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DEVELOPMENT: G8 Offers Meagre Debt and AIDS Plan

Emad Mekay

WASHINGTON, Jun 10 2004 (IPS) - Leaders of the world’s most industrialised nations ended their annual gathering Thursday without committing to any major debt relief for poor nations or new financial backing for the fight against HIV/AIDS.

Anti-debt activists, who had raised their hopes that the world was about to see the long-awaited full cancellation of developing countries’ debts, had their hopes crushed when the two-day meeting ended without such a deal. They called the results of the meeting on Sea Island in the State of Georgia fruitless.

Over the two days a buzz developed that the leaders of the Group of Eight (G8) countries would commit to back 100 percent debt cancellation from multilateral bodies like the International Monetary Fund (IMF) for the world’s most impoverished nations.

They met with leaders from six African countries – Algeria, Ghana, Nigeria, Senegal, South Africa and Uganda – Thursday amid hopes of a breakthrough on the issue.

The G8 includes Canada, France, Germany, Italy, Japan, Russia, the United Kingdom and the United States.

UK Prime Minister Tony Blair was believed to have proposed a full debt write-off for poor countries but the G8 leaders instead announced a two-year extension of the Heavily Indebted Poor Countries (HIPC) Initiative, not a definite commitment to full debt cancellation.

HIPC, administrated by the World Bank and the IMF, forgives only some debts of the poorest nations and comes saddled with a package of economic liberalisation pre-conditions that indebted countries must agree to before they qualify for the scheme. It was set to expire later this year.

It is widely believed, even by IMF and World Bank standards, that after eight years HIPC has largely fallen short of providing an end to the debt crisis in the developing world.

“We are committed to fully implementing the HIPC Initiative and to supporting debt sustainability in the poorest countries through debt relief and grant financing,” the G8 leaders said in a statement.

Civil society groups criticised the HIPC extension, adding the only steps that would represent progress would be an immediate moratorium and an inventory of developing nations’ debts.

“At this critical moment, when every minute another African child dies of AIDS, the global community needs 100 percent cancellation of multilateral debt without harmful conditions,” said Marie Clarke, national coordinator of the anti-debt group Jubilee USA Network.

“By failing to seize the opportunity, the G8 has once again chosen baby steps over bold action.”

Activists also say the HIPC extension is cosmetic because of the conditions that are attached to it.

The conditions imposed by the IMF and World Bank include insisting that countries: balance their fiscal budgets; devalue their currencies; implement anti-inflation monetary measures, such as high interest rates; and impose tighter lending policies. They often also pressure governments to cut social spending and impose user fees for healthcare and other services.

The activists vowed to intensify their calls for change into a battle during an election year in the United States, the country with the largest shares in the two public lenders.

Presidential elections are scheduled for November.

“President Bush and the G8 might have found it hot in Georgia in June, but we will turn up the heat even more in this election year on the issue of debt cancellation,” said Clarke. “We will be bringing our calls for 100 percent cancellation to pulpits throughout the country, to the halls of Congress with the JUBILEE Act, and to the streets.”

The Jubilee Act, introduced this month in the U.S. Congress, would require the U.S. Treasury to work with multilateral lenders to achieve 100 percent cancellation of the debts of 50 nations, mostly in Africa, Latin America and Asia.

On their last day of meetings, the G8 leaders also announced an anti-AIDS programme, which was blasted by activists. Almost 30 million Africans are currently living with HIV/AIDS, of whom only two percent have access to life-saving treatment. Roughly 8,000 people – including 6,000 Africans – die of AIDS each day.

The announced Global HIV/AIDS Vaccine Initiative will co-ordinate scientific research to find a vaccine for HIV/AIDS, but received no new funding to fight the lethal disease.

“The best way to meet these challenges is for scientists around the world to work together in a complementary manner,” said a G8 statement.

Three years ago the United Nations created the Global Fund to Fight AIDS, Tuberculosis and Malaria. It has attracted 4.7 billion dollars in financing through 2008 but U.N. officials estimate that is only one-half the amount that will be needed by 2005.

G8 leaders have been criticised for not committing sufficient resources to the fund. The administration of U.S. President George W Bush, in particular, has allotted more than 90 percent of its spending on HIV/AIDS to a national programme, bypassing the Global Fund.

ActionAid called the announcement of the AIDS vaccine programme “a cynical distraction from the real needs of Africans and the real obligations of the world’s wealthiest countries.”

“Africa’s AIDS crisis and the continent’s debt burden are two urgent life-and-death priorities for the continent, yet the G8 today has offered nothing new or concrete on either one,” added Salih Booker of AfricaAction.

“Once again, the now traditional invitation of African leaders to participate in the tail-end of the G8 summit has only served to highlight the asymmetry of power between rich and poor nations, and the growing disparity between the world’s wealthy minority and the impoverished majority,” he added.