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African Social Forum: “We Demand Full Multilateral Debt Cancellation for Africa and the Global South”
by Collectif
15 December 2004

The following statement, in response to the news that the U.K. and the U.S. governments are offering different proposals aimed at 100% multilateral debt cancellation, was circulated at the African Social Forum in Lusaka, Zambia. The endorsements below were gathered in a few hours; more will undoubtedly be forthcoming as the statement’s circulation broadens.

We Demand Full Multilateral Debt Cancellation for Africa and the Global South

Drop the Debt 100% — All Impoverished Countries — No Economic Conditions!

As civil society organizations from across the continent of Africa, we are confronted every day by the devastating reality of the crisis of debt. Debt payments to wealthy institutions like the IMF and World Bank rob our countries of resources we desperately need to provide health care, fight HIV/AIDS, provide education, and make available clean water. Debt is a tool of domination used by rich country governments and creditors like the IMF and World Bank. Conditions attached to debt relief and loans are devastating our economies and undermining our choices as sovereign nations.

For impoverished nations, multilateral creditors — in particular the IMF and World Bank — are the largest creditors. They are also the most powerful: because of their “preferred creditor” status, countries must pay their debts back first to these institutions. If countries do not pay, they are penalized and excluded from most forms of aid and assistance.
The Heavily Indebted Poor Countries (HIPC) Initiative was launched by the World Bank in 1996 to provide a “robust exit” to the crisis of debt faced by impoverished nations. Eight years on, the program has failed to achieve this goal. HIPC has provided too little relief, to too few countries, with devastating conditions. It is time to move beyond the failed HIPC Initiative towards another approach: Full (100%) multilateral debt cancellation for all impoverished nations, without harmful conditions.

We are aware of discussions going on now within the G-7 (in particular proposals by the UK and US governments), the IMF and World Bank, and other forums about possibilities for 100% (full) multilateral debt cancellation. We are encouraged that after many years of half-measures, full cancellation is being discussed at these levels.

However, we must be clear about the principles for such discussions to meet the goals and aspirations of African civil society.

First, 100% multilateral debt cancellation is critical. Attempts to determine a “sustainable” level of debt for impoverished nations desperately trying to address the crises of HIV/AIDS and economic injustice should be rejected. For impoverished nations struggling to meet the human needs of their peoples, full 100% multilateral debt cancellation is the only option.

Second, this cancellation must come without any economic conditionalities. The HIPC program and PRSPs are riddled with conditions such as privatization, indiscriminate trade liberalization, opening up markets, fiscal and monetary targets. These conditions have devastated our economies long enough. Debt cancellation must come without any economic conditions attached. Moreover, we reject and find that the IMF’s Poverty Reduction and Growth Facility (PRGF) must be dismantled and abolished. The PRGF is not a force for development in our countries; the conditions attached to loans from this facility have devastated our economies. It is time to end the role of the IMF in poor countries once and for all; closing the PRGF is a critical first step towards doing this.

Third, multilateral debt cancellation must apply to all impoverished nations, not just the 42 HIPC nations. We reject proposals which only address countries that have reached HIPC “completion point.” Many countries would be excluded from this approach. Moreover, non-HIPC countries must be included in efforts towards 100% debt cancellation. Countries including Haiti, Jamaica, and Nigeria are not part of HIPC, despite their extreme indebtedness.

Finally, we think that the multilateral financial institutions should do their fair share, and should contribute the bulk of the resources to finance debt cancellation. The IMF and World Bank are two of the richest financial institutions in the world. The IMF sits atop more than $30 billion in gold which currently serves no productive purpose. The IMF could sell this gold and use proceeds to cover debt owed to the World Bank and other multilaterals. The IBRD could easily mobilize more than $10 billion in accumulated profits and reserves and could commit a share of its annual multi-billion dollar profit to debt cancellation. The IMF should close down the PRGF facility and use its resources to cancel IMF debt. These are wealthy institutions; it is high time for them to do their fair share and by paying for debt cancellation, begin to acknowledge their role and responsibility in the debt crisis.

We do not believe that concerns about the “additionality” of debt cancellation should be allowed to postpone the full cancellation of the multilateral debt. Cancellation is significantly more valuable to our peoples than additional aid. Aid comes with its own conditions, and often creates more debt. The resources realized from debt cancellation can be used as governments — with ample interventions from civil society — see fit. Aid is a promise we have seen broken far too often; cancellation’s benefits would be lasting.

Endorsed by the following debt campaigners:

Tafadzwa Muropa - Zimbabwe
Sy Koumbo S. Gale - Chad
Constancia de Pina - Cape Verde
James Kashiki - Zambia
Godfrey Mfiti - Malawi
Rev. Lumu Shabani - Democratic Republic of Congo (Kinshasa)
Benoit Essiga - CGT Liberte - Cameroon
Hassan Sayouty - Espace Associatif Maroc - Morocco
Demba Moussa Dembele - Forum for African Alternatives - Senegal
Taoufik BenAbdallah - ENDA - Senegal
Engudat Bekele - PAC - Ethiopia
Bakary Fofana - CECIDE - Guinea
Archinson Mhlata - PCO - South Africa
Pat Dooms - Orange Farm Vision - South Africa
Dao Dounantie - Jubile 2000 / CAD - Mali
Kone Solange - FNDP/ASAPSU - Cote d’Ivoire
Ouattar Diakalia - FNDP - Cote d’Ivoire
Dieng Amady Aly - Forum de Tiers Monde - Senegal
Seydou Ndiaye - ACAPES - Senegal
Abubacar Ndiaye, RADI - Senegal

Lusaka, Zambia
14 December 2004