2005 G-8 Summit
Outcomes and Reactions
The Group of Eight wealthiest nations meeting concluded on July 8th. At the conclusion of the four day summit the American Friends Service Committee joined with our global partners and debt cancellation campaigners around the globe in expressing our disappointment at the limited outcomes of this Gleneagles Summit, "The G-8 leaders have come not with bold actions but with more promises and empty words.”
Despite the media hoopla and the pervasive feeling that the summit would make real strides toward ending the extreme poverty of much of sub-Saharan Africa, it ended with very little progress on the issues of debt, trade and aid.
The summit's outcomes fell short of global calls on debt cancellation, poverty reduction, treatment access and fair trade and, in so doing, failed to accomplish anything beyond the reaffirmation of existing decisions on debt cancellation and the doubling of aid.
The pre-summit agreed upon debt decision provides only 10% of the cancellation needed; and will only curb the debt burden of one third of the African countries in need of cancellation. The July 8th confirmation of this deal to cancel the debts of 14 African countries and the subsequent cancellation deal between Nigeria and the Paris Club still leaves 33 African countries burdened by illegitimate and odious debt.
The total amount of debt to be cancelled by the G8 deal (a little under $40 billion USD) is a fraction of the $300 billion USD in debt that sub-Saharan African countries are paying the G8 nations and international financial institutions. To put this number in perspective: it is far less than the $50 billion USD that the United States spends each year on the occupation of Iraq or on its annual military budget of $400 billion USD (2004 figures).
The G8 agreement includes the cancellation of $40 billion USD multilateral debt claimed from 14 HIPC Completion
Point countries. These 18 countries paid, and will continue to pay, a terrible cost for this $40 billion USD— compliance with HIPC conditionalities required to reach “Completion Point,” the impact of which will be felt for many years to come.
The agreement also mentions that 100% stock cancellation will be delivered to those “on track with their programs of repayment obligations…” implying that countries currently in arrears with their debt servicing will have to meet their payment obligations before they are eligible for the cancellation.
Furthermore, it remains uncertain as to whether new conditionalities will be imposed on these countries in the guise of ensuring “good governance, accountability and transparency.”
The agreement is also understood to include $11 billion USD claimed from 9 HIPC Decision Point countries, and
$4 billion USD claimed from 11 HIPC countries that have not yet reached decision point. This $15 billion USD
comes with the same price — the 20 other countries will only become eligible for cancellation after they implement HIPC conditionalities.
The total $55 billion USD in multilateral debt cancellation will definitely not be enough to compensate for the devastating effects of these policies, which include privatization of services and utilities, indiscriminate trade and
market liberalization, the further opening up of economies to foreign investments; targeting extractive industries on the Continent of Africa, export-oriented policies at the expense of domestic needs.
The impact of these policies includes the undermining of sovereignty and democracy, the intensification of repression, militarization, and war.
Like its predecessors, the agreement does not address the issue of odious and onerous debts.
Even by the narrowest legal, political and ethical parameters, most if not all debts claimed from the African Continent are illegitimate. Furthermore, the G8 statement does not express any measure of acknowledgment of the historical and structural causes of debt and poverty and the culpability of developed nations.
On the issue of aid, the G8 summit agreement promises to increase total aid to the African Continent to around $25 billion USD in five years time. Unfortunately this “annual increase” in aid to Africa will be drawn from existing African aid funds and will be spread over the duration of repayment of the cancelled loans. Further, both packages are still attached to harmful policy conditionality. Throughout this process, the US has made no commitments with respect to its overall aid budget, only saying it will double aid to Africa, and listing the large and highly criticized existing initiatives; leaving open the possibly of diverting aid from elsewhere.
These outcomes, while sobering, leave global debt campaigners with a clear way forward. We must stay the course and remain committed to building a global movement that will achieve real debt cancellation for the African Continent.
Looking Forward
AFSC is committed to working towards the following:
- Expand debt cancellation to more countries
- Remove HIPC as the eligibility criteria
- Remove any form of conditionality
AFSC will do this in the following ways:
- Working with U.S. Congress to pass the Jubilee Act (H.R. 1130), now co-sponsored by 73 members, which calls for 50 countries to be included in debt cancellation deals without harmful conditions.
- Continue to put pressure on the U.S. Department of Treasury, the IMF and the World Bank to establish a new yardstick for debt cancellation eligibility.
- Work with Civil Society groups in the Global South and in G-8 countries to campaign to remove conditionalities.
What you can do:
- Send a message to your Congressional representatives and tell them that you stand with Bishop Tutu in his call for 100% debt cancellation without harmful conditions. Also ask them to co-sponsor the JUBILEE Act, a bill calling for debt cancellation for low-income countries.
- Subscribe to the National Africa Network E-Newsletter
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