Why is this campaign so important?

• At the end of 2005, the world’s poorest countries owed US$412 billion to developed countries and to multilateral creditor organisations, such as the World Bank. Yearly interest and principal payments add up to US$43 billion. All of these countries have a GDP of less than US$875 per person per year.

• Desperately poor countries are forced to service their external debts, rather than spending money to provide basic services for their citizens.

• Africa spends US$30 million on debt payments every day, enough money to provide anti-retroviral drugs for every African AIDS patient.

• Indonesia spends US$32 billion in servicing their debt every year and only US$1.5 billion on health care for their population of 218 million. Zambia spends more on debt service than on education.

• Current bilateral and multilateral debt relief programmes (including World Bank and IMF initiatives for debt cancellation) attach onerous conditions to the relief which often harm developing economies and their poorest people.

• The Millennium Development Goals (including the halving of extreme poverty, drastically reducing childhood mortality, and providing universal education) will not be achieved by 2015, unless rapid action is taken to relieve the world’s poorest countries of their external debts.

• Many former colonies inherited large debts upon independence and lending to post-colonial undemocratic governments has only served to exacerbate the problem. The poor should not be punished for the irresponsible actions of their former colonial masters and governments.

Action so far

• Heavily Indebted Poor Country Initiative (HIPC)

The HIPC Initiative is administered by the IMF and the World Bank and promises to reduce developing country debt to ‘sustainable’ (but still very high) levels, if debtor countries agree to implement certain mandated policies. These include cutting government spending, privatising basic services, and liberalising trade, which can be highly detrimental to the poorest members of those countries.

• Multilateral Debt Relief Initiative (MDRI)

Established during the G8 summit at Gleneagles in 2005, the MDRI Initiative cancels all debts owed to the IMF, World Bank, and the African Development Bank for the countries that successfully complete the HIPC programme. Jubilee Debt Campaign estimates that this programme will eliminate about 10% of the amount of debt that needs to be cancelled to make the Millennium Development Goals achievable.

• Bilateral Debt Cancellation

Developing countries also owe money directly to richer countries, some of which (such as Norway) have agreed to cancel some debts. The UK has agreed to cancel all debts for countries that successfully complete the HIPC programme as well as for certain members of the Commonwealth that are not poor enough to qualify for the HIPC Initiative. Other countries continue to make payments on more than £2 billion of debt.

Why would debt cancellation help?

• In African countries which have qualified for the HIPC Initiative, funding for projects aimed at reducing poverty has increased by an average of 6% (and up to 14% in some countries). This means that education and health spending have increased dramatically.

• Less debt means more money to spend on services that will help the world’s poorest countries achieve the MDGs by 2015.

Ways to get involved

• Learn More

Follow the links in this document. Contact either Jubilee Debt Campaign or UNYSA for more information. Read the UNA-UK briefing on achieving economic justice.

• Teach Others

Help raise awareness about the debt relief issue in your community, school or university. You might help run a stall at a fair, put up posters, or just have conversations with your friends and family about the importance of cancelling debt for the developing world.

• Get in touch with your MP

A list of issues that you may wish to raise with your MP can be found here.

• Participate in Jubilee Debt Campaign’s Cut the Strings campaign

Jubilee Debt Campaign is coordinating efforts to pressure the UK government into eliminating the conditions attached to debt relief.