Aid agencies say poor countriesí debts must be cancelled with new money
Campaigners are urging finance ministers from the worldís richest nations to use this weekendís G7 meeting in London to cancel poor countriesí debts with new money rather than debt relief from aid budgets, which is a strategy favoured by the US.
Campaigners, including many Christians, are pointing out that every week poverty kills more people than died in the Asian tsunami. A child dies every three seconds from a preventable disease, and yet the worldís poorest countries still spend more on debt repayments - 100 million US dollars a day ñ than they do on health care.
In a report released today ahead of the London meeting entitled ìDo the Deal: the G7 must act now to cancel poor country debtsî, leading international agencies ActionAid, Catholic aid agency CAFOD and Oxfam say the finance ministers must seize this opportunity to have a huge impact on world poverty.
ìIf finance ministers agree a deal on debt cancellation, this G7 meeting would be the first milestone on the road towards ending the obscene poverty that kills 50,000 people every day,î said Oxfamís Max Lawson.
Romilly Greenhill of ActionAid said: "Further debt relief is urgently needed. But it must be new money, and it must come without the kind of economic policy conditions that can harm poor people instead of helping them."
"It's time to stop tinkering with the debts and lives of the world's poorest,î said Henry Northover of CAFOD.
ìThe small debt relief given so far has been used well and saved lives. It would be an act of gross cynicism to talk of poverty reduction while refusing the poorest the means to achieve it."
The tsunami has shown that when politicians want to act, they act quickly. Last month, under an intense media spotlight, rich countries agreed to suspend debt repayments from the tsunami-affected countries. In November 2004 they also agreed to cancel a total of 31 billion dollars of debt owed by Iraq.
And yet in Africa, the worldís poorest people are paying for their countriesí debt burdens with their lives. The development agencies say it will take full debt cancellation, as well as increased aid and fairer trade for low income countries to meet the internationally agreed targets, the Millennium Development Goals.
One important source of financing for debt relief could be a revaluation of the IMFís stockpile of gold which, the agencies estimate, could raise 45 billion dollars.