May 31, 2003, Letter to the Editor on the G8 and Debt

Globe and Mail, Saturday, May 31st.


Stephen Lewis rightly pointed out that the G8 is failing Africa (Our world on their shoulders, Thursday, May 29th, 2003). He discusses the G8's lack of commitment to the Global Fund on AIDS, Tuberculosis and Malaria. Mr. Lewis cites the amount of $5 billion needed by the Global Fund for 2003 and 2004 to confront these annihilating communicable diseases. Interestingly, this amount is comparable to the amount that sub-Saharan Africa could save annually if the G8 agreed once and for all to  comprehensive debt relief.


The G8 "enhanced"debt relief programme, agreed four years ago at the Köln Summit, is completely inadequate. As of September 2002, only 6 countries had reached the "completion point" when they are supposed to have achieved a lasting exit from "unsustainable" debt burdens. But 3 of these 6 countries - Uganda, Mauritania and Burkina Faso - still had unsustainable debt burdens even after receiving the full debt relief treatment promised by the G8. Another 20 or so countries are in an interim period --having qualified for some debt relief, but remain under the supervision of IMF and World Bank economic adjustment programmes. However, 13 countries have had their debt relief delayed because they had fallen "off track", that is they are not in compliance with some of the stiff austerity and economic adjustment conditions laid down by the Bank and the Fund.


What's worse is that some countries, Mali, Sierra Leone, Zambia and Niger, will actually have to make higher annual debt payments after graduating from the debt relief programme.


Even if the debt relief programme was succeeding on its own terms, the actual amount of debt service payments freed up for most countries would be equivalent to around 12% of their already meagre annual social spending. In other words, these countries could increase their grossly inadequate spending on education, health and other social services by only one eighth, due to the paltry amount of debt relief they will receive over the years 2001-2015 with the current G8 commitments.


In Kananaskis last year, media reports talked about an additional US$1 billion in debt relief. In fact no new debt relief was offered last year. The billion dollars was to make up part of the shortfall from past promises unkept for debt relief.


Stephen Lewis made well the case that African countries need resources. So, G8 -  let them keep their own.