cancellation of the external debt and
recognition of the ecological debt
The debt owed by poor countries to the
IMF and World Bank is crippling, and very
often comes at the expense of essential
investments in people such as education,
health care and environmental services.
Some African countries, for example, spend
an average of US$14 per person each year on
servicing their debts, compared to only
US$5 per person on health care.
Friends of the Earth International and
many other groups have been campaigning for
many years for the unconditional
cancellation of all outstanding foreign
debt owed by poor countries to rich ones,
and to international financial institutions
like the World Bank and IMF. Many of these
debts were accumulated by dictatorial and
criminal regimes and should therefore be
considered illegitimate. Debt and those who
participated in creating it need to be
investigated and judged: the global cry for
debt cancellation is also a call for
justice.
In June 2005, the world’s richest
governments formally agreed to cancel at
least US$40 billion of the debt owed by the
18 most heavily-indebted countries to the
World Bank, the International Monetary Fund
and the African Development Bank. However,
this deal covers only a small number of
heavily indebted countries, and does not
include debt owed to the Inter-American
Development Bank or the Asian Development
Bank, major lenders in the respective
regions. Also, the debt relief will likely
be paid from existing budgets, meaning that
the amounts received by developing
countries will be cut from their aid flows.
The G8 agreement does not impose additional
conditions, which is a notable change from
earlier initiatives. However, the countries
that have been selected have already
implemented economic reforms imposed by the
financial institutions, often with
devastating results.
Friends of the Earth International
welcomes this initiative, as it is an
important recognition that debt relief is
necessary and possible. However we continue
to demand 100 percent debt cancellation,
including debts owed by all poor countries
in economic and social crisis to all
financial institutions, and the removal of
all economic conditions. This is essential
in order to ensure that people in the South
can regain control over economic decisions
that affect their lives.
We are also campaigning for the
recognition of the ecological debt owed by
northern countries to countries in the
South for decades of resource exploitation.
Affected communities in Paraguay and
Argentina, for example, are calling upon
international financial institutions to
provide compensation and remediation for
the environmental and social disruption
caused by the Yacyretá mega-dam. On the
opposite side of the world, Friends of the
Earth Scotland is building alliances
between Scottish and southern communities
in order to address the repayment of the
ecological debt.
The case studies in this report provide
only a tiny sampling of the groundswell of
sustainable, alternative approaches to
poverty eradication that are being carried
out on the community level around the
world. Friends of the Earth International
strongly believes that initiatives like
these are the way forward – not only for
the millions of people suffering from
hunger and poverty today, but for the
future environmental sustainability of the
entire planet.
