Eurodad Report: G8 Debt Plan More of the Same

What The Communique Says – And What Civil Society Groups Say:

The deal, as presently agreed, is worth US$40 billion over the next 40 years. A further 9 countries could be included in the plan over the next two years bringing the total cost to US$ 55 billion. The text of the official communiqué reads: “The G8 has agreed a proposal to cancel 100% of outstanding debts of eligible Heavily Indebted Poor Countries to the IMF, IDA and African Development Fund, and to provide additional resources to ensure that the financing capacity of the IFIs is not reduced, as set out in the statement of 11 June.”

This was as expected by debt campaigners however there were fears just before the G8 Summit that support by some members of the G8 for this proposal was shaky. There is therefore some relief that G8 Heads of State have not reneged on the plan announced by G7 Finance Ministers in June but campaigners are very clear that the plan falls far short of what is really needed – and has many flaws.

Stephen Rand of Jubilee Debt Campaign, UK said “this deal is an inadequate response to the global debt crisis, particularly in its failure to challenge the damaging and undemocratic conditions that are consistently attached to debt relief. This [deal] will provide less than US$1 billion per year – the equivalent of less than one dollar per head per year for the people who will benefit – when more than $10 billion a year of debt cancellation is needed to contribute to the ending of extreme poverty.”

In a joint African civil society statement on the Summit’s conclusions, Hassen Lorgat of South Africa’s SANGOCO, a national NGO forum, stressed that “the debt package only provides only 10% of the relief required and affects only one third of the countries that need it. A large component of the US$50 billion pledged is drawn from existing obligations”.

Lidy Nacpil, international coordinator of Jubilee South said, “the conditionalities attached to debt cancellation will exacerbate poverty rather than end it”.

AFRODAD commented: “We continue to question – how democratic is the selection criteria to pick on post completion point HIPCs and, after all, the agreement does not address the real global power imbalances in which debt is just but a conduit of expressing it. We reiterate our position that the debt crisis needs a lasting solution in which all stakeholders – debtors and creditors have a say.”

The plan also falls far short of what the African Union has called for. The draft declaration of the 5th African Union Summit, held from 28 June to 5 July, indicates that African leaders are calling for “full debt cancellation for all African nations” to the tune of US$350 billion – a far cry from the US$40 billion promised by the G8.

Global Call to Action against Poverty (GCAP) http://www.whiteband.org [GCAP gcap-newsletter] Newsletter No. 8 15 July 2005

“The Global Campaign for Action Against Poverty can take its place as a public movement alongside the movement to abolish slavery and the international solidarity against apartheid.”
– Nelson Mandela, Trafalgar Square, February 3, 2005

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