Debt relief is ineffective without trade justice, say bishops
BY DAN FRANK
SCOTLAND’S Catholic bishops have welcomed the G7’s decision to cancel the debt of the world’s poorest countries. However, they urged the G8 countries to go still further when they meet next month. The Vatican also hailed the agreement but said that the move must be followed by an increase in development aid.
The Scottish bishops commended the British Government for leading the drive to write off the debt of the 18 countries that have already completed the Heavily Indebted Poor Countries (HIPC) initiative. They called the June 11 agreement to eliminate the £22 billion debt “hugely significant”.
However, the bishops also highlighted the fact that the G7 finance ministers again failed to agree on how to raise the money necessary to meet the Millennium Development Goals (MDGs), which include the halving of world poverty by 2015.
Referring to their document from 1999, Statement on Poverty Elimination and Debt Remission, Life, Debt and Jubilee, the Scottish bishops argued that “without real commitment to poverty elimination on the part of donor and debtor governments alike, even full debt cancellation will be ineffective”.
None of the G8 countries have met their target of spending 0.7 per cent of national wealth on development aid. America, although the largest donor in real terms, spends just 0.2 per cent.
In order to qualify for debt relief under the HIPC the 18 countries, most of which are in Africa, have undertaken substantial market-oriented financial and management reforms, designed to increase transparency, promote good governance and reduce corruption.
The Scottish bishops noted that these measures were necessary for aid to reach those who need it. But they argued that “debt reduction should be allocated in advance for agreed programmes of health, education and investment that will provide livelihoods and productive employment” and not just as a reward for “budgetary discipline”.
In addition to debt relief, the bishops called for “more and better aid” through trade justice and a pledge from the G8 that debt relief would be financed by new money and not by reducing future aid spending. “Developing countries must be given the chance to trade their way fairly out of poverty,” they said.
The Vatican made similar points in a statement by the Pontifical Council for Justice and Peace on June 14 in which it called debt cancellation “the first of many steps”.
The Vatican statement commended the G8 nations for “finally” erasing some of the debt burden and recalled that the Catholic Church has been pushing for debt relief for many years.
“The decision to forgive the debts of those countries and move toward furthering the debt forgiveness for others is a clear sign of the solidarity that people of developed nations must have for those living in developing countries,” the statement said.
But the statement added: “It is not enough to simply wipe away the debt. An increase in development aid should follow.”