Cancel 100%
Home Up Debt = Poverty Facts on Debt Enhanced HIPC Debt & MDG data Cancel 100% Sachs letter Henry Northover's Speach

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100% Cancellation

 

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Manchester WDM

this is a website for WDM group in Manchester

The World Bank has published a report on the impact of HIPC and a response rejecting 100% debt cancellation.  See summary of the arguments below - or in detail -click 100% Cancellation on the right.

100% Debt Cancellation
Drop the Debt

100% cancellation by WB/IMF was seen as the primary objective of the Drop the Debt campaign for Genoa.  

It was the natural next step.

It was presented as halving their debt burden

 

World Bank and IMF

Rejected the call for 100% cancellation

(see their paper)

In essence the argument is:-

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HIPC has (or will have for those not yet at decision point) reduced their debt burden to below the average for developing countries

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Further cancellation will be at the expense of other funding (either diverted from other poor countries, or diverted from grant aid)

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It would reduce the capacity of the IFIs to finance developments elsewhere.  If written off it would have a larger impact on borrowing.

In addition the response makes the point that there are other factors affecting poverty - conflict, corruption, governance.

They express concern that further debt cancellation will in practice simply reduce aid, negating the benefit.

Finally they assert that if the UN community increased aid to 0.7% the UN target, this would generate US$100bn/a  extra, far more than any debt relief would generate.

In addition they state that the best way for the international community to assist is to open up their markets to the exports of the poor countries - in other words real fair trade!

 

Jubilee Web Group - last updated  26 Januar 2003