As the United Nations Food and Agriculture Organisation meets to discuss the food crisis in Rome today, debt campaigners have issued a call for a moratorium on debt repayments from afflicted countries.
Jubilee Debt Campaign and Christian Aid in Britain describe the World Bank’s fund of $1.2 billion to fight the food crisis, $1 billion of which consists of yet more loans, as ‘a sticking plaster’, and calls for faster debt cancellation rather than new loans to tackle the food crisis.
Debt campaigners are specifically calling on Alistair Darling, the UK Chancellor of the Exchequer, and other G8 country finance ministers to cancel Haiti’s $1.3 billion debt burden.
Despite being promised debt cancellation in 2006, Haiti is still paying around $1 million a week to the rich world in debt repayments, even though food prices have sparked hunger and riots that have led to the dismissal of the Prime Minister.
Christian Aid and Jubilee Debt Campaign point out that the World Bank’s emergency grant to Haiti, announced on Friday, will only cover Haiti’s debt repayments for the next 10 weeks, while the UN has predicted increased food prices for 10 years.
Christian Aid’s country representative in Haiti, Prospery Raymond, said:
"There is so little money left in the budget after paying the interest on the debt. There is hardly any room for manoeuvre in paying food subsidies. Granting a debt moratorium is something that the international community has the power to do that would make a huge difference to Haiti's security in the coming months."
Already five people in Haiti have been killed during rioting over the soaring price of food. Mr Raymond warns that urgent action is needed to prevent more violence.
Nick Dearden, Director of Jubilee Debt Campaign, declared: "The World Bank’s response is a sticking plaster - Haiti's grant will be cancelled out by debt repayments in ten weeks, while UN experts say high food prices are set to last for ten years."
He continued: "A comprehensive response must include accelerated debt cancellation so that poor countries can make their own investments in agriculture and food production. In the mean time, there must be a moratorium on debt repayments for the countries on the front line of the food crisis. More loans are not the answer."
Jubilee Debt campaign has issued a call for:
• debt cancellation, and an interim moratorium on payments, for all developing countries suffering from the food crisis, including Heavily Indebted Poor Countries (HIPC) yet to complete the process, such as Haiti, or countries such as Bangladesh that are presently excluded from debt relief schemes.
• recognition by the IMF/ World Bank of the role that economic policy conditions have played in the creation of the food crisis and immediate cessation of such conditions from debt relief and aid programmes.
• all international assistance to deal with the food crisis should take the form of grants not loans.
Nick Dearden commented: "It is shocking that while many millions of people in the world are going short of food, their government are still being forced to shell out millions of pounds a week to rich countries and banks. The terrible irony is that economic conditions, forced on poor countries by the World Bank and IMF in return for debt relief packages, have actually contributed to the crisis we are witnessing today."