PRESS RELEASE: 

EMBARGO: Monday 2 September 2002, 00:01


DEBT RELIEF WORKS BUT SUCCESS UNDER THREAT, FINDS NEW REPORT

In a major new analysis of the impact of debt relief on African countries, Jubilee Research at the New Economics Foundation today launches a new report: Relief Works.

The report shows that 

• In countries granted debt service relief, education spending has risen from $929 million (or less than the amount spent on debt service) to $1306 million - more than twice the amount spent on debt service. 
• Spending on health has also risen from $466 million (or less than half of debt service payments) to $796 million - 30% more than debt service. 
• Despite concern from critics of debt relief, spending on the military has not increased beyond the average of 2% of GDP 

Jubilee Research director, Ann Pettifor, one of the co-founders of Jubilee 2000, says: 'This report reflects the great achievements of a world-wide peoples' campaign to achieve justice for debtor nations. Critics of debt relief tend to argue that it simply supports corrupt regimes or gives governments more money to spend on defence. But our research shows that relief has been used well; and is leading to greater investment in health and education - not the military.' 

However Relief Works - African proposals for debt cancellation and why debt relief works also demonstrates that much more debt cancellation is necessary, if the proposals made by Presidents Thabo Mbeki and Obasanjo, are to be implemented. In their NEPAD document, these presidents call for debt payments to be limited to a 'proportion of budget revenues'. Research undertaken by the New Economics Foundation shows that if this measure is used, then at least another $100bn debt must be cancelled.

The report underlines that:

• Social spending is still desperately below what is needed to meet the Millennium Development Goals - especially on health
• New debt is already being piled up - even in those countries that have had full debt cancellation, like Uganda. Projections show their debt levels will increase over the coming years

Romilly Greenhill, author of the report says: 'Unless western creditors provide the debt cancellation called for by African leaders, the NEPAD proposal is bound to fail. If this happens, what has been described as the 'best chance in a generation to do development differently' will be just one more squandered opportunity. 

'It would be devastating for those countries if the international community fails to follow the leadership offered by African presidents in NEPAD, and act to end this inhumane system of punishing the poor for their poverty.' 


Notes to Editors:

Copies of the report Relief Works can be obtained from the New Economics Foundation, by calling 020 7089 2856, or emailing jessicabp@neweconomics.org

The full report is also available online here.

Contacts:

In South Africa:
Ann Pettifor
(m) ++ 27 828 581 116
Romilly Greenhill
(m) - ++ 27 (0)72 495 2573

In UK:
Jessica Bridges Palmer
(w) 020 7089 2856
(m) 07789 515520