CALL FOR CHANGE 

How the UK Can Afford to Cancel its Share of Third World Debt

Jubilee Debt Campaign & World Development Movement March 2004 

Executive Summary[1]

Jubilee Debt Campaign and the World Development Movement have reviewed the latest data on poor country debts. The results show that, after existing commitments on debt relief are delivered, the 42 HIPC-eligible countries will still be left with a total multilateral debt of $34.9 billion (£18.6 billion). We find that it would cost the UK only £1.3 billion to unilaterally write off our share of this outstanding debt. Spread over the ten-year countdown to the 2015 Millennium Development Goals, that is equivalent to £2.85 per person a year. Other rich nations would face similar costs meeting their share of remaining multilateral debt.

Poor countries must have full debt cancellation – multilateral as well as bilateral – as an essential first step towards meeting the 2015 Millennium Development Goals. It is also the only policy that stands a realistic chance of allowing poor countries the financial ‘fresh start’ that they have been promised. We argue that the UK must commit itself to financing its share of cancelling multilateral debt in support of meeting the MDGs.

Ireland is already backing 100% multilateral poor country debt cancellation. It is time the UK Government acted on its own recent statements supporting more debt relief. Given the current reluctance of some countries to support the proper delivery of HIPC, let alone an extension of its benefits, the UK must not wait for explicit support across the G7/8 before it acts, but lead by example. Aside from the substantial direct benefits, such an example would inevitably expose other wealthy countries to increased domestic and international pressure to follow suit, breaking the logjam that has impeded a resolution of the debt crisis for so long.

Having already committed to cancelling bilateral HIPC debts, the UK should close the deal by cancelling its share of multilateral debts. It would cost the UK very little to do so. It will cost the poor far more if we don’t.