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When lobbying an MP it can be particularly effective to ask a question which they need to put to a Minister. Ministers are supposed to reply to questions raised by MPs (whereas they can ignore letters from voters!), in effect taking the lobbying directly to the Minister.
Debt relief under
the HIPC program has virtually stalled for the past year with neither new
initiatives nor the necessary funding. In
spite of the failure to progress the Millennium Development goals for poverty
reduction, the world leaders, through the World Bank/IMF continue to extract
debt service payments from countries in dire poverty.
World Bank & IMF autumn meeting in September is another opportunity to press
British Ministers to insist on expanding the scope and depth of the HIPC
program. Please write to your MP
(If you don’t know there name use your postcode at http://www.locata.co.uk/commons/
) and ask them to ask a question of either Gordon Brown or Baroness Amos (The
new Minister for International Development).
Tell your MP that the forthcoming report from Jubilee Research, in co-operation with CAFOD, Christian Aid, Oxfam and Eurodad shows that even with recent international commitments for funding development (such as Monterrey), HIPC countries will not achieve the debt sustainability that would enable them to meet the Millennium Development Goals. The report also concludes that HIPC needs to be de-linked from damaging economic conditions imposed by the IMF (otherwise known as structural adjustment programmes).
are three possible areas of questions. You
could select any of these or if you feel up to it ask them all!
Each topic is expanded below with an example paragraph you could include
in your letter..
Total Debt Service
Most of us will understand that when repaying debts it is the amount we pay each year rather than the total debt that affects our quality of life! If we take on huge debts such as mortgages, they are spread over many years so that we can afford the annual repayments. The point is that for the governments of poor countries, seeking to invest in education or healthcare, the critical issue is the debt service payments (TDS) rather than the amount owed (debt Stock EDT) which is critical. Noticeably the World Bank and the UK Treasury always concentrate on how much debt stock has been cancelled whilst the debt service payments have not reduced anything like as much. The actual up-to-date figures are hard to come by! Projections for 2003 are only readily available for those countries in HIPC, which have at least reached Decision Point. For the rest the most recent figures are from 2000, but they are hardly likely to be going down! Although debt service payments have not reduced that much they would have gone up considerably without HIPC, nevertheless they are still divert resources from poverty reduction.
suggested formulation of the question could be:-
The information available to
me suggests that the level of debt service payments (i.e. the repayments not the
debt stock) for 2003 will be $6.8bn/a for the 42 HIPC countries compared to
$9.3bn/a in 1998 –a reduction of about 25% and for all the 52 countries
identified by Jubilee 2000, the debt repayments have increased from $23bn/a to
other words, although there may well have been cancellation (or promises) of
debt stock, the poorest countries in the world are still repaying debt rather
than investing in poverty reduction to meet the Millennium Development Goals.
Could you please ask Gordon
Brown, Chancellor of the Exchequer, to clarify exactly how much progress has
been made in reducing the level of debt service payments (TDS) in 2003?
What will the Total Debt Service payments be for the 42 HIPC countries in
2003 compared to 1998 (or best estimate where the figures have not been
will the Total Debt Service payments be for the 52 countries identified by
Jubilee 2000 be in 2003 compared to 1998?
Baroness Amos will also attend the World Bank/IMF
meeting’s Development Committee. Significant
progress has been made in countries such as Uganda through the release of funds
for poverty reduction under HIPC.
Could you ask Baroness Amos if DFID can estimate (even approximately) the
impact of this reduction (of $2.5bn/a) in debt service payments through HIPC on
the MDG goal of halving the number in poverty?
Similarly, if the debts were cancelled totally, what impact would that
have on the numbers in poverty in those countries?
of the more objectionable issues within HIPC is the inclusion of conditions
imposed by the World Bank/IMF before agreeing to any debt reductions.
These are incorporated in the so-called Poverty Reduction Strategy Papers
(which are supposed to be nationally owned and agreed by civil society!) and
generally insist on extensive trade liberalisation and privatisation as required
by the so-called Washington Consensus (They
were previously known as SAPs Structural Adjustment Programs).
These agreements frequently remove any opportunities for governments to
develop their own industries or to protect their economies.
There have been many reports of the failure of these programs, most
spectacularly the collapse of the Zambian Copper industry, the collapse of the
Mozambique cashew nut industry and more recently the famine in Malawi
exacerbated by the IMF pressure to sell of grain stocks.
Some governments have recognised the damage that such IMF policies can
wreak and have therefore declined to join the HIPC program!
One suggested formulation of the question could be
Government and indeed the World’s leaders have committed themselves to meeting
the Millennium Development Goals, primarily of halving the number living in
poverty on under $1/day. Trade liberalisation and privatisation have been the ‘one
size fits all’ strategy imposed by the World Bank/IMF for developing economies
for the past decades yet, especially in Sub-Saharan Africa, they have
spectacularly failed. Meanwhile the
two countries that have made the most progress at reducing worldwide poverty,
China and India have developed their economies and industries behind carefully
controlled protectionist policies.
Amos will attend the World Bank/IMF Development Committee meetings.
In that position she is in a position to influence the policies under
which debt reduction is provided.
Could you ask Baroness Amos, in the context of meeting the Millennium
Development Goals if she can point to three examples of the World Bank/IMF
liberalisation and privatisation policies leading to substantial economic
recovery for an LDC (low development country) to contrast with the examples of
failure in Zambia and Mozambique?
program is currently limited to 42 countries rather than the 52 countries
identified by Jubilee 2000. However
even within the 42 HIPC countries, 4 are excluded because the World Bank has
decided against abstract economic criteria that their debts are
assessments take no account of meeting the Millennium Development Goals or the
level of development as provided by the HDI (Human Development Indicator)
ranking. In addition there are
several countries classified by the UN as severely indebted/low income which also
have low HDI ranking.
details of the countries, debt and HDI ranking see debt&mdg_data
suggested formulation of the question could be:
Amos will attend the World Bank/IMF Development Committee meetings.
In that position she is in a position to influence the policies under
which debt reduction is provided. Could
you ask Baroness Amos, why the following countries are denied debt relief under
HIPC, in the context of meeting the Millennium Development Goals, in spite of
the fact that they are classified by the UN as being
severely-indebted/low-income and also having very poor Human Development
classified as having sustainable debts within HIPC
– paying some $1.2bn/a in debt service and an HDI of 161
– paying $481M/a in debt service and an HDI of 134
– paying $224M/a in debt service and an HDI of 144
excluded from HIPC
– paying some $1bn/a in debt service and with an HDI of 148
– paying $2.8bn/a in debt service and with an HDI of 138
Nepal – paying some $1ooM/a in debt service and with an HDI of 142
Previous questions to MPs!
ACTION: Detailed Questions to MPs on Debt Cancellation
JDC activists will remember that earlier this year JDC and WDM jointly lobbied MPs to sign Early Day Motion 736 on debt. As a result of the hard work of local activists, a majority of MPs signed the EDM, which called for "accelerated" debt relief, and for assessments of the debt relief required by poor countries to be based on the need to meet the UN's 2015 Millennium Development Goals (MDGs). Many MPs forwarded letters they had received in reply to their own enquiries with ministers. These essentially took the view that the Heavily Indebted Poor Countries initiative (HIPC), whilst imperfect, will indeed deliver debt "sustainability" (with top up funding) for those countries that complete the process. The objective of once again writing to MPs is to challenge the assumptions that underlie these ministerial responses, as well as ensuring that MPs themselves are not placated on the debt issue by the Government's official line.
Below is a set of key questions that have been framed bearing in mind recent Government statements. Campaigners are asked to write to their MPs, posing one or more of these. Campaigners may of course include their own questions and perspectives within any letters written, but we urge correspondents to include at least one of the questions below, as JDC aims to ensure that the issues to which they relate are brought to the attention of MPs. Each question has a background note attached. Please use the note(s) to weave the question(s) into your letter using your own words.
Note that the questions refer to the 42 HIPC countries. This is not because JDC believes that debt cancellation is not warranted for the 52 countries that Jubilee 2000 identified as being in need of total, or near-total, debt relief. Rather, it simply reflects the fact that HIPC is the current focus of JDC's campaigning work, and the analyses that JDC and partners have so far conducted in relation to debt and the MDGs relates to this group of countries and not the full "Jubilee 52".
Please also note that the model questions below are directed at the Government i.e. we request that you ask your MP to raise these questions with ministers. You may choose to re-phrase the questions so that they are posed to your MP instead, if you think s/he is unlikely to write to ministers, or if you would like to engage in a dialogue with your MP before pressing him/her to approach ministers.
Thank you in advance for participating in this action.
1. Debt Sustainability and the Millennium Development Goals
The Government's support for HIPC - i.e. their implicit rejection of its reform - is based fundamentally on the view that when countries reach the so-called Completion Point of HIPC their debts will be "sustainable"; the definition of sustainability within HIPC is that a country's debt stock is no more than 1.5 times its yearly export revenues. The major problem with this abstract formulation of "sustainability" is that it does not explicitly take into account the need for the proceeds of debt cancellation to be channelled into human development (tackling poverty; improving health, education, the environment etc.). Put another way, the only debt a poor country should in reality be asked to sustain - in development terms - is that which it can afford to service after it has first funded the basic social needs of its people. This is where the Millennium Development Goals come in: (a) they represent fundamental minimum targets for development in poor countries; (b) these Goals are internationally-agreed, with the UK explicitly committed to develop and implement polices such that Britain makes its proper contribution to meeting them. JDC's argument therefore, and that of many debt campaigns both South and North, is that the HIPC process should set debt cancellation levels as those being necessary to meet the MDGs, accounting for realistic economic growth rates, aid and other revenues. As activists know, it is widely held across the debt movement that such an analysis would lead to HIPC countries being offered full debt cancellation, as well as substantially increased levels of aid and fairer terms of trade.
[It should be noted that the Government argues that HIPC does indeed account for the need to tackle poverty via so-called Poverty Reduction Strategy Papers (PRSPs); these must be produced by poor country governments and approved by the World Bank-IMF before debt stock cancellation under HIPC can occur. Irrespective of the pros and cons of the PRSP process, this nonetheless means that debt cancellation under HIPC will still be limited to that needed to bring the ratio of debt stock to annual exports down to 1.5 (i.e. the "sustainability" criterion above). This will be insufficient to meet the MDGs, especially in the world's poorest region, namely sub-Saharan Africa.]
Jubilee Debt Campaign's position is that full debt cancellation for the world's poorest countries is warranted in its own right, as a simple matter of global social-economic justice. We also make the point however that in practical terms, full cancellation is justified as a necessary (if not sufficient) step towards meeting the MDGs. The first question to MPs therefore is:
Question to your MP:
HIPC's "debt sustainability" criterion is that a poor country's debt stock is deemed sustainable provided it doesn't exceed 1.5 times annual export earnings. Why does the Government not support a criterion for debt cancellation that is instead explicitly based on the resources that a country needs to meet the Millennium Development Goals, especially that of halving extreme poverty by 2015?
2. Cost of 100% Cancellation
A number of objections to 100% debt cancellation are advanced by Government e.g.
- It will reward past poor economic management by poor countries: they will get debt relief but not those countries that have kept their debt to "manageable" levels.
- There is no capacity in poor countries to properly spend debt relief proceeds, so any such proceeds will be wasted.
- It will discourage future lenders for making loans as they will fear losses due to any future large-scale debt cancellations (i.e. 100% cancellation will create "moral hazard")
Each objection can be debated, e.g. :
- Today's poor mustn't pay for any supposed past mismanagement by both lenders and borrowers alike
- Part of the proceeds of debt cancellation should be used to create systems to spend the money effectively, and the option to hold proceeds in trust (with release at a later date) could be retained.
- Some private lenders may indeed be put off in future, but the poorest countries currently receive most of their external assistance via official donors/lenders, and this will continue to be the case after full cancellation. In any case, private lenders are currently deeply wary of investing in poor countries because of their poor credit ratings and because of the economic uncertainty that arises when a country is unable to meet current long-standing debt obligations.
So far as the UK public is concerned however, it is arguably the cost of full cancellation which is likely to be the major stumbling block, plus the view that the UK cannot influence debt policy at the multilateral level. If it can be shown that the cost to UK citizens will be imperceptible (e.g. in all probability no-one has noticed any personal or national economic impact as a result of the UK fully cancelling the bilateral debts owed to it by the 26 countries currently within HIPC), then voters may be strongly sympathetic to the notion of debt cancellation as a "fresh start", irrespective of objections such as the above. Similarly, the UK is one of the major powers on the governing Boards of the World Bank and IMF: these latter institutions generally hold the ultimate view that they can deliver full cancellation if asked to do so by the countries represented on their Boards (principally the G7) - but would need additional financing to do so. Consequently the UK is actually in a position of great influence regarding the cancellation of World Bank and IMF loans. The coupled-question is, therefore:
Question to your MP:
Please ask the Government how much full cancellation of the debts of the 42 countries that have completed, are within, or at the qualification stage of HIPC will cost in total? How much will full cancellation cost the UK, including its share of any additional financing for the World Bank/IMF that may be needed to assist with their own costs of full cancellation?
3. Calls by Other Nations for Full Debt Cancellation for the Poorest Countries
This is quite straightforward. The Irish Government, like some countries of the South, has explicitly called for full cancellation of multilateral (as well as bilateral) debts. Politically, the example of such a call being made by a country so politically close to the UK may have a "shaming" effect . If the position of the UK is that Ireland can make such a call because it will not have to offer as much funding to implement it as the UK would, then that would merely support the notion that the basic objection to full cancellation is in fact financial (see question 2, above). Thus:
Question to your MP
Does the UK Government support the Irish Government's call for a 100% cancellation of low-income country multilateral debts, with any costs to the multilateral institutions (i.e. the World Bank and IMF) being met by the UK and other wealthy countries?
PLEASE SEND COPIES OF ANY REPLIES YOU RECEIVE TO:
Jubilee Debt Campaign
PO Box 36620
Tel. 020 7922 1111
Fax. 020 7922 1122
Any significant updates from this letter-writing action will be posted on the JDC website:
Jubilee Debt Campaign
Tel: 020 7922 1111
Fax: 020 7922 1122
PO BOX 36620, London, SE1 0WJ
Copied from Jubilee Debt Campaign brief
Jubilee Web Group - last updated 11 September 2003