G8 Cancels Debt for 18 Poor Nations
JENNIFER LUDDEN, host:
From NPR News, this is ALL THINGS CONSIDERED. I'm Jennifer Ludden.
The G8 group of industrialized nations took a big step toward alleviating Third World debt today. It agreed to cancel the debt of some of the world's poorest countries. The move drew widespread praise, though critics are calling for much more aid. NPR's Anthony Kuhn reports from London.
ANTHONY KUHN reporting:
At a press conference following the two-day meeting of finance ministers, Britain's Gordon Brown said his country was striving for nothing short of a new deal between rich and poor nations.
Mr. GORDON BROWN: This is not a time for timidity but a time for boldness and not a time for settling for second best but for aiming high. And I can confirm that the G8 finance ministers have agreed a hundred percent debt cancelation for the heavily indebted poor countries.
KUHN: Eighteen of the world's poorest countries, mostly in sub-Saharan Africa, will have some $40 billion in debt canceled almost immediately. Brown said the G8 nations will help lenders like the World Bank finance the debt cancellation with the US pitching in up to $1.75 billion in the next 10 years. Another 20 countries could have their debts canceled if they meet lenders' standards for economic reform and transparency. Ethiopia is one of the 18 beneficiaries. Ethiopia's ambassador to Britain, Fisseha Adugna, says that his country has worked toward such standards but remains in poverty.
Ambassador FISSEHA ADUGNA: The government has impacted on reform. We have the right policy in place, but at the same time, there are so many challenging issues including debt that will hamper the progress of the economy. So the cancellation of the debt, if it is totally canceled, then it will be very much beneficial to Ethiopia and to many African countries. There is no question about that.
KUHN: Uganda is also set to have its debt canceled, but Ugandan journalist and former World Bank consultant, Andrew Mwendas, was not impressed with today's decision because he's seen it happen before.
Mr. ANDREW MWENDAS (Ugandan Journalist): When Uganda was forgiven its debt in 1998, it went on a renewed borrowing spree and then indulged itself in very expensive spending, and seven years later, Uganda's debt has more than doubled and is now unsustainable. It all boils down to bad governance.
KUHN: International aid groups have expressed disappointment at the result so far. Henry Northover is an analyst with the Catholic Agency for Overseas Development.
Mr. HENRY NORTHOVER (Analyst, Catholic Agency for Overseas Development): This has been like pulling teeth, you know? This is a small amount of additional money for the world's poorest countries from the world's richest, and it's been an enormous political and campaigning effort to get this far. OK. We've got a good deal here as far as the debt relief for those eligible countries, but we need much more.
KUHN: Next month when G8 leaders gather in Glen Eagle, Scotland, Britain will be pushing for a larger effort to increase aid flows to Africa. Gordon Brown noted the just debt cancellation will free up $1.5 billion a year for the 18 nations to spend on health and education, but the UN has suggested that a hundred billion dollars will be needed each year in order to reduce poverty by half in the next decade, and that still leaves a long way to go. Anthony Kuhn, NPR News, London. Transcript provided by NPR, Copyright NPR.