The 2005 G8 summit was billed as a summit for Africa.
A debt deal was announced by Gordon Brown. He said that the G8 had agreed debt cancellation for 18 countries, to be delivered "immediately". As of today (January 9th 2006 ) no debt has been cancelled. We take a look at the deal the hold ups and prevarication that have meant the deal has been whittled down, hedged around and delayed.

In 2005 the G8, under pressure from campaigners, agreed a debt deal to wipe out $40bn (£23bn) debt owed by the world's poorest countries. This was a great achievement for campaigners everywhere BUT we were told this is 100% debt cancellation. IT IS NOT.

The positive aspects of the 2005 G8 Debt Deal
The agreement to write off 100% of debt owed to IMF, World Bank and African Development Fund was a great breakthrough for campaigners. IMF and World Bank claimed all through the 1990s 'it can't be done'. This acknowledgment that some countries need cancellation of 100% of debts - and that this cancellation is possible - is a huge step forward, and a tribute to the efforts of campaigners over many years.

Our Reservations
1. Only a very small number of countries 19 (at present) are included in the deal (Benin, Bolivia, Burkina Faso, Cambodia, Ethiopia, Ghana, Guyana, Honduras, Madagascar, Mali, Mozambique, Nicaragua, Niger, Rwanda, Senegal, Tajikistan, Tanzania, Uganda and Zambia) Cambodia and Tajikistan are non-HIPC countries who will receive debt relief
is included.

2. For the other countries (20) to benefit they must fulfil condition laid down under the Heavily Indebted Poor Country Initiative. Many conditions have damaging effects e.g. privatisation of water, so these can negate the benefits of debt cancellation. See our new campaign for 2006 No Strings Attached (link)

3. Many more countries which are not defined as Heavily Indebted Poor Countries need debt cancellation. These are excluded from the deal. There are over 60 low income countries -all are striving to meet the Millennium Development Goals e.g. to halve poverty by 2015.

4. The deal does not cover all multilateral creditors e.g. the Inter-American Development Bank and the Asian Development Bank. Debt owed by Bolivia, Nicaragua, Honduras and Guyana to the Inter-American Development Bank is not included.

5. Countries receiving debt cancellation will have their aid reduced. (New money from the World Bank and African Development Bank will be reduced by the same amount as their debt repayments.)

To find out more about the background to the G8 debt deal click here

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