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CSA responds to G8 Debt Relief Announcement: "Cautiously optimistic"

Tuesday, June 21, 2005

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Written by CSA

CSA Response to Debt Relief Announcement: “Cautiously Optimistic”

Last week the G8 finance ministers agreed to pay $40 billion (US) over a 10-year period toward debts owed by 18 of the poorest countries, 14 of them in Africa. This new agreement presents an opportunity for these nations to invest more over the coming years in public services, and has been hailed as a positive step in the right direction. Some groups, however, have criticized the deal because it leaves out many poverty-stricken and neglected countries. It has also been speculated that this deal is a result of the United States’ interest in African oil. Currently Africa supplies 12% of the United States’ oil, and this figure is expected to more than double in the same time period as the debt repayment.

The CSA is very happy to hear of this agreement, as debt relief is certainly a major element of dealing with global poverty, but remains concerned that more is not being done.

CSA Communications Commissioner, Hannah Draper stated “this is certainly a good start because it shows that the West is finally acknowledging their responsibilities to the developing world , but we have to realize that the task at hand involves a lot more than just debt relief - we have to entirely re-prioritize our funds.” She went on to point out that “the UN estimates that for less than half the cost of the Iraq war, clean water, adequate diets, sanitation services, and basic education could be provided to every person on the planet.”

One major issue the G8 was criticized for was not agreeing to double foreign aid over the next 10 years. Agricultural subsidies (in the US and elsewhere) are also seen as a major obstacle to development in many nations because they allow some countries to undercut poorer countries’ prices in the new global market.

Draper continued “It’s important to ask why so many countries are unable to repay World Bank loans. In extreme cases countries end up paying more to service the interest on their loans than they do on health care and education.”

CSA External Commissioner Scott Gilbert said: “We are cautiously optimistic about this announcement. We are optimistic that this relief will truly result in a better standard of living for millions of people. But we are cautious when the president of the World Bank, Paul Wolfowitz, talks of ‘a new attitude in Africa’ and G8 finance ministers offer debt relief with conditions like developing countries must ‘tackle corruption, boost private-sector development’ and abolish ‘impediments to private investment, both domestic and foreign.’ Language like this sounds more like the intent is regime change for private profit, rather than genuine good will. Let’s be clear here – rich countries owe poor countries far more than the other way round.”

The CSA represents over 16 000 undergraduate students. This year the CSA will participate in the Make Poverty History campaign, as well as several local anti-poverty initiatives.


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