Nick Clegg recently visited Cairo to declare his support for democracy and to pledge £5 million of British money. He didn't point out that his government is demanding £100 million from Egypt for debts inherited from Hosni Mubarak. We now know that the government is expecting Egypt to repay money used by Mubarak to buy weapons.
This emerged after a researcher from the Jubilee Debt Campaign discovered neglected documents in the National Archives. The Export Credits Guarantee Department (ECGD) – a unit of Vince Cable's business department – said that Egypt owed it £100 million, but has not explained what the loans were made for.
Egypt's future is desperately uncertain. Those of us hoping for real democracy in the country are alarmed about the power of the military. I'm not suggesting Egypt's debt should simply be written off. Nor is the Jubilee Debt Campaign. They are calling for a full audit of the debt, so that loans used by Mubarak and his predecessor to fuel oppression and corruption can be cancelled.
Dina Makram-Ebeid of the Popular Campaign to Drop Egypt's Debts – launched in Cairo last month – insisted that "Mubarak's debt … is not the Egyptian people's. Egyptians never had a say in the borrowing that was being made in their name, let alone borrowing to buy arms."
Nor did the British people have any say in making the loans. An audit of debts owed to the UK would allow us to find out about the deals being done in our name, with our money.
And it would open up the ECGD to public scrutiny. Supposedly, the ECGD backs loans to countries and companies to help them buy British exports. But on some occasions, no more than a quarter of the purchase has been for products made in the UK. If the recipient defaults on the loan, then the ECGD foots the bill – with public money. The debt is then owed to the ECGD.
The ECGD's dodgy deals with dictators have at times been used to express UK government support for oppressive regimes. When the ECGD backed loans to Mubarak's predecessor, Anwar Sadat, the decision was supported by the then financial secretary – and later Chancellor of the Exchequer – Nigel Lawson. The uncovered documents show he was advised to back the purchase of missiles rather than power station equipment because this "would demonstrate our political support for Egypt during their current international difficulties. Power-generating equipment would not."
Arms have been a traditional focus of ECGD support, even though arms make up less than two per cent of UK exports. Equally worrying is ECGD's support for fossil fuels and aviation. In their coalition agreement, the Conservatives and Liberal Democrats agreed to remove ECGD support for "dirty fossil fuels". The ECGD have now admitted that they are planning to fund coal-mining in Siberia.
No wonder that the ECGD has been dubbed "the department for dodgy deals" by the Jubilee Debt Campaign and their allies in the Clean Up Britain's Exports (CUBE) coalition. CUBE's members include WWF, the Campaign Against Arms Trade (CAAT) and Christian Aid.
Nick Clegg's words about democracy are no alternative to opening up the ECGD and letting people in Britain and around the world know the realities of dictator debt to the UK. Vince Cable was a champion of democracy when in opposition. Now he oversees one of the murkiest units in Whitehall. The ball's in your court, Vince.
©Symon Hill is associate director of Ekklesia and also works with Jubilee Debt Campaign. This article appeared originally on the Guardian website on 3 November 2011.
For more information on Jubilee Debt Campaign, please visit http://www.jubileedebtcampaign.org.uk . To ask Vince Cable to reform the ECGD, please go to http://www.jubileedebtcampaign.org.uk/ACT3720NOW373A3720Investigate3720d... .