WASHINGTON - July 8 - As (Group of 8) G-8 leaders concluded their Summit today in Gleneagles, Scotland, Jubilee USA Network, the US arm of the global Jubilee movement, characterized the G-8 deal on debt cancellation as an important and precedent-setting first step, but one that falls short of what is needed to conclusively address the crisis of debt faced by the world's impoverished nations.|
The G-8 Summit, marred by the terrorist attacks Thursday in London, nonetheless produced statements on debt cancellation, increased aid, and climate change. There were no surprises in the agreement on debt announced today; G-8 leaders endorsed the plan their Finance Ministers agreed to in London on June 11. The leaders met amid growing global dialogue and pressure from rock stars, civil society groups, and protestors, all demanding that the G-8 leaders must do much more to address the crisis of poverty in Africa and elsewhere.
"While the G-8 agreement is a step forward and sets an important precedent we have long advocated of 100% cancellation of debt to multilateral creditors, our campaign for freedom from debt for impoverished nations has only just begun," said Neil Watkins, National Coordinator of Jubilee USA Network. "We will continue to build pressure on G-8 nations to cancel debt for all impoverished countries and countries in crisis, without devastating economic conditions."
Jubilee USA Network is concerned about statements by some governments indicating that the G-8 debt deal would effectively end the debt crisis faced by impoverished nations. While the debt agreement adopted by the G-8 this week in Gleneagles would cancel 100% of 18 impoverished countries' debts to the International Monetary Fund (IMF), World Bank, and African Development Bank, it excludes other impoverished nations and debt to other significant creditors such as the Inter-American Development Bank, does not address odious and illegitimate debt, and preserves economic conditionality.
Jubilee USA Network has produced a 14-page analysis of the G-8 debt agreement, entitled "First Step on A Long Journey: Putting the G-8 Deal on Debt into Perspective." The report highlights the benefits of the G-8 debt agreement, while detailing its limitations, and provides recommendations of next steps.
Some of the key findings of the Jubilee USA analysis:
- Debt Cancellation Will Save Lives. The agreement, in addition to setting the important precedent of 100% debt cancellation for some nations to some creditors, will release close to $1 billion annually in resources poor nations can use for development. Already the Zambian government has said it will use debt relief proceeds to provide Anti-Retroviral drugs to 100,000 HIV/AIDS patients.
- The G-8 Plan Includes Too Few Countries. The 18 countries that qualify immediately represent less than a third of countries (at least 62) that need full cancellation to meet the internationally agreed Millennium Development Goals (MDGs), which seek to halve extreme poverty by 2015. The $40 billion to be cancelled by this agreement represents less than 10% of debt cancellation required for nations to meet the MDGs. The plan does not include middle-income countries that are heavily indebted and impoverished. The African Union called earlier this week for all African nations to receive debt cancellation; the G-8 agreement applies to only 14.
- The G-8 Plan Contains Onerous Conditions. The economic policies mandated by the HIPC Initiative will continue under the G-8 debt agreement, including privatization of government-run services and industries, increased trade liberalization, and budgetary spending restrictions. These policies have not been proven to increase per capita income growth or reduce poverty as documented by both World Bank and civil society economists. Jubilee USA and social movements call for these conditions and policies to be abandoned.
Jubilee USA Network notes that the G-8 debt agreement is an important first step towards the Jubilee vision of a world where external debt no longer diverts resources from impoverished people or constrains policy choices. But building on the agreement, Jubilee USA Network will expand its campaign in the years ahead to work for debt cancellation for more countries (such as impoverished countries not included in this deal, middle income countries with large impoverished populations and those with odious/illegitimate debts) and creditors (such as the Inter-American Development Bank, Asian Development Bank, bilateral, and private creditors) not included in this year's initiative.
Jubilee USA Network is the US arm of the international movement working for debt cancellation for impoverished nations. Jubilee USA is a network of over 70 religious denominations, labor groups, environmental organizations, and community and advocacy groups working for freedom from debt for countries in Africa, Asia, and Latin America.