Debt cancellation success

By Alex Singleton | 12 June 2005

It is good news indeed that G8 leaders have agreed to cancel debt for the world's poorest, as reported by CNN:

Finance ministers from the world's wealthiest nations have agreed to a historic accord to cancel up to $55 billion worth of debt owed by the world's poorest nations.

The Group of Eight (G8) ministers - meeting for a second day Saturday in London - backed a deal that calls for an immediate scrapping of 100 percent of the debt owed by 18 countries.

Those countries - many in sub-Saharan Africa - owe about $40 billion to the World Bank, the International Monetary Fund and the African Development Bank.

The G8 ministers also said 20 other countries could be eligible for debt relief if they meet targets for good governance and tackling corruption - bringing the total package to more than $55 billion.

Here at the GI we have been supporters of debt cancellation. These debts were often taken out by illegitimate dictators who murdered and butchered thousands of their own people. Take Idi Amin, who seized power in Uganda, declared himself President, and murdered 300,000 of his own people. Are Ugandans really responsible for his actions? According to the Uganda Debt Network: "Foreign aid and national resources have been squandered, wasted and invested in the private ventures of corrupt leaders and managers that do not take into account the interest of the common, poor Ugandans." We have to let the past be the past and move on. Saddling today's Africans with the debts of illegitimate rulers doesn't strike us as a very satisfactory situation.

Nevertheless, we agree with Rt Hon. Claire Short MP, Britain's former International Development Secretary, who has said that: "Debt relief and aid alone without really strong action to end conflict, arms supply, start building order, the basic institutions of a state, leave the poor outside the whole development system." Debt cancellation is a help, but on its own it is not going to achieve what we all want: to make prosperity happen throughout Africa.