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  Issue No 85 Official Organ of LaborNet 23 February 2001  

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Economics

Debt Dumping Campaign Enters New Phase

By Thea Ormerod

The millennial deadline might have passed, but Jubilee 2000 is not giving up the fight for debt cancellation for the world's fifty-two poorest countries.

 
 

It started out as a time-limited campaign with its deadline being the end of the year 2000. It did achieve a string of promises from the world's creditor countries, but in practical terms only a fraction of the targeted US$370 billion was written off by the end of last year.

The appalling situation continues where 19,000 children die each day as a result of their countries' debt burdens (UNICEF), while US$60 million flows from poor to rich nations in interest payments. Impoverished countries have generally paid back three or more times the original amount their leaders borrowed, yet are still four or five times more in debt than they were in 1980, because of compound interest. In the meantime, a child born in heavily indebted poor country is more likely to die before their fifth birthday than to attend a secondary school. Taking a broader view than the very poorest fifty-two countries, half the world's population has an average daily protein intake less than a typical American house cat.

Thus the fight continues, with Jubilee 2000 re-committing and re-badging itself in various ways around the world. The Australian campaign will be known as Jubilee Australia. It held a very successful re-launch in Sydney's Parliament House on Tuesday, February 20th. The re-launch was attended by Laurie Ferguson MP, by representatives of numerous aid agencies including APHEDA, unionists, Bishops and the Dr Rufai Soule, the Nigerian High Commissioner, as well as public supporters.

Jubilee's greatest achievement has been an enormous groundswell of global public opinion which is now unstoppable. The largest petition ever gathered, the mass rallies, together with the voices of Kofi Annan, the Pope, Desmond Tutu, Bono, Bob Geldoff, and numerous economists like Jeffrey Sachs are becoming more and more difficult for creditors to ignore.

In Australia the campaign has had its own victories. It has now won the support of the ALP as well as the Democrats and the Greens, and boasts our largest ever foreign policy petition of 457,000 signatures. It persuaded the Federal Government to promise cancellation of debts owed by Nicaragua and Ethiopia once these countries qualify for debt relief under the international debt relief program known as the Heavily Indebted Poor Countries Initiative (HIPC).

Nicaragua's debts were thus written off in January, but Ethiopia has yet to qualify. Until Ethiopia does qualify, Australia continues to collect from Ethiopia A$2 million a year, an amount which could go a long way there towards famine relief. It is bizarre that our country committed less to famine relief with one hand last year than we collected with the other hand in debt repayments.

Campaigners want to see Australia forgive the debts of a number of other desperately poor countries, or at the very least to place the money we collect into trust funds ear-marked for poverty alleviation in the debtor countries concerned. Other debtors to Australia include Nepal, Vietnam, Bangladesh and the Philippines which collectively owe us around A$390 million. This may sound like a lot of money, but in practice the cancellation of these debts would amount to about the cost of a cappuccino per Australian per year.

We also want the Australian Government to work towards a fair and transparent international process for negotiation of poor country debts, a process in which debtors and creditors have equal say in outcomes and one which is open to input from civil society.

The current process has creditors acting as judge, jury and party to debt negotiations, and these are largely held in secret. The "golden rule" operates - those who have the gold, make the rules. Thus the HIPC Initiative requires debtors to strictly follow structural adjustment programs for a number of years before any meagre debt relief is offered. Nations are required to stop protecting their primary industries, cut expenditure in health and education, devalue their currency, exploit their natural resources to the maximum in order to export and earn hard currency to pay off debts. Then when debt relief eventually comes through, qualifying countries are frequently still forced to pay more on servicing debts than on health.

A frequently expressed concern about debt relief is that it may not change the lot of the poor anyway because the money released could well end up in the hands of corrupt elites. Mindful of this, Jubilee campaigners around the world are equally committed to pushing for transparency and accountability in debtor countries as they are to lobbying for debts to be dropped.

While corruption remains an issue, many debtor countries have replaced their dictators with fledgling democratic governments. These are more interested in poverty alleviation, yet are hampered by debts run up by previous regimes. In effect, old debts have become a tax on new democracies. The poorest of the poor are being required to forfeit the basic necessities of life to re-pay loans they had no say in incurring, and from which they received no benefits.

Where substantial debts have been written off, social indicators are in fact improving. For example, primary school enrolments doubled almost as soon as Uganda received substantial debt write-offs.

Please write to your local MP, expressing your concern about Australian Government inaction on this issue. Urge your local member to lobby for debt cancellation to be extended to more countries, to be de-linked from the discredited HIPC Initiative and for Australian support for a fairer and transparent international debt arbitration process.

For further information contact Jubilee in Melbourne on (03)9815-1677 or [email protected] Visit our website on http://www.jubilee2000.org.au Or contact me in Sydney on 9150-9713 or mailto:[email protected]


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*   View entire issue - print all of the articles!

*   Issue 85 contents

In this issue
Features
*  Interview: Tony Abbott – Workers' Friend?
The new Workplace Relations minister relives his own union background and explains why he’s really just another worker at heart. Honestly.
*
*  Politics: The Politics of Petrol
Australia might be burning, but is it a fire that can be brought under control?
*
*  Organising: The Battle of Campsie
SDA delegate Maria Kavaratzis recounts how the Campsie Big W has been transformed into a union shop.
*
*  History: Scabbing Through the Ages
Neale Towart looks back at how popular culture has treated those workers who have not considered themselves part of the collective.
*
*  International: Diary of a Showdown
The Korean Metal Workers Federation recounts a week which culminated in violent attacks on workers outside the Daewoo factory.
*
*  Economics: Debt Dumping Campaign Enters New Phase
The millennial deadline might have passed, but Jubilee 2000 is not giving up the fight for debt cancellation for the world’s fifty-two poorest countries.
*
*  Health: The Real Drug Wars
As Africa attempts to deal with the HIV crisis, access to the medicines that can relieve victims’ suffering is emerging as a major humanitarian issue.
*
*  Satire: Liberals Claim Triumph in Queensland
John Howard has claimed the Liberal Party’s decimation in Western Australia and Queensland as a triumphant vindication of his party’s embracing of the national competition policy.
*
*  Review: Beyond a White Australia
As we ponder the One Nation renaissance, a new book challenges the current debates around xenophobia and the perceived threat of danger from Asia.
*

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