancel $400-billionn of debt, which it says is ”unpayable” and an obstacle to the battle against global poverty.

The report, called Unfinished Business, says that the global debt crisis is not over, despite about $88-billion having been cancelled over the past 10 years.

Launched 10 years ago, the Jubilee 2000 campaign used the turn of the millennium to highlight the problem of developing-world debts, many of which were run up by corrupt dictators such as Mobutu Sese Soko in Zaire and Ferdinand Marcos in the Philippines who whisked the money away into Swiss bank accounts.

The report condemns the west’s refusal to cancel this ”odious” debt, which accounts for about $500-billion of the total developing world debt stock of $2,7-trillion.

Moreover, it warns that the crisis could get worse unless the global lending system is fundamentally reformed, with lenders sharing in the responsibility for poor lending decisions.

Nick Dearden, director of the Jubilee Debt Campaign, said: ”Ten years after debt was first put on the international agenda, developing countries are still giving $5 in debt repayments to the rich world for every $1 they get back in aid.

”But cancellation alone is not enough. The subprime mortgage collapse is proof that as long as all of the responsibility for bad loans is placed entirely on the borrower, it is always the poorest that will pay for bad lending decisions. Reform of the lending system is essential if we are to create a world without poverty.”

The $88-billion cancelled has mostly been achieved by the World Bank’s heavily indebted poor countries initiative, which has granted debt relief to 23 countries, with many more going through a process that involves them producing concrete plans to spend the debt relief on projects such as their citizens’ health, education and welfare.

British Development Secretary Douglas Alexander said: ”The human chain around the G8 summit in Birmingham 10 years ago put the debts owed by the world’s poorest countries at the top of the international political agenda.

”We can all be proud that progress has been made. At Gleneagles, under the UK’s G8 presidency, we secured full multilateral debt relief worth over $100-billion since 2000. That means countries can invest in health, education and infrastructure, and progress towards the millennium development goals. I am proud that the UK led the way in these commitments and proud that we are going even further.”

Zambian MP Given Lubinda said the burden of debt was real. ”My life has been associated with wailing mothers, daughters and sisters burying their people who go to their early graves due to lack of medical care, due to destitution. The majority of my fellow citizens live from day to day without hope for their future. They have suffered the pangs of hunger, diseases and ignorance for more than five decades while my country has suffered the burden of debt.”

The report will be launched at Journey to Justice, an event called to celebrate the 10th anniversary of the Birmingham human chain. It will take place on Sunday and feature speakers from around the world, and messages of solidarity from British Prime Minister Gordon Brown, Archbishop Desmond Tutu and Ellen Johnson-Sirleaf, the President of Liberia.

Jubilee Debt Campaign is a UK coalition of more than 70 national organisations, including ActionAid and Christian Aid, and 100 local groups. – Â

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