Inter Press Service - September 24, 2004
Emad Mekay

"The amount of money being spent by poor countries on debt repayment is crushing when compared to the size of the health budget in these countries," said Jeffrey Sachs, a special advisor to the United Nations and director of the Earth Institute at Columbia University.

"Full debt cancellation is the only thing that makes sense for these countries."

Sachs was among a panel of activists and economists who held a press conference Thursday to repeat demands for 100 percent cancellation of the debt that is crippling many poor nations' economies. The call comes a week before a meeting for the finance ministers of the Group of Seven (G7) most industrialised nations.

The G7 ministers, meeting in Washington next week, are expected to address proposals for 100 percent multilateral debt cancellation for some 33 poor countries.

Debt is also likely to feature very highly on the agenda of this year's World Bank and International Monetary Fund (IMF) Annual Meetings to be held Oct. 1-3.

Sachs said that poor nations were being forced to divert billions of dollars to rich nations when pressing needs in health and education were going unmet under economic policies mostly promoted by the Western-dominated institutions, the World Bank and the International Monetary Fund (IMF).

"What's happening now is that these countries are being forced to repay their debt and that money is being used to make loans back to poor countries. The World Bank and the IMF need to rip up the debt and insist that the savings go towards programmes that service their people rather than service the debt."

An activist from Zambia said the debt is swallowing huge resources from the African nation. "The country is now deep in debt," said Father Peter Henriot, director of the Jesuit Center for Theological Reflection, a major campaigner for the Zambian debt cancellation movement.

"That debt has bled us for years, funneling many of our resources. The debt level stands at twice the per capita GNP (Gross National Product). This has led to a situation where the country is expending tremendous resources in servicing debt and not servicing people."

Henriot, who lived and worked in Lusaka for the past 15 years, said that the campaigners need the help of rich countries to redirect spending into areas like healthcare and education.

Independent development groups say that AIDS, famine, poor education and corruption ravage poor nations. They estimate that 8,200 people die every day due to lack of access to AIDS drugs alone. Six million people are in dire need of antiretroviral treatment.

The groups say they want Washington to lobby before the meetings to promote the idea.

"The U.S. must use the next eight days to negotiate effectively with G7 countries and the G7 countries must commit themselves on Oct. 1 to most necessary and effective intervention to fight AIDS, which is 100 percent cancellation of debt for all poor countries on the IMF and World Bank's own dime and without harmful conditions imposed by the IMF and the World Bank," said Sharonann Lynch, from HealthGap, a group campaigning for access to AIDS medicine.

But some groups say they are worried that political maneuvering may be behind the idea. Eurodad, a prominent European anti-debt group, said in a statement Friday that details of the U.S. Treasury's proposal for full debt cancellation remain sketchy. They fear that it is more than likely to include full debt cancellation for only a limited number of countries.

Lynch warned that Washington may be floating the idea to get backing for its strategic and political decision to get rich nations to forgive some 120 billion dollars in debts for Iraq.

Eurodad said it is concerned that the Bush administration simply wants to boost its image at home and abroad, achieve debt relief on the cheap while guaranteeing an almost complete write-off of Iraq's commercial foreign debt.

"It is not good enough for the U.S. to make an announcement or float proposals that have sweetened the deal for countries to swallow the consideration of debt relief for Iraq while doing little for impoverished nations battling HIV/AIDS, Lynch said. "In the face of the largest threat to global security, people living with AIDS and their advocates are saying: 'no more half measures."

Jubilee USA, a U.S.-based anti-debt group, says the timing may in fact serve poor nations as the Bush administration may want to score points before the U.S. presidential elections on Nov. 2.

"The fact that the U.S. is putting forth this proposal during the U.S. presidency of the G8 and in advance of a close presidential election race makes this a unique political moment for debt cancellation," said Marie Clarke of the Jubilee USA Network.

"We must have a deal on debt on Oct. 1. A unilateral declaration by the United States will not be enough to carry this through. We hope that the U.S. will do what is necessary to come to come to a consensus with the rest of the G7."

World Bank President James Wolfensohn acknowledged on Thursday that it was getting harder to persuade rich nations to tackle poverty, AIDS and suffering in Africa because of a preoccupation with Iraq and instability around the world. Washington has focused intensely on security concerns since the attacks of Sep. 11, 2001 and has swept many other major issues under the carpet.

"It is hard to get people to focus on these issues when the world is spending 900 billion dollars on defence," Wolfensohn told London's Financial Times.

"What is important is to make people conscious of the fact that the short-term preoccupations with Iraq, Afghanistan and terrorism have to be met," Wolfensohn said. "But we can't lose any time on the medium and long-term issues of poverty and development."

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+Health GAP Global Access Project (www.healthgap.org)

+Eurodad (www.eurodad.org)

+Jubilee USA (www.jubileeusa.org)

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