Jubilee Usa Encouraged By Apparent G-8 Agreement

[Guest Debayani Kar]

As G-8 Finance Ministers concluded their meeting in London, Jubilee USA Network was encouraged today by the apparent agreement reached by the G-8 for 100% cancellation of IMF and multilateral debts for some heavily indebted countries, but insisted all impoverished nations must be included in the deal. Though 18 countries will receive immediate cancellation, the Network demanded that the G-8 also provide immediate cancellation to other impoverished nations without forcing them to implement harmful economic policies as part of the HIPC (Heavily Indebted Poor Countries) Initiative.

 

“The G-8 proposal for 100% debt cancellation for some poor nations to the IMF and other international lenders is an important first step, but the deal must be expanded to include all impoverished countries, not just those eligible for the HIPC Initiative,” said Neil Watkins, National Coordinator of Jubilee USA Network. “Debt cancellation must come without subjecting these countries to devastating economic conditions.”

 

The G-8 agreement for multilateral debt cancellation apparently includes a deal for 100% cancellation of debt to the World Bank, IMF, and

African Development Fund for 18 “completion point” HIPC nations. The proposal would establish an important precedent, long advocated by Jubilee

USA Network, that poor countries must receive 100% cancellation of their debts to multilateral creditors.

 

Jubilee USA Network is concerned, however, that the eligible nations represent only a small portion of the countries that require immediate 100% cancellation; for instance there are 62 low-income countries that need debt cancellation to meet the MDGs, and 50 countries in the JUBILEE Act, a bill Jubilee USA supports in Congress. Many other nations suffer under a burden of odious or illegitimate debt.

 

Jubilee USA Network expressed strong concerns that the use of HIPC Initiative criteria to determine which countries beyond the initial 18 receive debt cancellation is misguided as it requires countries to implement devastating economic policies, that have not been proven to increase per capita income growth or reduce poverty. Jubilee USA called on the HIPC Initiative and harmful economic conditions attached to debt cancellation to be abandoned and all impoverished nations to receive 100% debt cancellation.

 

Jubilee USA Network further notes that action along the lines apparently agreed by the G-8 on impoverished country debt would provide an

important first step towards the Jubilee vision of a world where external debt no longer diverts resources from impoverished people or constrains policy choices. Jubilee USA Network will continue to work for debt cancellation for more countries (such as impoverished countries not included in this deal, middle income countries with large impoverished populations and those with odious/illegitimate debts) and creditors (such as the InterAmerican Development Bank, Asian Development Bank, bilateral, and private creditors) not included in this year's initiative in the years ahead.