Debt Cancellation
Why our new report has got Kofi Annan, Tony Blair and Bob Geldof talking
If you picked up the Observer on Sunday you will have seen that we’ve just launched a new report that looks at the progress made in fighting extreme poverty since the historic pledges made at the Gleneagles G8 Summit in 2005.
If you were part of the incredible Make Poverty History movement that helped secure those promises on aid, trade and debt, this is what it has helped achieve.
Our report has got a lot of people talking – so we’ve pulled all the highlights together here if you want to catch up with the conversation. Get ready to scroll!
ONE publish new report: Summit in Sight – The G8 and Africa from Gleneagles to Lough Erne
Today ONE launches a new report that looks at the progress made in fighting extreme poverty since the historic pledges made by world leaders at Gleneagles in 2005.
Get the headline facts from the graphic below, or if you want to delve deeper, read the full report.
Vultures defeated in Jersey
We have some great news to share in the fight against so called vulture funds, which make money by buying up old debt against developing countries, and using the courts around the world to sue them for the full amount in order to reap massive profits.
In a surprise decision today the UK Privy Council, which decides cases of Jersey law, has ruled against vulture fund FG Hemisphere in a case brought against Democratic Republic of Congo.
FG Hemisphere was using the courts in Jersey to try and collect $100m from the Democratic Republic of Congo. The debt originated in the 1980s when the Yugoslavian government lent money to dictator General Mobutu to win contracts for their businesses.
Today’s judgement marks the final appeal in a case for payment on a debt bought by FG Hemisphere for just $3 million.
ONE has been campaigning for months alongside our friends at the Jubilee Debt Campaign to see an end to vulture funds using Jersey’s courts to prey on poor countries for old debt.
Nearly 50,000 ONE members signed our petition to Jersey’s Chief Minister, Senator Ian Gorst and thanks to our pressure, he announced that Jersey would introduce a law, similar to the one in the UK that will stop vulture funds preying from Jersey’s courts.
But this was too late for the current case. So today’s court decision is great news.
After having much of their debt cancelled by the IMF and World Bank just last year, the impact of losing this case would have been devastating for the on the Democratic Republic of Congo, and the people living in extreme poverty.
But of course the defeat of one vulture does not mean a defeat for all. So rest assured that ONE will continue to campaign on this issue. We’ll also be closely monitoring the situation in Jersey to ensure that the promised law comes into force soon.
Thank you to all ONE members who took action on this issue. Your voice was so vital in standing up for what was right.
Europe’s promise to Africa
One of the most important things we try to do here at ONE is hold leaders accountable for their promises to the world’s poorest countries. Each year we release a scorecard of how well the wealthiest countries are doing against their commitments – it’s called the DATA Report.
For six years, the DATA report tracked progress against the Gleneagles commitments made by the G7 in 2005. Those commitments expired in 2010. So this year the DATA Report turns its attention to the European Union and its bold commitments to continue increasing development assistance up to 2015.
With the economic crisis bringing austerity to much of Europe, this year’s report is especially important. In times of plenty it is easy to be generous – but in times of crisis, keeping those promises counts more than ever.
The 2012 DATA report reveals that some of the poorest people are paying the price of the economic crisis. Aid from the European Union declined last year for the first time since 2002, with fourteen EU countries cutting their aid. Aid promises to Africa are well off-track. Perhaps unsurprisingly the biggest cuts come from countries most hit by the crisis, namely Spain and Greece.
But that isn’t the whole story. The report also shows that some countries are protecting aid. Germany, Sweden, Italy and Belgium all succeeded in increasing aid last year. The Netherlands and Ireland have so far protected their promises to the poorest people during the crisis. And the UK remains on track to meet its promise to reach 0.7% of national income in aid from March 2013.
Some may argue the Europe has no choice but to cut aid during the crisis. However the economic crisis also puts into perspective Europe’s promises to Africa. European leaders leveraged €100 billion in a few days for a short-term fix to tide over Spanish banks. That’s five times the amount needed to deliver Europe’s promise to Africa from now to 2015. This aid could achieve so much – if invested in agriculture for example, if could lift over 20 million people out of poverty. It’s a sum of money that is small change in the context of European spending, but could make a very big difference to the lives of those in poverty.
There is an opportunity very soon for European leaders to start to turn this around. Leaders are beginning to negotiate the next European budget. Out of a proposed €1 trillion seven-year budget, €51 billion – just five per cent – is earmarked to help fight poverty. It is vital that even as leaders try to reduce the overall budget, they protect this amount.
When Merkel, Hollande, Cameron and the rest of Europe’s leaders meet in Brussels this weekend, the 2012 DATA report must be a reminder to them that their promises to Africa have not been forgotten.
Vulture Funds: your voices delivered
On Friday I went to Jersey to hand-in our petition to Cathy Keir in the Chief Minister’s Office, asking them to stop vulture funds using Jersey’s courts to prey on poor countries. Along with the Jubilee Debt Campaign we’ve been campaigning hard to see Jersey bring in the UK’s Vulture Funds law, and in a week’s time the Democratic Republic of Congo’s appeal to the Privy Council will be heard – with things hanging in the balance as to whether they’ll have to pay $100m to vulture fund FG Hemisphere.
After having much of their debt cancelled by the IMF and World Bank just last year, the impact that this will have on the DRC, and the people living in extreme poverty, is just unimaginable. The Chief Minister’s team confirmed that legislation is on the way, but there’s no way that it will now be in place in time to counter this case. We’ll be closely watching the outcome of the DRC’s appeal next Monday, and may have to call on you again to take action. Let’s hope this is a victory for right over wrong.
Your voices have been heard by Jersey’s Chief Minister’s office.
If you want to add your voice you can still sign the petition here.
Vulture fund update
We’ve been campaigning alongside the Jubilee Debt Campaign to see an end to vulture funds using Jersey’s courts to prey on poor countries for old debt. And last night Senator Ian Gorst, Jersey’s Chief Minister, announced plans to do so by introducing a law against vulture funds, as made permanent in the UK last year.
Over 26,000 of you in the UK signed our petition calling for this to happen. Very rarely are issues without grey areas, but companies just shouldn’t be able to behave in this way, and stop the poorest of countries getting back on their feet. And that’s what we’ve said as ONE to Jersey’s Chief Minister – and we’ve been heard.
In announcing these new plans, Senator Gorst said that:
“This demonstrates Jersey’s commitment to play its part in the global effort to support measures which assist the world’s most heavily indebted poor countries.”
We hope this means that the law will be introduced imminently, so countries like the DRC have a chance to stand up against these vultures. We may well still have more to do, and will keep you updated on Jersey’s promise, but for now, thank you for helping right this wrong.
Pakistan Update
When the floods hit Pakistan in July, the statistics were staggering: 20 million people displaced. 20% of the country under water. 2 million acres of crops destroyed.
ONE joined Avaaz, Jubilee Debt Campaign and Islamic Relief in immediately calling for a moratorium on debt service payments for 2 years to allow the country to rebuild.
If you haven’t already please sign our petition to have Pakistan’s debt repayments frozen. The countdown is on to the IMF’s meeting on October 14 and we need every single signature between now and then!
Also check out a slideshow from Islamic Relief of a recent visit by UK MPs Sadiq Khan and Shabana Mahmood, who went to see the relief effort first hand and have been campaigning for those affected by the floods and for a debt freeze:
Debt Relief for Liberia
A couple weeks ago we announced the great news that Liberia had reached Heavily Indebted Poor Countries (HIPC) completion point. For countries with a lot of international debt, the HIPC process offers a means to debt cancellation from multilateral organizations by undertaking major and difficult reforms to improve country economic and financial systems.
Liberia started the HIPC process two years ago with US$4.9 billion in debt, and potential annual repayments that overshadowed their entire annual budgets! Throughout the period of Liberia’s civil war and the resulting crisis, loans were not serviced and interest and penalties accumulated. By reaching completion point, Liberia has passed the 12 triggers stipulated by the World Bank and the IMF and today, Liberia has had $4.6 billion of their multilateral debt has been cancelled.
This action is a recognition of the tremendous efforts taken to transform Liberia, under the leadership of President Johnson-Sirleaf, and is an endorsement of the progress made in public financial management, debt management, governance, social service provision and the implementation of a poverty reduction strategy.
This decision now opens up more fiscal space for Liberia, allowing them the opportunity to embark on more development programs that will help expand the economy whilst continuing to tackle poverty. It also paves the way for additional debt relief. Liberia still has a way to go before we can declare victory. The Paris club, which holds Liberia’s bilateral debt, includes wealthy countries that meet under the Chairmanship of the French Ministry of Finance. Their next meeting is in September and the HIPC completion news certainly positions Liberia to make the best case possible.
On the ground in Haiti
As part of our brief series looking at Haiti 6 months on from the terrible earthquake that struck the country, we hear from Jo Barrett, Media Officer at Progressio, an international development agency that is working in Haiti and the Dominican Republic to help local communities ensure their voices are heard in the reconstruction process.
At first I didn’t know what was happening. I thought the t-shirt clad workers were simply taking a break from the gruelling task of shovelling heavy piles of rubble into buckets.
But then, one by one, they lowered their face masks and clambered down from the crippled, twisted remains of what was once a 4 storey building.
Almost 6 months after Haiti’s devastasting earthquake, I hadn’t imagined people would still be pulling human remains from the rubble. But they are.
“It’s a body”, one man told me. “They have found someone up there”, he said, pointing to a spot somewhere in the clumsy mass of concrete, steel and earth.
In Port au Prince, the devastated capital of the Western hemisphere’s poorest nation, it seems the grim reality of what happened on January 12 just won’t go away: as Haitians will tell you, every aspect of life here has been altered by “le douze”.
Take the sprawling camps. Even after 6 months, hundreds of thousands of people are still living under canvas. Entire families squeeze into tiny, baking-hot tents with barely enough room to lie down. There is little food, or water, or light.
And, slowly but surely, people are getting frustrated. “It’s extremely difficult living in the camp and there are lots of problems”, Coq Michelet Staël, an engineer, tells me as he tries to fix his tent up in St Louis Gonzague camp in central Port au Prince.
“We havent’t had much aid. There are days when we find food and water, but other days we don’t”, he adds.
But complaints about basic services quickly spiral into expressions of disappointment with the government. In neighbouring Henfrasa camp, Noel Fanes, also a student, lays the blame squarely with the country’s leaders.
“We have organised ourselves”, he says. “Nobody from the government has ever visited us, not even the mayor. It’s a way of hiding from their responsibilities so they don’t have to face up to what is happening”.
There is no doubt that people here feel they have had to go it alone.
Though the situation is complex, and though millions of dollars in aid have been pledged to help Haiti, I can’t help but feel Coq and Noel, and thousands more like them, deserve so much better.
Haiti’s Debt: 6 months on
Back in January more the 200,000 ONE members signed our petition to cancel Haiti’s external debt and help the country rebuild from the terrible earthquake that struck on 12 January.
6 months on we thought it would be useful to report back on what happened next.
At the handover of the petition during the G7 finance ministers summit in the small Arctic Canadian town of Iqaluit (the first ONE petition to be delivered above the Arctic Circle!) we welcomed the news that the G7 had agreed to support debt relief.
According to our friends at the Jubilee Debt Campaign Venezuela cancelled $295 million of debts at the end of January, while at the end of March the World Bank and the Inter-American Development Bank together forgave a combined total of $472 million.
That leaves Haiti’s only outstanding debts at the moment being held by Taiwan and the IMF. Taiwan is difficult as many of these debts are held by commercial creditors who are unwilling to forgive them. The IMF, however, is currently working on a process to cancel Haiti’s remaining debts, though this hasn’t happened as yet.
The process of rebuilding Haiti will be a long one, but as ONE members we can celebrate the fact that a country facing so many obstacles on the road to recovery has, at least, one less injustice to face: Haitians will no longer be saddled with the debts accumulated by previous governments.
- Previous Posts Older Entries
- Next Posts
 |
 |
 |
About the Blog
The International ONE Blog is a daily log of the anti-poverty movement. The site is operated by ONE staff, with guest contributions from ONE volunteers, members and allies.
The content of each post and each comment represents the views of that author and does not necessarily reflect the views of ONE. ONE does not support or oppose any candidate for elected office, and any post expressing support or opposition for a candidate is not endorsed by ONE.
TAGS: 0.7%, Aid Effectiveness, Bob Geldof, Debt Cancellation, Development Assistance, G8, Kofi Annan, ONE, Tony Blair, Trade