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G8 debt relief: neither progress nor a breakthrough
by Jubilee South Africa
Monday, Jul. 15, 2002 at 10:33 AM
The G8's announcement of $1 billion in debt relief represents neither progress nor a breakthrough on debt relief. "The announcement is proof that the International Monetary Fund's debt relief initiative has failed" said Neville Gabriel, spokesperson for Jubilee South Africa. The G8 are only trying to catch up on empty promises made three years ago at the Cologne summit for $100 billion in debt relief in terms of the Highly Indebted Poor Country (HIPC) debt relief initiative.
"To date the HIPC initiative has only cancelled one-fifth of the promised total. Yet four African countries will pay more in debt service after HIPC debt relief and five countries will pay just as much as they did before," said Gabriel. The new announcement is intended to provide extra relief to those countries that will not see any real reduction in debt servicing after HIPC debt relief, due to tumbling international commodity prices. This shows that the HIPC debt relief system will not work.
"100% debt cancellation is required for Africa to meet the Millennium Development Goal of halving poverty by 2015. Debt sustainability should not be measured according to export earnings, as HIPC does, but according to how much government revenue is left after poverty eradication programmes have been costed. Tinkering with the debt relief mechanism by topping up its trust fund will not solve the problem - it's ridiculous" he said.
The early announcement ahead of tomorrow's meeting with African leaders attempts to create the impression that the G8 are being generous to Africa. This is an early warning sign that they do not plan to offer much to African leaders tomorrow.
NOTE TO EDITORS: The four countries that will pay more debt service after HIPC are Mali, Niger, Sierra Leone, and Zambia. The five countries that will pay just as much as now are Ethiopia, Guinea-Bissau, Hunduras, Nicaragua, and Uganda.
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