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New Irish Government Debt Policy Supports TOTAL Debt Cancellation But Argues that this is too difficult to achieve

Our Response:

'If you believe debt cancellation is right
Have the courage of your convictions: Go for it!!'

• The government now supports total debt cancellation for low income countries. That's good news.
  
  
• However, they say cancellation would have to be funded largely by donor countries; that the IMF and World Bank don't have enough money.
  
  
• The government believes that rich countries will not fund total cancellation. Therefore the debt issue will continue to be dealt with through the Heavily Indebted Poor Countries' Initiative.

Changes Ireland is calling for:

• Improvements to the Heavily Indebted Poor Countries Initiative which will include a change in how debt reduction is assessed so that resources needed for social services are taken into account.
  
  
• The debt policy does not, however, spell out the exact changes the government is calling for.

• There are several ways Ireland Aid could fund debt reduction including:
  
  
• Providing money to help some of Ireland Aid partner countries (e.g. Uganda, Tanzania, Mozambique, Zambia, Ethiopia) to repay their debt to specific creditors
  
  
• Providing support to countries with serious HIV/AIDS problems and to countries coming out of conflict e.g. Ethiopia
  
  
• Providing support for civil society groups in Ireland Aid partner countries on advocacy/monitoring work on debt and poverty reduction
  
  
• Supporting capacity building programmes for debtor governments

• We welcome the government's support for total debt cancellation
  
  
• We don't accept their argument that the IMF and World Bank cannot afford to fund debt cancellation. Both institutions have massive reserves
  
  
• We are concerned that the government may pour money in to the failing Heavily Indebted Poor Countries' Initiative rather than press for what they believe is the best option: total debt cancellation.
  
  
• We are disappointed that there is no mention of the need for a fair and independent process to deal with debt. Nor is there any recognition of the role of illegitimate or irresponsible lending by creditors in creating the debt crisis.
  
  
• We welcome the commitment to fund civil society groups working on debt and poverty reduction. The need for this support was stressed by civil society representatives from Tanzania, Zambia, Uganda and Ghana who attended a consultation meeting with Ireland Aid in Dublin last year.
  

The Irish government's new position that total debt of low income countries should be cancelled is a big step forward. It is now up to us to get them to press for this at every opportunity.

We must not let this opportunity pass us by. See the attached action sheet for what you can do.

We will circulate a more detailed analysis of the Government's policy in the near future.


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