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Debt cancellation

Keith Parkins | 13.06.2005 15:10 | Analysis | Globalisation | Repression | London

'Give us your fuckin' money', the rallying cry of Live Aid, was again the rallying cry of Live 8, only this time it was aimed at the G8 leaders, not the man in the street. And it seems to have worked.

'It would be very odd if people came to protest against this G8, as we're focusing on poverty in Africa and climate change. I don't know quite what they will be protesting against.' -- Tony Blair, March 2005

'If everyone who wants to see an end to poverty, hunger and suffering, speaks out then the noise will be deafening. Politicians will have to listen.' -- Archbishop Desmond Tutu

'Tomorrow, 280 million Africans will wake up for the first time in their lives without owing you or me a penny from the burden of debt that has crippled them for so long.' -- Bob Geldof

'A step forward, but a faltering step.' -- Noreena Hertz

'The debt deal is very good news for people in the 18 countries that will immediately benefit. But it will do little to immediately help millions in at least 40 other countries that also need 100% debt relief.' -- Romilly Greenhill, ActionAid

'Like most people I want to do everything I can to persuade the G8 leaders to make huge commitments to the relief of poverty and increased aid to the third world. Any squabbles Roger and the band have had in the past are so petty in this context, and if reforming for this concert will help focus attention then it's got to be worthwhile.' -- Dave Gilmour, Pink Floyd

G7 finance ministers meeting at the weekend have agreed a package of measures that includes debt write-off for 18 of the poorest countries, possible inclusion of a further 20 countries. A £30 billion package.

'Amazing' responded Bob Geldof, as no one was expecting it, least of all Geldof. Only a few days before he had said he expected despite his and everyones efforts that the G8 summit would be 'a glorious failure' because world leaders would 'probably not' agree to all his demands on African poverty.

But before we all get too excited, a spokesman for Cafod has described the process like pulling teeth, there is still a long way to go, and what the G7 finance ministers have agreed has still to be agreed by G8 leaders next month at their summit at Gleneagles in Scotland.

That we have got this far is thanks to millions of people across the world, the threat of a million people descending on Edinburgh, and the launch of Live 8 by Bob Geldof.

Bob Geldof: 'A victory for millions of campaigners around the world.'

The dire poverty in which most of the world lives, would not even merit a few column inches in the mainstream media were it not for the Herculean efforts of Bob Geldof, Midge Ure, Bono, and before them Nelson Mandela and NGOs like WDM and Action Aid who are part of the Make Poverty History coalition.

There is much more to achieve. Cancellation of debt was only one item on the agenda of Make Poverty History. We have yet to achieve success on aid and fair trade.

Why is debt cancellation so important? The US has a $3 trillion debt and rising. No one is suggesting the US debt should be cancelled.

The difference is that the US can afford to service its debt, poorer countries can't. The amount that flows out of a poor country in debt servicing far exceeds that which flows in as aid, often several times, the amount that flows out in debt servicing exceeds that which is spent on health and education.

Noreena Hertz:

'The difference is this. The US may be the world's most highly indebted nation, but it can afford to service its loans, for now at least. The world's poorest countries in Africa, Asia and Latin America cannot. Because to do so they have to pay an unacceptable high price, mainly at the expense of their poor or sick. Botswana, in which 40 per cent of adults are now HIV positive, pays more on debt servicing than it can afford to pay on health care or provision. Niger, the country with highest child mortality in the world, continues to spend more on debt servicing than on health. Countries that can't afford to provide basic health care, education or shelter to their people have to use their pitiful resources, including, in many cases, all their aid flows, to repay debts typically racked up by authoritarian, unelected regimes long since gone. Children in Africa die every single day because their governments are spending more on debt servicing than they do on health or education.'

Ethiopia, the target of Live Aid, spends $120 million annually on servicing a debt of $6.5 billion. Coffee accounts for the bulk of Ethiopia's foreign earnings. In 2003, the world coffee price crashed, the result of the World Bank encouraging Vietnam to become the world's second biggest coffee exporter after Brazil, leaving Ethiopia with coffee earnings of less than $200 million, less than half of what it had been only a few years before.

Those who are being forced to repay the debts, are not those who incurred them. They were incurred by corrupt leaders who either squandered the money or squirreled it away in off-shore bank accounts. Too often the indebted countries were pawns in the Cold War, money was showered on them to shore them up or to force them to fight proxy wars on behalf of more powerful countries.

The poor still bear the scars of these past policies.

Corruption is often raised as an excuse not to cancel debt, or that the money once released, will be squandered.

If we look at the US and UK, we see money is still being directed at dictators and other corrupt leaders. Geo-politics, not the needs of the people, still holds sway.

Before we point the finger at Third World corruption, we should look a little closer at our own back yard. Is there a local authority in England that is not corrupt? Local authorities are riddled with corruption, we see this every time planning consent is forced through on behalf of property developers and big corporate interests against the wishes of local people.

If G8 is so concerned at corruption, why has not a single G8 country signed up to the international anti-corruption treaty? Why has not a single UK company involved in bribery and corruption overseas been prosecuted in the UK?

Conditionality ensures that these concerns are addressed. Conditions on openness, transparency, accountability, inclusiveness, something we do not see in local government in England.

In Tanzania, money to be spent is decided at village level, the money is paid into a local bank account, controlled by the village, and the village decides how the money will be spent.

Conditionality should not be used as a vehicle to impose a neo-liberal agenda, to force through privatisation, especially privatisation of basics like electricity, water, health and education.

Where the basics have been privatised it has led to massive price hikes, social exclusion, civil unrest and bloodshed.

Nor should the money released be spent on arms.

Debt at the end of the day is a commodity to be traded as every other commodity. International bankers don't care how the debt gets paid, who pays, so long as they get their cut.

Cancellation of debt is only the beginning.

Debt cancellation works out at around £2 billion a year. We need £50 billion a year in aid.

The amount we pay in aid is minuscule. Each and every cow in Europe gets twice the amount in subsidy as the average African earns as a wage.

We have to stop both subsiding agriculture in the rich countries and stop dumping our artificially created surpluses on the poor countries.

Trade has to be fair, not free. Free trade simply establishes an unfair system where the rich and powerful exploit the poor and powerless.

Fair trade is a move in the right direction, but even more important than fair trade is local food sovereignty.

Should I feel pleased when I see green beans from Kenya on sale in my local supermarket, or concerned that African soil is not being used to grow food for Africans, concerned at the pollution, concerned that the rich are exploiting the poor?

As Bob Geldof has said, this is the beginning, not the end, we still have to meet the targets set on aid and trade justice.

Now is not the time to relax. Millions of campaigners across the world have got us thus far, we now need a million people to descend on Edinburgh to put pressure on the G8 summit at Gleneagles next month.

Commenting in March 2005, Tony Blair could not understand why people would wish to protest about the Gleneagles G8 as it would be ' focusing on poverty in Africa and climate change'. The very reason it was focusing on these issues was the pressure applied by millions of people around the world. The only reason minds will remain focused on these issues will be a million people on the streets of Edinburgh.

Pink Floyd are to reform for Live 8.

A follow up concert to the Live 8 concerts is to be held in Edinburgh. This is likely to feature lesser known acts and acts from Africa.

Websites

 http://www.wdm.org.uk/
 http://www.actionaid.org.uk/
 http://www.makepovertyhistory.org/
 http://www.whiteband.org/
 http://www.live8live.com/
 http://www.resistg8.org.uk/
 http://www.dissent.org.uk/
 http://www.g8alternatives.org.uk/
 http://www.g8blockades.org.uk/

G8 Diary

The G8 meet 6-8 July 2005 at Gleneagles, Scotland ....

18 June 2005 African Answers. WDM conference on African aid, trade and debt at Aston University, Birmingham.
 http://www.wdm.org.uk/

2 July 2005 Live 8.
 http://www.live8live.com/

2 July 2005 Make Poverty History March. March around Edinburgh to encircle the City Centre.
 http://www.makepovertyhistory.org/

3 July 2005 G8 Alternatives Summit, Edinburgh. Counter-conference "Ideas to Change the World" aims to present a serious ideological challenge to the corrupt policies and ideology of the G8.
 http://www.g8alternatives.org.uk/

6 July 2005 Global Day of Action at the opening day of the G8 Summit. Shut down Gleneagles and send a big message to Bush, Blair and his mates. If you can’t make it to Scotland then do something locally on the day.
 http://www.dissent.org.uk/

6 July 2005 Blockade The G8. A series of rural and urban blockades around the area of Gleneagles to disrupt the summit.
 http://www.g8blockades.org.uk/

6 July 2005 Demonstration Against the G8. From Gleneagles Train Station to the entrance of Gleneagles. Let's see how close we can get!
 http://www.g8alternatives.org.uk/

7 July 2005 Peoples’ Golfing Association are planning to host an open golf tournament on the exclusive Gleneagles Golf Course.

8 July 2005 International Day of action on the root causes of climate change. Stop climate chaos - flood the G8!
 http://www.dissent.org.uk/G8climateaction

Reference

Archbishop Tutu Says Debt Deal Must Be Monitored, Reuters, 12 June 2005

Anthony Barnes, Geldof does U-turn on African acts for Live 8, The Independent on Sunday, 12 June 2005

Cautious welcome for G8 debt deal, BBC news on-line, 12 June 2005
 http://news.bbc.co.uk/1/hi/business/4084574.stm

G7 take good first step on debt, more needed, press release, WDM, 11 June 2005
 http://www.wdm.org.uk/news/presrel/current/daleksg7.htm

G8 reaches deal for world's poor, BBC news on-line, 11 June 2005
 http://news.bbc.co.uk/1/hi/business/4083676.stm

G8: Cautious welcome for debt relief package, ActionAid, undated
 http://www.actionaid.org/474/cautious_welcome_for_debt_relief_package.html

Clare Gabriel, Geldof's 'Be with me' Live 8 plea, BBC news on-line, 5 June 2005
 http://news.bbc.co.uk/1/hi/wales/4610971.stm

Bob Geldof, Geldof in Africa, BBC, 2005

Geldof warns over Africa failure, BBC news on-line, 10 June 2005
 http://news.bbc.co.uk/1/hi/uk_politics/4078972.stm

Geldof unveils Live 8 show plans, BBC news on-line, 31 May 2005
 http://news.bbc.co.uk/1/hi/entertainment/music/4594865.stm

GRRRrrr8 – It Ain't, SchNEWS, 3 June 2005

'Head for Edinburgh' Geldof urges, BBC news on-line, 31 May 2005
 http://news.bbc.co.uk/1/hi/scotland/4594905.stm

Noreena Hertz, IOU: The Debt Threat and Why We Must Defuse It, Fourth Estate, 2004

Gill Hubbard and David Miller (eds), The Arguments Against G8, Pluto Press, 2005

Naomi Klein, A Noose, Not a Bracelet, The Nation, 10 June 2005

London Live 8 gig gets 2m texts, BBC news on-line, 13 June 2005
 http://news.bbc.co.uk/1/hi/entertainment/music/4084922.stm

Robin Maynard, Ethiopia - Basket case or organic horn of plenty, The Ecologist, May 2005

Keith Parkins, A sense of the masses - a manifesto for the new revolution, October 2003
 http://www.heureka.clara.net/gaia/democracy.htm

Keith Parkins, Sowing Seeds of Dissent, Indymedia UK, 6 September 2004
 http://www.indymedia.org.uk/en/2004/09/297391.html

Keith Parkins, Seeds of Dissent, September 2004
 http://www.heureka.clara.net/gaia/seeds.htm

Keith Parkins, Future of Food, Indymedia UK, 21 January 2005
 http://www.indymedia.org.uk/en/2005/01/304228.html

Keith Parkins, Make Poverty History, Indymedia UK, 1 February 2005
 http://www.indymedia.org.uk/en/2005/02/304624.html

Keith Parkins, Nelson Mandela in Trafalgar Square, Indymedia UK, 4 February 2005
 http://www.indymedia.org.uk/en/2005/02/304802.html

Keith Parkins, Bob Geldof and Live 8, Indymedia UK, 6 June 2005
 http://www.indymedia.org.uk/en/2005/06/312715.html

Keith Parkins, MPs slag off Geldof, Indymedia UK, 9 June 2005
 http://www.indymedia.org.uk/en/2005/06/312886.html

Pink Floyd reform for Live 8 show, BBC news on-line, 12 June 2005
 http://news.bbc.co.uk/1/hi/entertainment/music/4085966.stm

Steve Schifferes, Fresh hopes for G8 poverty deal, BBC news on-line, 10 June 2005
 http://news.bbc.co.uk/1/hi/business/4077194.stm

Philip Thornton, Campaigners on Verge of Stunning Victory in Battle for Africa Debt Deal, The Independent, 11 June 2005

UK water company kicked out of controversial African water privatisation contract, press release, WDM, 1 June 2005
 http://www.wdm.org.uk/news/presrel/current/biwatertanzan.htm

Ure unveils tartan Live 8 line-up, BBC news on-line, 7 June 2005
 http://news.bbc.co.uk/1/hi/scotland/4616547.stm

Keith Parkins

Comments

Hide the following 3 comments

concerns

13.06.2005 16:04

I just worry that the government will manipulate it as successfully as they appear to have done so far. Their announcement of the '£30 billion package' seems to have been applauded as a victory throughout the media. I've seen little mention though of the fact that this debt relief is linked to compliance with the IMF/World Bank's Heavily Indebted Poor Countries Iniative, a scheme that promotes potentially damaging privatisation and limits on education and health spending. Only once these 'reforms' are carried out can more countries be relieved of their debt. In many ways the bribe is simply being increased to encourage yet more compliance. The effects long term may well therefore be somewhat less worthy of applause.

That said, the event will hopefully raise awareness and attract many new people to the issue. Let's just hope that they aren't sent home happy by what at best is so far a token gesture by the British government and at worst a cynical long term ploy.

Andrew


UN Convention on Corruption

14.06.2005 21:02

"If G8 is so concerned at corruption, why has not a single G8 country signed up to the international anti-corruption treaty?"

They have signed it - but none of them have ratified it.

 http://www.unodc.org/unodc/en/crime_signatures_corruption.html

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