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Press release
The CADTM declares G8 countries’ debt cancellation projects a sham
9 June 2005

Far from the geopolitical strategies and the mean-minded calculations of the major powers, the CADTM (Committee for the Abolition of Third World Debt) affirms that total cancellation of the external public debt for all developing countries, while in fact easy to bring about, is diametrically opposed to what the G8 countries have in mind for the upcoming summit in Scotland at the beginning of July.

Despite statements by leaders of the world’s wealthiest nations, financing the development of third world countries has been the subject of long debate, without a single firm and satisfactory decision being taken so far. Yet it would be very easy to ask the countries of the South to put an immediate stop to repayment of their external public debt in order to use this money for internal development, under the control of their own people and parliaments.

Today’s situation is a complete fiasco. And the various projects being lined up for the next G8 summit are nothing but smokescreens.

First, the projects concern only the debt held by the World Bank and the African Development Bank. In addition, the British proposal only intends to take over repayments between now and 2015 - a far cry from a 100% cancellation of the debt. Whatever the proposals, they boil down to very partial debt relief - given the name of « cancellation » for propaganda purposes. In other words, it is a sham.

Second, these debt relief measures are always conditioned by the progressive opening of Southern economies to the interests of Northern transnational corporations. The lender countries demand the continued privatisation of the public services and natural resources of indebted countries - a logic that admits no hope of improved living standards for the populations concerned.

Third, the countries that are to « benefit » from the G8’s so-called generosity are only a handful - 27 in all - representing less than 10% of the total population of developing countries. The initiative for heavily indebted poor countries (HIPCs), highly publicised since it was launched in 1996, has failed, unable to relieve the burden of debt: according to the United Nations Conference for Trade and Development (UNCTAD), the 27 countries currently concerned will be making bigger debt repayments in 2005 than in 2003.

Fourth, the major development donors would have us believe they will be freeing up funds for Africa when in reality they are as tight-fisted as ever. Official Development Assistance (ODA) remained below 80 billion dollars in 2004, with a large part of it never reaching the communities that need it. On the other hand, debt leads to a constant outflow of capital: developing countries service their external debt to the tune of more than 370 billions of dollars per year.

The CADTM remains extremely vigilant as regards the substance of announcements on debt, the G8 countries having gone back on their undertakings in the past. As of today, no evidence of a massive cancellation worthy of the name has been made public.