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Jubilee Scotland's Open Letter to Gordon Brown

Rt. Hon. Gordon Brown, MP,
Chancellor of the Exchequer,
Treasury Chambers,
Parliament Street,
London, SW1P 3AG

14th November 2001

Dear Chancellor,

Thank you for your letter of 26th October. We are sorry that you cannot come to address us at this time and understand the pressures you are under. We have not, however given up hope that you will be able to accommodate us one day when you are in Scotland. When I wrote before I deliberately did not suggest a particular time or place, but left it to you to tell us when you might be free, and in which town or city you would like to address a Jubilee Scotland rally, and we would do the rest.

Thank you too for the message you sent to be read out at the autumn meeting you thought we would still be holding without you. Although the meeting is not now taking place, we are grateful for your statement and would like to raise some points from it with you.

In your first paragraph you pay tribute to the role the Jubilee coalition has played in standing for the needs of the poor. For our part we have greatly appreciated the role which the UK government has played in trying to achieve substantial debt remission, not least in its lead in remitting UK bilateral debts.

Our primary concern is the public perception, put about by the Government, that the debt crisis is as good as resolved under current processes and that politicians and world leaders can now move on to other issues, such as poverty reduction through helping with education and health care provision. You say that twenty-three countries will now benefit from a total of $54 billion in debt relief. Our ideal would be the cancellation of $300 billion of unpayable debt and our concern is that to date only 5% of this figure has actually been cancelled, despite a sustained international campaign. While we appreciate and applaud the setting up of the new Health Fund, especially in face of the HIV/AIDS pandemic in Africa, we would point out that the continued demand for unjustifiable debt repayments means that vitally needed resources for tackling the AIDS crisis are not available. Why set up funds to give money with one hand, while taking it back in debt repayments with the other?

We remain deeply disappointed with the HIPC initiative, despite all your efforts. We feel it is desperately slow and that the debt cancellation conditions - privatisation, the ending of subsidies on basic goods, the ending of the protection of local producers against competition from large multinationals, the liberalisation of capital inflows and outflows and the charging of fees for health and education - are exceedingly damaging to the poorest people in the HIPC countries.

HIPC takes no account of irresponsible lending, whereby countries were encouraged to take out loans on the basis of overoptimistic or unrealistic forecasts, nor of odious debt lent to oppressive regimes now having to be paid back by the people they oppressed. Nor does it ever acknowledge that in real terms, many of these poor countries have already paid back much more than they ever borrowed.

We believe that the present system of international finance, in which the creditors are also the de facto judges in cases of irretrievable indebtedness, is both ineffective and unjust. Effective debt relief can only come if there is a truly independent body and a new framework for administering national insolvency. The World Bank and the IMF cannot function as UN agencies because their voting structure means that their policy necessarily reflects that of the G7 nations, and not all countries. Only an independent body, with the ability to impose binding settlements on all parties, can properly appraise the levels of indebtedness, the nature of the debts and the ability of the debtors to pay, and also ensure that funds diverted from debt repayments are properly applied for development and poverty reduction purposes.

The Prime Minister, in the present critical situation, has talked about the need for a new world order, based on justice. We note that although both Pakistan and Afghanistan could be classified as Highly Indebted Poor Countries, for a variety of reasons neither has been. It may seem to be highly speculative, but we cannot avoid wondering about the extent to which the present crisis results from the failure of the creditors to recognize the extent to which their policies have generated widespread mistrust in these states. We sincerely hope that this proposed new world order will include deep reforms to the international financial institutions, which have so far failed to address the appalling injustice of debt slavery.

In closing I should say to you that, in lieu of reading your message to our nonexistent autumn meeting, we are putting it on our website, along with this reply from me.

We look forward to hearing from you, and to one day having you address us in Scotland.

With best wishes,
John Harris
Convenor