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G8
Fails to Live Up To Its Promise On Debt Relief By Oliver
Reichardt Just a few days ago on 8 June the Guardian reported that the poorest nations in the world should prepare themselves for an announcement at the G8 summit held on Sea Island of a 100% write-off of their debt. It only took a few days, and the leaders of the world’s richest nations, to crush their hopes. In return for support of Mr. Bush’s plan to write of $90 billion of Iraqi debt, he was prepared to swing behind a UK proposal to cancel the debt of the world’s 42 poorest nations. This would cost much less than the cancellation needed for Iraq. However, instead
we got a promise to extend the HIPC (Heavily Indebted Poor Country) initiative
by another two years and an increase in its funding by US$1 billion. While this is welcome, it even falls short of the ‘topping up’ funding required to bring down the level of debt to the 150% of exports to revenues level that the HIPC initiative regards as sustainable, calculated to be $3.3 billion. This does not include any provision to reach the Millennium Development Goals that the UK chancellor admitted on the July 1 were not just ten years but a hundred years away from being reached. Instead, finance ministers were called to engage in further progress on debt sustainability and Tony Blair was left saying that foundations had been laid for a major breakthrough next year when the UK hosts the G8 summit. In Africa more than 800 million people are living in extreme poverty and a child is dying of Aids every minute, for them, life cannot be simply put on hold for another year.
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