Back in 1999 when the G8 (the leaders of the Group of Seven “leading industrialised nations”, plus Russia) met in Cologne, Germany, they won headlines with their apparent new commitment to debt relief for some of the world’s poorest nations. They revamped the Heavily Indebted Poor Countries (HIPC) process, promising another $100 million to fund the cancellation of some debts owed by the 42 countries deemed eligible for that system to multi-lateral lending bodies such as the IMF and the World Bank.
It quickly became apparent that the much heralded new system was not sufficient. Beside forcing a range of ideologically-based steps on countries looking for debt relief—such as privatisation of key public services and involvement in a range of trade agreements—the process was so slow that countries quickly found that by the time they reached the ‘completion point’ the amount of debt relief made available to them was not enough to bring their debt back to manageable levels. It was certainly not the total debt cancellation that many believed the Cologne deal represented.
Five years on, and Jubilee Research, one of the successor organisations to the Jubilee 2000 Coalition (the campaigning body that had been calling for the cancellation of the debts of the world’s 52 poorest countries by the end of the year 2000) calculate that at best 77% of the relief promised at the Cologne meeting has been delivered. That’s less than 32% of the combined debts of those 42 countries, leaving many, many people still suffering because their government is forced to spend more of its income servicing the debts of past, corrupt (yet often Western-supported) regimes, than on healthcare, education, and other essential public services.
Given that, much excitement followed rumours this week that at their meeting in Georgia this week, the G8 would unite behind a British backed plan for significantly more debt relief, potentially under a revised, more transparent process. The Guardian’s report, echoed by other sources, suggested that the HIPC eligible countries could be offered 100% debt cancellation, something not previously on the table.
Certain other events rather monopolised news coverage this week, to the degree that it was entirely possible to miss the fact that the G8 had met at all. And under that cover, the leaders gathered on Sea Island failed to bring the rumours to life. The HIPC programme has been extended for a further two years, but there is no new money apparent and without it, this announcement has little meaning. Campaigning groups are understandably dismayed.
What British observers may want to note is the suggestion in the Guardian’s article that acceptance of a new deal on debt relief, apparently to be accepted to keep general policy in line with the plan to offer Iraq a 100% debt write-off, would signal that Tony Blair’s support for the war in Iraq has won him new clout with the Bush administration. If we were to speculate further, we may wonder what the failure of the summit to adopt the proposals says about that.