AWARENESS
debt in detail
The world’s most impoverished countries are in a debt crisis. Even though they have already repaid far more than they originally borrowed, poor countries are still forced to pay over $100 million EVERY DAY to the rich world in debt repayments, rather than spending the money on vital healthcare and education.
The UN estimates that more than 7 million children die unnecessarily each year, from diseases that can be prevented or cured and from unclean water that could be made safe. Many poor countries are paying more in debt servicing than they can afford to spend on education or health. If money which poor countries pay to the rich world in debt service was spent instead on tackling poverty, the lives of millions of children in poor countries would be saved.
Following the G8 summit in Gleneagles debt campaigners welcomed the establishment of the principle of cancelling 100 per cent of the debt owed to some multilateral institutions. But the deal proposed by the G8 leaders is an inadequate response to the global debt crisis. Their proposal will provide less than $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.
Major issues on debt remain unresolved. The first is the damaging economic policy conditions attached to debt relief; we support demands that the indebted countries should account transparently to their own people and to their creditors as to how they spend their debt cancellation money, but they should have control over their own economic policies and not be forced, for example, to privatise, cut government spending and reduce tariffs. The second issue is the many indebted countries not on the list; the current proposal reaches only 18 of the more than 60 countries urgently needing debt relief. Finally, there are many debts not covered by the proposal, as the proposed deal applies only to debts to the World Bank, the International Monetary Fund and the African Development Bank.
Therefore, there is much more work to be done - not least, first, to ensure that the deal is ratified in September and then that it is delivered.
Determined campaigning over a number of years is having a clear impact. There have been several steps forward in the last ten years; and this is down to campaigners like you! British Chancellor, Gordon Brown, acknowledged that the G8 deal happened because campaigners had made debt "a crucial public issue", and forced Finance Ministers to recognise that "the eyes of the public are upon us". But we need more! We need to build on this to ensure we do not lose the momentum to wipe out debt.
To find out more, visit www.jubileedebtcampaign.org.uk