Interview: Rock Solid
Industrial: Eight Simple Rules for Employing My Teenage Daughter
Politics: The Johnnie Code
Energy: Fission Fantasies
History: All The Way With Clarrie O'Shea
International: Closer to Home
Economics: Taking the Fizz
Unions: Stronger Together
Review: Montezuma's Revenge
Poetry: Fair Go Gone
The Locker Room
When the Truth Hurts
Closer to Home
Today is World Debt Day, an annual opportunity to reflect on the poverty and suffering caused by the unjust debts owed by poor nations to wealthy countries and international financial institutions.
Last year the G8 countries signed a deal, since ratified by the IMF and the World Bank, to give debt cancellation initially to eighteen heavily indebted poor countries - mainly African. This number has now increased to nineteen and ten more countries may become eligible for similar debt cancellation in the next couple of years.
The deal means that from July this year, 290 million people from 19 countries will be free from debt slavery, but there are many more people who need debt relief.
Indebtedness is a scourge on the world. Money is funnelled into debt repayments instead of to vital health and education programs that could save lives and lift communities out of poverty. Indebtedness also harms a country's economic prospects, by hindering foreign investment and encouraging indebted governments to take part in unsustainable and ecologically unsound economic practices that will do long term damage to their countries.
The G8 deal was a positive step that will save many lives. But the G8 agreement doesn't go far enough: debt relief programs must be made available to more countries. Not only are IDA countries (countries that the World Bank considers poor enough to receive highly concessional loans) left off the list but so too are many poor countries in the Asia & Pacific Region.
If we are fair dinkum about assisting poor countries to meet the millennium development goals then we must provide debt relief.
Eligibility for debt relief programs must be extended to all 66 countries that the World Bank considers poor enough to grant highly concessional loans to (so called IDA-only countries). A country's poverty reduction needs and the ability to meet the Millennium Development Goals should be the primary and most important consideration when considering eligibility for debt relief.
What about Australia? Does it do as much as it could to help indebted countries?
Australia has cancelled the bilateral debt owed to it by countries that have qualified for the HIPC program, such as Nicaragua and Ethiopia. It has also agreed to fund its share of the recent G8 debt deal, to the tune of $136.2 million dollars or so.
Australia just last week announced that in the current financial year, Australia will cancel over US$668 million dollars in debt to Iraq. Another $221 million is on the way before 2008.
Australia has cancelled much of the debt owed by Iraq. The rationale here is that Iraq's debt was accrued by a dictator with little of the loaned money reaching the people it was meant to help. Iraq is not recognised in the HIPC initiative. We welcome this move. However, Australia could do a lot more.
Countries such as Indonesia and the Philippines in our region fall into a similar category as Iraq. Much of the debt in these cases comes from loans given to corrupt regimes under Marcos and Soeharto that never benefited Indonesians and Filipinos.
Both of these countries spend approximately three times more on debt repayments than they do on health and education, despite having massive problems in these areas and millions living in poverty. Both of these countries will struggle to meet the Millennium Development Goals unless debts are cancelled.
This November, Australia is host to the G20 conference in Melbourne. This meeting will provide a great opportunity for Australia to lead the way with debt relief. Australia should not only encourage further cancellation through multilateral initiatives, such as HIPC, but also the cancellation of debts of non HIPC members. Australia has shown how this can be done - it's our turn to lead the way by brokering further agreements on debt relief.
Luke Fletcher is National Campaign Coordinator for Jubilee Australia. Karen Iles is the Co-Director of AID/WATCH. Both Jubilee Australia and AID/WATCH are members of the Make Poverty History coalition.
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