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Empty promises leave millions enslaved by debt

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PROTESTS AGAINST the G8 summit of the world's most powerful countries in Evian, France, will begin next week. George Bush will be jetting in for the summit, fresh from the slaughter in Iraq. Evian is not just a chance to protest to demonstrate against the warmongers. It brings together the people who impose brutal capitalist polices across the globe.
Issue 1852

PROTESTS AGAINST the G8 summit of the world’s most powerful countries in Evian, France, will begin next week. George Bush will be jetting in for the summit, fresh from the slaughter in Iraq. Evian is not just a chance to protest to demonstrate against the warmongers. It brings together the people who impose brutal capitalist polices across the globe.

Five years ago, at a similar meeting in Birmingham, the leaders of the G8 countries were pushed into promising big debt reduction. The US, British, Japanese, Canadian and European governments all made great play of their desire to help the world’s poorest countries. It was a gigantic hoax.

An authoritative new report released last week shows the promises were empty. Debt, the bankers’ weapon of mass destruction, is still in operation. The result is that 19,000 children still die every day because money is spent on repaying debts rather than on health and education. Chancellor Gordon Brown likes to pose as a friend of the global poor. But he has played a key role in the decisions which mean that:

  • Only a third of the $100bn (£61.7bn) write-off promised at Birmingham has been delivered.
  • Only eight of the world’s most impoverished countries have seen a significant cut in their payments to Western creditors.
  • Four of the countries that entered the debt write-off programme will pay more in debt service in 2003-5 than they did in 1998-2000. Senegal’s debt service rose by 61 percent in 2001 despite 60 percent of the population living below the poverty line.

‘The majority of the world’s poorest and most indebted people remain enslaved by debt, with no real hope under existing policies of being freed from indebtedness,’ the joint study by Jubilee Research, Cafod and the Jubilee debt campaign says.

It adds, ‘The prospect of meaningful reform to the global financial system to bring about a fair, transparent and independent process for resolving debt crises, remains almost as distant as ever.’ A World Bank study shows that 19 of the 26 countries targeted for help still have debts of more than one and a half times their national income.

Countries have continued to stack up debts because falling prices of commodities like coffee have cut into export earnings. Between 1998 and 2002, the 26 poorest countries received a $29bn debt write-off and borrowed a further $24.2bn. Even when debts are written off, it is at the price of implementing policies which hurt the poor and help the multinationals.

Debtors can be instructed to privatise industries, ruthlessly cut public spending and foist increased charges on basic services. Guyana, one of the first countries to reach the initial qualifying stage for debt reduction, has yet to receive a full write-off because it has refused to privatise the national sugar company.

Malawi was told last year to sell off ‘surplus’ food stocks in order to repay debt. It had just done so when famine struck and thousands died. Other cases include:

  • Zambia being told by the IMF to privatise its banking system. It refused but relented as famine and debt escalated.
  • Senegal was refused full debt write-off status until it privatises its state-run peanut business.

    Ghana was told to make a vast increase in petrol prices and impose VAT on goods.

  • Rwanda was forced to rein in social spending and told it has too high a budget deficit.

Jubilee research economist Romilly Greenhill says, ‘Desperately poor countries are being denied debt relief because they refuse to cut public spending, sell off the family silver or further squeeze the wages of their civil servants. It is ironic that Rwanda, one of the poorest countries, is being denied debt relief because of her ‘excessive’ budget deficit, while the US racks up record deficits to provide tax cuts for the wealthy.’

Everyone should support the protests around the Evian summit – against war, against debt, against the destruction that capitalism causes.

Another sinner repents

STEPHEN BYERS, the former trade secretary, this week attacked the policies he ruthlessly implemented when he was in office. He now says that opening up Third World economies to the multinationals is disastrous.

Byers said he had changed his mind after a visit to Africa. ‘I was aware of the arguments, but it’s not until you see first hand the consequences of policies, that you see they need to be changed. The course of international trade since 1945 shows that an unfettered global market can fail the poor, and that full trade liberalisation brings huge risks and rarely provides the desired outcome.’

It was ‘getting away from Whitehall and the persuasive arguments of trade policy experts’ that made the difference. Byers led the British delegation to the world trade talks in Seattle in 1999. Byers joins a growing number of people who have turned their back on such policies.

Joseph Stiglitz served as World Bank senior vice-president and chief economist between February 1997 and February 2000. Last year he produced a sharp attack on capitalist globalisation and the institutions that oversee it.

Byers’ comments show that there is very little ideological depth to the people who are in Blair’s cabinets. The minute they are out of office they reveal their uncertainty about key elements of everything they did.

Confront the G8


EVIAN 31 MAY-1 JUNE 2003 There is still time to get to the Evian protests. Protests and meetings begin on Thursday next week but the biggest demonstration will be on Sunday 1 June in nearby Geneva.

Coaches or minibuses are going from Manchester, Liverpool, Kent, Home Counties, Swansea, Sheffield and Leeds, London and Scotland. For full details phone Globalise Resistance on 020 7053 2071/2 or go to

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