From Debt Relief to Debt Cancellation
Canadian Finance Minister Ralph Goodale has recognized the failure of the Heavily Indebted Poor Countries (HIPC) initiative, noting that 6 of the 11 African countries that have completed the process still have unsustainable debts. He has also observed that 'debt payments (especially to the International Financial Institutions) are too high relative to servicing capacity and social needs.' He has also stressed the need to treat all poor countries 'equitably,' and has admitted that the IMF and the World Bank 'need to become more sensitive to local conditions, especially with respect to structural reform conditionality.'
It is time for our government to move beyond questioning and tinkering. It is time to abandon the current IMF and World Bank model which has resulted in disappointing levels of economic growth, efficiency and competitiveness, the destruction of national productive capacity, extensive environmental damage and growing poverty and inequality.
Our African partners insist that many debts contracted by repressive or despotic regimes and used contrary to the interests of people are 'odious debts' that need never be repaid. They cannot be repaid without harming people and communities by denying them essential nutrition, water, health care or education.
Our government must move from offering 'debt relief' for just 22 poor countries to full multilateral debt cancellation for all impoverished countries.
Current proposals by Canada and the United Kingdom would make multilateral debt payments on behalf of some poor countries until only 2015. At best, only about one-third of their debts would actually be cancelled. Payments on the remaining two-thirds would resume after 2015. While a US proposal would cancel some debts, it would reduce future eligibility for development loans by one dollar for each dollar of debt written off.
We call on the Canadian government to champion the unconditional cancellation of 100% of the multilateral debts owed by impoverished countries. We also call for the provision of sufficient additional Official Development Assistance to enable them to meet the Millennium Development Goals.
International financial institutions can and must bear their share of the costs of debt cancellation. These costs can be met by using a variety of measures, such as sale of some of the IMF's gold reserves and drawing upon the World Bank's loan loss provisions and retained earnings.
Rt. Hon. Paul Martin, M.P., P.C.
House of Commons
Dear Mr. Martin,
More than 130,000 Africans die every week from preventable causes, including HIV/AIDS, malaria, tuberculosis and contaminated water. Yet Sub-Saharan African countries continue to pay about US$12 billion a year servicing debts that are illegitimate because this money is urgently needed for health care, clean water and sanitation.
Given this ongoing human tragedy how can creditors collect even one dollar in debt service from these impoverished countries?
When you and the other G8 leaders meet in Scotland this July for your annual Summit, Canada must lead a movement to go beyond the suspension of debt service payments until 2015 and instead cancel these illegitimate debts.
We call upon the Government of Canada to lead a movement to:
' SECURE the immediate and unconditional cancellation of 100% of the debts owed to multilateral financial institutions by all impoverished countries that need debt cancellation in order to meet the Millennium Development Goals;
' ENSURE that countries are free to implement their own national development strategies by ending IMF and World Bank Structural Adjustment Programs;
' GUARANTEE adequate financing for impoverished countries including through the dedication of 0.7% of Gross National Income to Official Development Assistance.
Hon. Ralph Goodale, M.P., P.C.,
Minister of Finance
'It is so easy to die in Zambia...'
by Emily Sikazwe
Lately I have spent a lot of time at Zambia's University Teaching Hospital. This is the major government hospital where our citizens go in case of a major complication that the clinics or regional hospitals may not be able to deal with. My comrade and friend in the struggle for social justice is unwell. In times like these, we activists stand by each other. A small group of us has been taking turns checking on him.
Once upon a time this hospital was a symbol of national pride. Now we call it the 'departure lounge''the place where Zambians spend the last moments of their life. I have been at the hospital for an hour or two three times a day. As I park my car I see a familiar face. When I walk towards her she bursts into tears. I do not have to ask. Someone close to her has died.
As I try to comfort her, I see bodies being brought into the hospital already dead. They are from the homes of those who cannot afford to come to the hospital. They are dying because of the hospital user fees forced on our government by the International Monetary Fund and the World Bank.
At our prestigious hospital, there are no essential drugs, not even simple antibiotics, sterile cotton or disinfectants to clean properly. Each time I go to check on my colleague, I am given a prescription to buy medicine. I wonder, what about the poor people who cannot afford to buy? What happens to them?
It is so easy to die in Zambia. Life has become so cheap. I recall asking a nurse how many people die here everyday. 'About 70-100 deaths,' she answered. 'How many are brought in dead from their homes?' 'About thirty every day,' she replies. 'How about in the intensive care unit?' She responds, 'the mortality rate is very high there too.'
Many coming to the hospital are part of the HIV/AIDS pandemic which has strained the system far beyond the breaking point. HIV/AIDS in Africa has had devastating effects on our economies and the social landscape. The national budgets are overstretched; the most productive humans between 25 and 55 years of age are being wiped out. HIV/AIDS is not only a killer, it is the most dehumanising and hideous blot that has been placed on the human race.
At the Universty Teaching Hospital, nurses must volunteer to do more shifts just to make ends meet. Their salaries, however, cannot be reviewed because the IMF has imposed a wage freeze. Our government says they have to comply with World Bank/IMF conditions in order to get debt relief. In desperation the nurses and doctors run themselves into exhaustion. What sort of a human being can do all these jobs and still be expected to perform to the best of their abilities?
Coping with the donor imposed wage freeze and poor working conditions poses a health risk, a security risk, and an economic risk as most medical professionals, who were trained at great cost, are dying.
If my friend was an ordinary citizen he would be dead by now. But because he is a political figure the hospital moved mountains to save his life. His family is not poor. Whatever additional medicine that was needed was purchased. Ordinary Zambians don't survive. They continue to die like flies because they are poor. I wonder: Are our lives different? What is the economic difference between the life of a European, an American and an African? What is the economic value of these lives? Can any economist from the World Bank and IMF tell me what it means in economic terms?
I now have come to understand the question of debt more clearly than ever before. We are being squeezed dry by the World Bank and IMF because at one time or the other our country borrowed money. Now we are paying and will continue paying, literally through the blood of Zambia's people now dying at home and in the care of a collapsed health care system.
The G8 leaders will meet this July in Scotland. Africa is high on the agenda. If I could speak directly to them I would tell them this: A better world is possible for Africa and its children. Cancel our debts now: fully and unconditionally. Let us rebuild our lives with dignity and respect.
Emily Sikazwe is Executive Director of Women for Change, a Zambian NGO committed to empowering remote rural communities towards the eradication of all forms of poverty.