[mgj-announce] Breaking News: G-8 reaches agreement on Debt Cancellation!

[Morrigan]

Hey,
On Saturday June 11th the G-8 (group of eight wealthiest countries) 
reached agreement on debt
cancellation for poor countries. It looks like it will be for 18 
countries but could be for as many
as 38 countries totaling around $55 billion dollars. Groups that have 
been working on debt
cancellation, including MGJ, should take some time to celebrate and to 
celebrate social movements
working against debt. But as you will see below (point two is the actual 
G-8 statement) we still
have a lot of work to do. The cancellation is not for all the countries 
who need it and comes with
plenty of economic conditions. I think it would be great if MGJ could 
come up with a little
"activist brief" on this development as part of our call for folks to 
protest the IMF/WB meetings
in the fall. I mean it is more important then ever to keep the pressure on!

Below:
1.) Reuters article
2.) G-8 Statement
============================================

1) Reuters: Rich nations agree on African debt relief
Sat Jun 11, 2005 09:33
AM ET

By Justyna Pawlak and Luke McCann
LONDON (Reuters) - The
world's wealthiest countries agreed on Saturday to write off more than $40
billion of African debts.

The deal struck by finance ministers from the
Group of Eight industrialized nations is part of a British-led campaign 
to rid
sub-Saharan Africa of poverty and diseases such as malaria and AIDS that 
kill
millions every year.
British Finance Minister Gordon Brown said the deal
would provide 100 percent write-offs "immediately" for 18 countries and 
that
more countries would qualify for relief later.

"This is the most
comprehensive statement the finance ministers have ever made on debt and
poverty," he told a news conference.

"This is not a time for timidity,
this is a time for boldness."

The accord covered debts to international
lending agencies such as the World Bank, African Development Bank and
International Monetary Fund.

Britain, chairing the G8 club this year,
was determined to get an accord on debt at the talks in London but faces 
a far
harder time drumming up support for a doubling of aid to Africa ahead of a
meeting of G8 leaders in Scotland next month.

Pop star Bob Geldof and
others are urging a million people to turn up in Scotland to demand a 
deal on
aid for Africa.
Brown had sought backing for an International Finance
Facility (IFF) that would double aid to the poorest countries to $100 
billion by
issuing bonds using rich nations' development budgets as collateral.

But
Washington has opposed the plan so Brown is likely to
launch a pilot IFF
project instead that would provide funds for vaccination programs in Africa
without U.S. or Japanese support.

Turning to their own economic
problems, the ministers issued a communique saying growth was likely to 
be a
little less strong this year than last and renewing declarations that 
high world
oil prices and other imbalances posed risks.

==================================

G-8 Finance Ministers Statement on Development and Debt
G8 Finance
Ministers’ Conclusions on Development, London, 10-11 June
2005

1. We reaffirm the commitments we made at our meeting in February this year
to help developing countries achieve the Millennium Development Goals by 
2015,
to make particular efforts in Africa, which on current rates of progress 
will
not meet any of the Millennium Development Goals by 2015, and to set out 
for G8
Heads of Government and States the steps we believe can be taken to further
implement the Monterrey Consensus on an open world trade system; 
increased aid
effectiveness; absorptive capacity; increased levels of aid; and debt
relief.
2. We reaffirm our view that in order to make progress on social and
economic development, it is essential that developing countries put in 
place the
policies for economic growth, sustainable development and poverty 
reduction:
sound, accountable and transparent institutions and policies; macroeconomic
stability; the increased fiscal transparency essential to tackle 
corruption,
boost private sector development, and attract investment; a credible legal
framework; and the elimination of impediments to private investment, both
domestic and foreign.
3. We reaffirm our view of February that it is crucial
that the international community improves the effectiveness of aid. In
particular bilateral and multilateral donors need to: harmonise their
operational procedures; align aid behind country-owned priorities for 
growth and
poverty reduction; and provide for measurable results. Donors must also: 
focus
their aid on poverty reduction; enhance efforts to untie aid, based on DAC
principles; and deliver aid in a more predictable way. We welcome the 
progress
made at the Paris OECD DAC High Level Forum in March, and call on the 
OECD DAC
to set by September this year, ambitious and credible targets against 
all the
indicators of progress agreed at the March meeting.
4. A successful outcome
for the Doha Development Agenda, our highest common priority in trade 
policy for
the year ahead, will bring real and substantial benefits to poor 
countries. The
Hong Kong Ministerial in December will be a critical step towards a 
successful
outcome of the DDA in 2006, which delivers substantial increases in market
access for developing countries; establishes a timetable for the 
elimination of
all trade-distorting export support in agriculture; and provides effective
special and differential treatment for developing countries.
5. However, not
all countries will benefit in the short term from reductions in trade 
barriers.
Some countries lack the capacity to produce and deliver goods to 
international
markets competitively; for others, the transitional costs of moving to 
more open
markets may be substantial. We also recognise that poor countries face
particular problems and need the flexibility to decide, plan and sequence
reforms to their trade policies to fit with country-owned development
programmes. We commit to provide support to enable developing countries to
benefit from trade opportunities. We call on the IFIs to submit 
proposals for
the Annual Meetings for additional assistance to countries to develop their
capacity to trade and ease adjustment in their economies, based on a 
systematic
analysis of transition costs, so they can take advantage of more open 
markets.

6. Tackling diseases that undermine growth and exacerbate poverty in
developing countries will require not only strengthened health systems, 
but also
improved treatment, including universal access for AIDS treatment by 
2010 and
development of vaccines, including for HIV and malaria. We have made 
progress
this year in implementing the Global HIV Vaccine Enterprise agreed at Sea
Island, and are committed both to taking this further; and to scaling up 
our
support for vaccines and medicines research through the successful Public
Private Partnerships model. We call for a report on progress by the end 
of the
year. We recognise also that advance purchase commitments (APCs) are
potentially a powerful mechanism to incentivise research, development 
and the
production of vaccines for HIV, malaria and other diseases. We asked 
Minister
Siniscalco to consult the relevant institutions, governments and 
industry, with
the aim of developing concrete proposals by the end of this year.
7. The
Enhanced HIPC Initiative has to date significantly reduced the debt of 27
countries, and we reaffirm our commitment to the full implementation and
financing of the Initiative. Moreover, individual G8 countries have gone
further, providing up to 100 per cent relief on bilateral debt. However, we
recognise that more still needs to be done and we have agreed the attached
proposal. We call upon all shareholders to support these proposals which we
will put to the Annual Meetings of the IMF, World Bank and African 
Development
Bank.
8. We also recognised at Monterrey that a substantial increase in ODA
and private capital flows will be required to assist developing 
countries to
achieve the Millennium Development Goals. We acknowledge the efforts of all
donors, especially those who have taken leading roles in providing and
increasing ODA and committing to further increases.
9. Specifically we
welcome: the progress the EU has made towards the 0.39 per cent ODA/GNI 
target
agreed at Barcelona; the announcements by France and the UK of 
timetables to
reach 0.7 per cent ODA/GNI by 2012 and 2013 respectively; and the recent EU
agreement to reach 0.7 per cent ODA/GNI by 2015 with an interim target 
of 0.56
per cent ODA/GNI by 2010 - a doubling of EU ODA between 2004 and 2010. 
In line
with the EU agreement, Germany (supported by innovative instruments) and 
Italy
undertake to reach 0.51 per cent ODA/GNI in 2010 and 0.7 per cent 
ODA/GNI in
2015. We welcome the tripling of US ODA to Sub-Saharan Africa and the near
doubling of US ODA to all developing countries since 2000. The US now 
accounts
for roughly 25% of all ODA to Sub-Saharan Africa. In addition, we 
welcome the
launch of the Millennium Challenge Account and the President’s Emergency 
Plan
for AIDS Relief. We welcome Japan's commitment to double its ODA to 
Africa over
the next three years and Canada's budget plans to finance its commitment to
double aid levels from 2001 to 2010, and to double aid to Africa by 
2008. In
addition, we welcome Russia's $2.2 billion contribution to the HIPC
Initiative.
10. As we prepare for decisions at the G8 Summit in Gleneagles we
continue our work programme on: the IFF and its pilot, the IFF for 
Immunisation;
some of the revenue proposals from the Landau Report, including a pilot 
project,
supported and led by France and Germany, for a contribution on air travel
tickets to support specific development projects and to refinance the 
IFF; the
Millennium Challenge Account; the Enhanced Private Sector Assistance 
with the
African Development Bank; and other financing measures; so that 
decisions can be
made on how to deliver and bring forward the financing urgently needed to
achieve the Millennium Development Goals.
11. Nigeria is key to the
prosperity of the whole continent of Africa. We welcomed Nigeria’s 
progress in
economic reform as assessed in the IMF's intensified surveillance 
framework,
noted its move to IDA-only status, and encouraged them to continue to 
reform.
We are prepared to provide a fair and sustainable solution to Nigeria's 
debt
problems in 2005, within the Paris Club.

G8 Proposals for HIPC debt
cancellation
Donors agree to complete the process of debt relief for the
Heavily Indebted Poor Countries by providing additional development 
resources
which will provide significant support for countries' efforts to reach 
the goals
of the Millennium Declaration (MDGs), while ensuring that the financing 
capacity
of the IFIs is not reduced. This will lead to 100 per cent debt 
cancellation of
outstanding obligations of HIPCs to the IMF, World Bank and African 
Development
Bank. Additional donor contributions will be allocated to all IDA and AfDF
recipients based on existing IDA and AfDF performance-based allocation 
systems.
Such action will further assist their efforts to achieve the MDGs and 
ensure
that assistance is based on country performance. We ask the World Bank 
and IMF
to report to us on improvements on transparency on all sides and on the 
drive
against corruption so as to ensure that all resources are used for poverty
reduction. We believe that good governance, accountability and 
transparency are
crucial to releasing the benefits of the debt cancellation. We commit to 
ensure
this is reaffirmed in future bilateral and multilateral assistance to these
countries.
Key elements:
§ Additional donor contributions will be
allocated to all IDA and AfDF recipients based on existing IDA and AfDF
performance-based allocation systems.
§ 100 per cent IDA, AfDF and IMF
debt stock relief for Completion Point HIPCs.
§ For IDA and AfDF
debt, 100 per cent stock cancellation will be delivered by relieving
post-Completion Point HIPCs that are on track with their programmes of 
repayment
obligations and adjusting their gross assistance flows by the amount 
forgiven.
Donors would provide additional contributions to IDA and AfDF, based on 
agreed
burden shares, to offset dollar for dollar the foregone principal and 
interest
repayments of the debt cancelled . Additional funds will be made available
immediately to cover the full costs during the IDA-14 and AfDF-10 
period. For
the period after this, donors will commit to cover the full costs for the
duration of the cancelled loans, by making contributions additional to 
regular
replenishments of IDA and AfDF.
§ The costs of fully covering IMF debt
stock relief, without undermining the Fund’s financing capacity, should 
be met
by the use of existing IMF resources. In situations where other existing 
and
projected debt relief obligations cannot be met from the use of existing 
IMF
resources (e.g. Somalia, Liberia, and Sudan), donors commit to provide 
the extra
resources necessary. We will invite voluntary contributions, including 
from the
oil-producing states, to a new trust fund to support poor countries facing
commodity price and other exogenous shocks.
§ Globally and on this
basis we are committed to meeting the full costs to the IMF, World Bank and
African Development Bank. We will provide on a fair burden share basis
resources to cover difficult-to-forecast costs, in excess of existing 
resources,
to the IMF, IDA and AfDF over the next three years. Subject to further 
analysis
by the institutions we will provide up to $350-500 million for this 
purpose. We
are also committed, on a fair burden share basis, to cover the costs of
countries that may enter the HIPC process based on their end-2004 debt 
burdens.
We will also seek equivalent contributions from other donors to ensure 
all costs
are covered and we will not jeopardize the ability of these institutions 
to meet
their obligations.Utilize appropriate grant financing as agreed to 
ensure that
countries do not immediately re-accumulate unsustainable external debts, 
and are
eased into new borrowing.

We call upon all shareholders to support these
proposals which would be put to the Annual Meetings of the IMF, World 
Bank and
African Development Bank by September.