Activists yesterday (13 August) handed in thousands of postcards to Business Secretary Vince Cable, urging him to overhaul the controversial Export Credit Guarantee Department (ECGD).
The Jubilee Debt Campaign (JDC) pointed out that the ECGD has provided billions of dollars in insurance for the arms and fossil fuel industries, building up large amounts of developing world debt in the process. The ECGD is a unit within the Department for Business, which Cable oversees.
They accuse the ECGD of “providing a taxpayer subsidy to overseas projects which have been linked to corruption, human rights abuses and environmental destruction”.
The JDC say that they are particularly concerned that ECGD is the largest public holder of “Third World Debt” in the UK, with developing countries owing nearly £2 billion to the institution, another £2 billion having been repaid in the last 10 years.
Campaigners insist that this money is draining the coffers of developing countries on the basis of projects which have all too often proved detrimental to the population or environment of the country itself.
“Vince Cable has expressed his strong opposition to the way the ECGD works in the past,” said JDC's Director Nick Dearden, “Now is the time to put words into action”.
The controversial subsidies go back years. They include insurance for arms sales to the brutal Indonesian dictator Suharto, used in repression, which the current Indonesian government is still paying for. Until recently, the ECGD was also insuring the sale of arms by BAE Systems to the Saudi dictatorship.
Examples highlighted by JDC include a vastly overpriced hydro-electric power station in Kenya which produced only a small amount of the power promised to Kenyans. They also mention a dam in Lesotho which resulted in a corruption case involving hundreds of thousands of pounds in one of the poorest countries in the world.
Other striking examples include an Indian power plant involving bankrupt multinational Enron which cost the Indian authorities hundreds of millions of dollars despite being shut down because the local government couldn’t afford to buy electricity from it.
Dearden said, “It is absolutely unconscionable that this part of the British government can go on supporting projects involving human rights abuses, corruption and environmental destruction – and then expect some of the poorest countries in the world to pay for it.”
He added, “The ECGD could be used to help new, green industry, but instead it’s supporting massive corporations develop appalling projects. It’s time the ECGD dropped the debt and ditched the dodgy deals.”