G7 Finance Ministers End Meetings Without Debt Cancellation Plan for World’s Poorest Countries But Moving Toward Deal
Finance Ministers from the Group of Seven industrialized nations ended meetings this weekend without a plan for debt cancellation for the world's poorest countries but "insisted" that they are "moving closer to a deal" that would allow developing countries to spend less money repaying loans and more money in the fight against HIV/AIDS, the AP/Yahoo! News reports (Aversa, AP/Yahoo! News, 10/3). Last week, several public health, AIDS advocacy and development groups urged G7 finance ministers to support eliminating debt in more than 30 countries. Four AIDS advocacy groups -- ActionAid International USA, Global AIDS Alliance, Student Global AIDS Campaign and RESULTS Educational Fund -- on Sept. 24 released a report, titled "Blocking Progress," that calls on the International Monetary Fund to drop certain conditions it attaches to its loans and debt relief. According to the report, the policies, which are aimed at keeping inflation low and public spending in check, might be making it more difficult for developing nations' governments to improve health care infrastructures. The report also calls on the World Bank to disassociate its lending policies from the IMF (Kaiser Daily HIV/AIDS Report, 9/27).
Debt Relief Plan Details
According to Gordon Brown, British chancellor of the exchequer, the weekend meetings "helped to advance the cause of extending" debt relief for developing nations past the currently discussed levels of approximately 50%, the Washington Post reports. "There's a growing consensus that the next step is (to give poor countries) up to 100% debt relief," Brown said, adding that although there is "a lot of work to be done," the details of the plan will be resolved by next year. However, it is "far from clear how the gap will be bridged" between two differing debt relief plans offered by the Bush administration and the United Kingdom, according to the Post. The U.K. plan would secure billions of dollars from industrialized nations to guarantee that the World Bank has enough funds to continue providing aid to developing nations. The Bush administration plan is much "flimsier" and includes replacing many World Bank loans with grants that "some critics fear may weaken the bank," according to the Post. An unnamed U.S. Treasury official said that negotiations are scheduled for 2005 to discuss how much industrialized nations should contribute to the World Bank's lending program for developing nations. He added that the meeting "offers a particularly promising time to forge a deal" on debt relief, the Post reports (Blustein, Washington Post, 10/3). "I want everybody to know that the United States is fully engaged with our other partners in trying to make sure we find answers to this critical problem," U.S. Secretary of the Treasury John Snow said, adding, "We're prepared to go to debt forgiveness of up to 100%" (AP/Yahoo! News, 10/3).
Advocacy groups "fervently lobbied" for a debt relief plan during the meetings, according to the Post. Although G7 finance ministers did not come to an agreement, Seth Amgott, a spokesperson for the debt, AIDS and trade advocacy group DATA, said that advocacy groups "now think 100% [debt relief] is inevitable," adding, "We will be out of tinkering with a broken system. The existing initiative, while it's generated substantial savings, doesn't free poor countries from the cycle of debt" (Washington Post, 10/3). Goodall Gondwe, Malawi's finance minister and former head of the IMF's Africa department, said that the "fact that powerful members of the bank and the fund are behind this (debt) initiative is a good thing for Africa. We expect something will come out of it" (AP/Yahoo! News, 10/3). However, Marie Clarke, national coordinator of Jubilee USA Network, said that it is "outrageous that the G7 have failed to answer the moral imperative of debt cancellation in the face of the HIV/AIDS pandemic and especially as progress toward meeting the Millenium Development Goals diminishes each day" (Jubilee release, 10/1).