Poverty rate in Africa
At the end of long weeks of negotiations, the finance ministers of the eight industrialized countries (G-8) agreed in a special discussion in London on the omission of debts amounting to 40 billion dollars for the developing countries. The decision, which was achieved largely due to British pressure, is supposed to help African and Latin American countries in their fight against poverty, after years of groaning under ever-increasing debts. Britain's finance minister, Gordon Brown, who was among the main leaders of the move, said that according to the agreement, 18 countries would receive complete and immediate debt relief. Additional countries will receive the option of debt relief later. The agreement will be officially approved at the G-8 summit, which will be held next month in Scotland.
"We are aware of the terrible poverty from which so many people around the world suffer. This is not the time to hesitate, this is the time to act boldly," Brown said at the press conference held upon reaching the agreement. "This huge amount of debt will be written off almost immediately." The British Ministry of Finance announced that nine more countries will receive debt relief within a year to a year and a half; The British also claimed that the number of countries in Africa whose debts would be canceled could eventually rise to 40 - if the countries in civil wars resolve their internal conflicts.
Germany, France and Japan opposed the omission of the debts for a long time, and needed a lot of convincing before agreeing to the proposal. Berlin demanded that the decision be taken on a case-by-case basis, and that each country would have to prove that it is fighting corruption before its debts are written off. Tokyo claimed that there is a "valuable danger" in the complete and comprehensive omission of debts.
The agreement is a personal victory for Brown, who persuaded the G-8 countries to support it. According to him, the agreement would not have been reached without the pressure exerted on the ministers of finance in the eight countries by churches, aid organizations and the general public. The former president of DRAP, Nelson Mandela, wrote in a letter to the finance ministers of the industrialized countries, which was published on Tuesday: "I hope that you will do everything in your power to ensure that you reach a truly historic agreement, to eliminate 100% of the debts. Let us not delay any longer, but send a message of hope that will overcome despair."
The agreement deals with the countries' debts to the World Bank, the African Development Bank and the International Monetary Fund. The 18 countries that will benefit from it are Ethiopia, Benin, Burkina Faso, Ghana, Madagascar, Mali, Mauritania, Mozambique, Malawi, Niger, Rwanda, Senegal, Tanzania and Zambia in Africa, and Bolivia, Guyana, Honduras and Nicaragua in South and Central America. Organizations that worked for the cancellation of the debts welcomed the agreement, but claimed that it was insufficient. "The cancellation of the debts is good news for the 18 countries that will receive immediate cancellation," said an activist in the aid organization ActionAid, "but it will not benefit the millions in dozens of other countries, who desperately need debt cancellation."
Although Britain yesterday managed to convince the other G-8 countries to support the cancellation of the debts, it had difficulty gathering support for the second, and more demanding, initiative it proposed: doubling the amount of aid to African countries. The issue was barely discussed in yesterday's debates, and according to the estimation the USA is one of the main objectors of the initiative. Many organizations that support increasing aid to Africa are expected to participate in a huge demonstration in front of the G-8 summit in Scotland next month.
Brown proposed to the other foreign ministers to establish an international financing fund, which would double the aid to the poor countries to the amount of 100 billion dollars. But since Washington is opposed to the plan, it seems that Brown will be content with establishing only an experimental fund, which at this stage will finance programs for providing vaccines in Africa without the participation of Japan or the USA.
Other proposals to increase aid were discussed in the G-8 discussions yesterday. France has proposed imposing a tax on the purchase of international airline tickets, which will be dedicated to aid to Africa. The president of France, Jacques Chirac, who was the mastermind of the idea, claimed that a tax of one dollar per plane ticket would be able to raise 10 billion dollars a year, which could be used to eradicate AIDS and other diseases in Africa. "This proposal was put on the agenda of the G-8. None of the countries showed any opposition, and the matter was discussed," said Germany's finance minister, Hans Eichel.
But in the European Union and the United States they expressed opposition to the payment of the additional dollar. US Treasury Secretary John Snow clarified that Washington's position on the matter has not changed, but added that if other countries are interested in exploring the possibility, the US will not stand in their way.
African countries will be able to direct the money that will be saved to the fight against poverty
* Why is everyone talking about dropping debts to the third world?
Britain is the country that is hosting this year's summit of the eight industrialized countries, G-8, and therefore has the power to determine the issues that will be on the summit's agenda. The British Prime Minister, Tony Blair, chose two key issues: global warming and aid to Africa. Blair and his Chancellor of the Exchequer, Gordon Brown, want to achieve full debt relief for the poorest countries, a significant increase in aid and a change in world trade rules to facilitate the growth of African countries' economies.
* To whom do the poor countries owe?
Most of the poor countries in Africa owe money to rich countries, to private parties and international organizations - and especially to the World Bank, the International Monetary Fund and the African Development Bank. Although 80% of the debts are to rich countries, a minority of them are also to private parties, some of whom have filed lawsuits against the African countries to ensure their collection.
* To what extent can debt relief be beneficial to the poor countries?
If the poor countries do not have to repay their debts, they can use the money to reduce poverty, improve health and education services for citizens and repair infrastructure in rural areas, which are usually the focus of severe poverty.
* Why did it take so long to reach an agreement?
Among the industrialized countries there were differences of opinion on the question of how to finance the cancellation of debts. It is clear to everyone that additional financial assistance will be required, so that the World Bank and the African Development Bank do not bear the burden alone, and it is still not clear what will happen to the debts to the IMF. The US proposed that the fund sell gold in its possession to cover the cancellation of the debts.
https://www.hayadan.org.il/BuildaGate4/general2/data_card.php?Cat=~~~190383139~~~127&SiteName=hayadan
