MEDIA RELEASE:
Conditionalities undermine G8 debt deal.
June 27, 2005.

Conditions attached to debt cancellation agreements being discussed next week by the G8 is likely to undermine any long-term benefit for the world's most indebted countries according to a briefing paper released today by Australian aid watchdog AID/WATCH.

Whilst AID/WATCH supports the call for debt cancellation and an end to the debilitating cycle of debt the proposal needs to be clearly focused on supporting all indebted countries and conditions such as privatization need to be excluded, according to the paper.

Privatisation of public utilities, a common condition of International Financial Institution (IFI) agreements, has proved ineffective in combating poverty alleviation yet remains a likely outcome of such a proposal according to the paper 'G8 Conditionalities undermine debt deal".

"Attaching conditions like these to aid is bad enough: it amounts to saying 'we will give you a trickle of money if you give us the Crown Jewels.' Attaching them to debt relief is in a different moral league: 'we will stop punching you in the face if you give us the Crown Jewels,' Said George Monbiot recently on the G8 plan.

Further concerns about the deal relate to the small number of countries that will be affected just 18 countries stand to benefit if the deal is ratified and whilst this number may increase to 38 there remain over 60 countries who continue to suffer ongoing debt issues.

"The G8 should be commended for getting the issue of IFI debt back on the international agenda but we need to look at the root of the problem and not just the symptoms' according to AID/WATCH campaigner Tim O'Connor. "A fairer trading system and more aid are elements of an effective strategy in conjunction with debt cancellation but by installing more prescriptive conditions on these suffering nations will undermine any chance of really beginning to tackle entrenched poverty and inequality, said O'Connor.

Arms sales by G8 nations to Africa were also an issue that should be addressed according to AID/WATCH. "Six of the eight G8 countries are among the top 10 largest global arms exporters, and all of the eight export large amounts of major conventional weapons or small arms." Fanning the flames of war is not a way to ensure that poverty alleviation is sustainably addressed and the sale of arms from G8 nations to heavily indebted countries should also be condemned the paper suggests.

For a copy of the Briefing Paper "G8 conditionalities undermine debt deal" see: https://www.aidwatch.org.au/assets/aw00732/G8%20jun%2005.pdf

ENDS

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