Canada puts pressure on G7 for action on debt

Canada puts pressure on G7 for action on debt

Jubilee Debt Campaign welcomes today’s (2 February 2005) announcement by Canadian Finance Minister Ralph Goodale that Canada is joining the UK government’s call to suspend 100% of debt repayments by the world’s most impoverished countries.

Ahead of this weekend’s meeting of G7 Finance Ministers in London, Mr Goodale announced that Canada will provide the funding necessary to cover the debt repayments of around 20 countries to the World Bank and African Development Bank, and consider how to provide funds to cover debt repayments to the International Monetary Fund (IMF).

The UK government made a similar announcement on 26 September 2004. Canada’s move means that two of the seven countries in the G7 group of the world’s richest and most powerful nations have now accepted campaigners’ arguments that bilateral debt relief is not enough: 100% of the debts owed by the most impoverished countries to the World Bank and IMF must also be cancelled if they are to have a lasting exit from the debt trap in which they are caught. The G7 Finance Ministers meet in London on 4 and 5 February, and UK Chancellor Gordon Brown, who will chair the meeting, has put Third World Debt high on the agenda. Canada’s announcement increases the pressure for action on France, Germany, Italy, Japan and the US

Whilst welcoming the initiative shown by the UK and Canada, debt campaigners are concerned that unless cancellation is delivered without harmful economic policy conditions, it may undermine the potential benefit of debt relief. They are also calling for permanent cancellation of debt stocks, rather than the ten-year suspension of debt repayments currently being offered by the UK and Canada.

JDC Campaign’s Officer Caroline Pearce said today, “Worldwide, expectation is growing that the world’s richest countries will act decisively in 2005 to combat the man-made disaster of poverty which kills 30,000 children every day. The forthcoming G7 Finance Ministers is the first test of the rich world’s rhetoric that it cares about poverty and justice. Unless they take radical action this weekend and cancel irrevocably 100% of the debts of the world’s most impoverished countries, without attaching harmful strings such as enforced privatisations or trade liberalisation, then they will have failed this test and betrayed the expectations of millions.”

Debt campaigners will be staging a protest outside the Finance Ministers’ meeting. A giant counter set up by Jubilee Debt Campaign member World Development Movement will record the number of children who die because of preventable poverty-related hunger or disease during the meeting – one every three seconds, or 26,700 during the course of the whole meeting.

Debt repayments have a crippling impact on the world’s most impoverished countries, which are paying more than £30 million a day to the rich world. Many African countries – such as Zambia, where life expectancy is just 33 - are forced to spend more every year on debt than on health or education.

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