Leaders of indebted nations hold London debt summit

Leaders of indebted nations will meet in London this week to discuss how to press the case for debt reduction, after the failure last month of the G8 summit to agree on action, Nigerian President Olusegun Obasanjo said on Monday in Abuja.

Speaking after a meeting with visiting Venezuelan President Hugo Chavez, Obasanjo said "about five" Third World leaders from the Group of 77 Nations (G77) would hold a "post-mortem" of the Group of Eight summit held in Okinawa last month. The leaders are expected to include President Mbeki of South Africa and Prime Minister Pattison of Jamaica. The meeting will take place in London on Wednesday 23^rd to Thursday 24^th August.

"Next week, about five of us are meeting in London for a day and a half to reflect on what has happened and do a post-mortem and assess the situation ... and what will be the next line of action," President Obasanjo said.

President Obasanjo travelled to Japan for a special meeting with G7 leaders the day before their own summit commenced in Okinawa. President Obasanjo attended the meeting in Tokyo as a representative of the Group of 77 nations together with President Mbeki of South Africa and the leader of Algeria (representing the OAU) and the Prime Minister of Thailand (representing UNCTAD). They strongly pushed the case for 100% cancellation for the poorest countries, but at the Okinawa Summit the G8 leaders failed to make any progress on debt cancellation and even backtracked on their promises.

President Obasanjo said he was disappointed with the outcome of the Summit, but said, "we are not giving up." Citing the case of Nigeria's debt, he said much of the foreign debt now ascribed to Nigeria is illegal and that the case still needed to be made on the immorality of the debt crisis.

He said: "All that we had borrowed up to 1985 or 1986 was around $5 billion and we have paid about $16 billion yet we are still being told that we owe about $28 billion. That $28 billion came about because of the injustice in the foreign creditors' interest rates."

"If you ask me what is the worst thing in the world, I will say it is compound interest."

He held out the hope that progress could be made with the G8 because "the fact that these people are saying essentially the right thing is good because you can hold them to they are saying, when the time comes.

“I don't believe the idea should be confrontational. The idea should be to make our case and collectively," he said. "We must realise that we are not as weak or as powerless as we think. Individually we are, collectively we are not," he said. He called on developing nations of Latin America, Africa and Asia to work together concertedly on the issue of debt relief, adding "where there is anything like luke-warmness in some countries we should work against it because we should swim together otherwise we sink separately."

He also challenged leaders of the indebted nations "to put our own houses together. We have to be seen to be doing the right thing in terms of the management of our affairs, politically, economically and socially."

"Then we will be able to say that, yes, if we get debt reduction, if we get debt cancellation, we are going to use the money properly, we are going to use the money to alleviate the poverty and suffering of our people, we are not going to siphon the money into Swiss banks."