Ken Livingstones's speech to the Commonwealth Local Government Conference, 14th September 2000

Check against delivery.

“This is all easy to say, but of course it needs money. Sadly, for many local government organisations in the poorer countries of the Commonwealth the money available is greatly reduced by the huge burden of debt repayments that those countries face.

Local government in the developing world plays a vital role in the provision of health care, education, and clean water. Yet the crippling and scandalous burden of debt repayments greatly undermines the ability of local government to play its role in tackling the terrible poverty that still exists.

Working on an initial assumption that local authority expenditure is around 20 per cent of total government spending, the figures show that in 52 heavily indebted poor countries, if foreign debt payments are were made, $5 billion (£3 billion) per year in additional resources would be available to local government. This diversion of funds away from local needs accounts for the desperate state of local services in many developing countries.

What is more, in many cases one of the first things to be cut back under structural adjustment programmes agreed with creditor agencies are often crucial public services, even though these are already under severe strain from lack of funding.

Let us put this in context. For the developing world as a whole, the total debt has reached a staggering £1.7 trillion, and for every £1 given in aid by the west, £13 is paid back by developing countries in debt service.

The United Nations Development Programme estimates that each year 7 million children die as a result of the debt crisis. 13 children a minute. In the time it has taken me to say this, a child has died..... now another..... now another.....

The impact of this debt on the work of local government has been acknowledged by a growing number of local authorities in the UK, and elsewhere, and already the aims of the Jubilee 2000 campaign have been formally endorsed by the cities of Bristol, Manchester, Edinburgh, Glasgow, and Birmingham, amongst many others, and also by Rome. I want to add London's name to that list.

London is one of the most diverse cities in the world, and for a great many Londoners world debt is not an abstract discussion, but something all too real, touching the lives of their families and friends around the world.

Take just two countries with important ties to substantial communities in London: Bangladesh and Jamaica. Both countries pay over $600 million each year to western creditors and the IMF and World Bank.

Over 30 per cent of the Bangladeshi population lives on less than $1 a day, yet it spends as much on debt relief as on health care. In Jamaica one quarter of the population still live on less than $2 per day and poverty and inequality are fuelling increasing levels of crime.

It is important that the leaders of the developed world's increasingly diverse cities recognise the inextricable links between their communities and communities suffering from the burden of debt. A key part of my approach to international relations will be to work closely with the Bangladeshi and Jamaican communities in London, to support their campaigns for debt cancellation, as we develop our relationships with Dhaka and Kingston.

In addition, in developing the partnerships between London and New York, Paris, Berlin and Tokyo I will be urging my counterparts there to press their governments for a real and immediate change in approach to this issue.

To date, despite the rhetoric, the creditors' response to this crisis has proved to be more about spin that substance. The leaders of the G8 countries announced in a blaze of publicity at the Cologne Summit in June 1999 that they had agreed to boost the potential debt relief on offer to the “Heavily Indebted Poorest Countries” - which don't even include Bangladesh and Jamaica – to $100 billion.

In fact, so far less than $11 billion of that total has actually been cancelled – and all of that had already been cancelled before the Cologne summit. And then, just a couple of months ago, the Okinawa summit failed to take the opportunity to opportunity to provide a fresh start, whilst itself costing an obscene $750 million.

Creditor governments need to recognise that their response to the debt crisis has been pitifully inadequate, and that it is time for them to radically re-appraise their current strategy. Four simple actions need to be taken by the creditors as they prepare to meet at the IMF and World Bank meetings in Prague at the end of this month.

1. All creditors, without further delay, must fulfil the obligations they agreed at the Cologne Summit in June 1999 in order to deliver the $100 billion offered then.
2. Creditors, including multilateral institutions, who have not yet made a 100% cancellation pledge must do so now to show they are serious about helping the people in the poorest countries.
3. Creditors should open the process of debt cancellation to countries not currently covered by the HIPC initiative but which are nevertheless impoverished and indebted – such as Bangladesh and Jamaica.
4. The international community, including lenders and borrowers alike, should consider urgently the case for a new process for dealing with debt and lending such as a debt review body overseen by the United Nations – one option put forward by Jubilee 2000.”