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Pledges on debt are ‘all mouth’

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Issue 1678

Don’t believe Gordon Brown

Pledges on debt are ‘all mouth’

MUCH OF the press hailed chancellor Gordon Brown as the liberator of the new millennium for his pre-Christmas pledge to cancel Third World debt. But the reality is utterly different. As the excellent campaigning posters produced by a charity say, Gordon Brown and other Western leaders are “all mouth”.

  • None of the leaders’ debt plans do anything about debts owed to private banks and multinationals. This means that the vast majority of debt is not even considered for cancellation.
  • Brown is only offering to cancel a tiny portion of the debt, which is not being repaid anyway because the countries involved are too poor. Dr Daleep Mukarji, director of Christian Aid, says, “Gordon Brown’s decision covers around $2 billion of the $198 billion of unpayable debt which remains.”
  • The British government had previously agreed to write off all aid loans and 90 percent of trade related credits. The “new” deal is to raise this 90 percent to 100 percent. This mainly covers export credit guarantees-subsidies paid by the government to British firms that profitably export to the Third World.
  • Brown’s statement covers only 25 countries. Yet there are 41 countries officially recognised as “highly indebted”.
  • British debt relief will not happen until there are similar moves by the International Monetary Fund (IMF)and other Western countries. Every day 19,000 children die as a result of the debt and each delay means more deaths. Already pledges made at the G7 summit of leading industrialised countries last June have been broken. Ann Pettifor of campaigning group Jubilee 2000 says, “Not a single country has yet gained from anything agreed at the summit.”
  • Towards the end of last year US president Bill Clinton promised to forgive all US loans to the worst off countries, but Clinton has failed to get congressional approval for the World Bank and IMF’s share of debt relief.
  • Brown’s offer is also dependent on debtor countries following strict IMF policies. That means more privatisation, rises in the prices of basic goods and cuts in welfare. Even a recent survey by the World Bank showed that under these internationally approved structural adjustment programmes real health spending per person has fallen by 15 percent.

The fact that Western governments have to pretend they are moving significantly on debt relief is a sign that the anti-debt campaign is now one of the most widely backed movements in the world. It is time to step up the fight for the immediate cancellation of all Third World debt.

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