Christian Aid: Blair’s Debt Deal with G7 a "Small Step in Right Direction"

Following the agreement of the G7 finance ministers with British Prime Minster Tony Blair’s G8 plans to offer 100 percent debt relief to some of the poorest countries in the world, Christian Aid - a leading agency of the churches in the UK and Ireland - has responded to the great news that may bring the world one step closer to "Make Poverty History".

Anna Thomas, a Christian Aid debt and HIV expert said, "The debt deal is a breakthrough."

"Selected countries will have their debts completely cancelled - a principle campaigners have long called for. It also renews momentum in the run-up to Gleneagles, and creates pressure on the G8 to deliver more," she added.

"But this is only a start and is nowhere near the action needed to make poverty history."

Christian Aid suggested that the system for debt cancellation should be confirmed. Anna Thomas said, "The G7 finance ministers did not propose any changes to the process by which countries qualify for debt cancellation."

"The amount of debt written off is not huge. Only 18 countries' debt will be cancelled straightaway. Nine more may receive cancellation in the next few years. Yet more than 30 further countries, such as Bangladesh and Haiti, need immediate debt cancellation," she added.

The total amount of the debts to be cancelled that are owed by poor countries to the World Bank, IMF and Africa Development Bank is around US$1.5 billion a year.

Thomas explained that a conservative estimate of the total new funding needed for the world to meet the Millennium Development Goals is $50 billion a year, therefore, $1.5 billion looks less significant by comparison.

The UK-based global anti-poverty campaign "Make Poverty History" has highlighted three main principles the world leaders have to reinforce in order to eradicate poverty in 2005. These include maintaining trade justice, dropping the debt as well as increasing more and better aid.

As soon as the G7 nations fulfilled one of these by stating their will in writing off the debts of some poorer countries, Christian Aid stressed that no major progress has been made on trade justice or on aid. Many poor countries are frequently forced to implement reforms such as trade liberalisation and privatisation, according to Thomas.

"These reforms can actually hurt the poor and erode the benefits of debt cancellation, as the UK government and the Commission for Africa have both acknowledged. Countries may, in fact, have to jump through even more economic hoops in the new debt deal," Thomas said.

Thomas urged the governments to implement fair trade policies in parallel with the debt cancellation so as to maximise its benefits. Especially, Thomas expects the UK government to press the World Bank, the IMF, and the other G7 countries to ensure that all their programmes stop forcing developing countries to liberalise their markets.

G7 governments have also made real progress on HIV, with a commitment that by 2010 everyone in need of treatment should have access to it.

Thomas said, "The HIV/AIDS universal treatment target of 2010 is really good news - as long as funds are identified to implement it at the G8. If this doesn’t happen, the aspiration will not be fulfilled."

"All in all, there is much hard work to be done in the next three weeks. It is more important than ever for there to be a huge crowd in Edinburgh on 2nd July, so that G8 leaders really do make poverty history," Thomas again renewed the call for the coming Make Poverty History rally in Edinburgh next month.