U.S. faces mounting pressure to cancel Poor Countries' Debt by Oxfam America 9:23pm 16th Dec, 2004   15th December, 2004    As the United States prepares to hand over the presidency of the G8 to Britain next year it is coming under increasing pressure to help ease the plight of the world's poorest citizens.    The next nudge is likely to come tomorrow, when Treasury Secretary John Snow hosts a meeting in Washington with his British counterpart, Chancellor Gordon Brown. Brown is expected to urge the US government to provide resources to allow total cancellation of the debts of the world's poorest countries, applying the strongest pressure yet from Britain for firm commitments from the Bush administration on increased aid and debt relief in 2005.    Brown said earlier this week that the US and Britain must move further to help developing nations, and that he is optimistic that the US will support 100 percent cancellation of debts owed to the World Bank and IMF by the poorest countries. In particular Brown has been very supportive of using the undervalued gold reserves of the IMF to finance further moves towards debt cancellation.    International agency Oxfam's new report Paying the Price shows that the US, Italy, and Japan are among the stingiest donors of foreign aid—a mere 0.14 percent of national income in the case of the US.    Meanwhile, 45 million children will die needlessly before 2015, Oxfam's research shows, and G8 country aid budgets are half their 1960 levels. Every day, poor countries are paying a staggering $100 million in debt repayments.    Oxfam policy advisor Max Lawson said the US must now make good on the promises it made at October's World Bank and IMF annual meetings to cut debt.    The decision to cancel $29 billion of Iraqi debt was more than all the debt relief so far given to the 41 countries in the five years of the Highly Indebted Poor Country (HIPC) initiative. Iraq shows it is clear that when the leaders of the rich world want to they can easily find the resources to cancel debt.    “Now is the time for the US to produce its checkbook and really work with G8 countries to deliver debt relief for the world's poor, Max Lawson said.    "2005 offers the chance for an historic breakthrough on poverty, but unless world leaders act now the year will end in shameful failure," he said.    Oxfam's report said that, although the G8 nations agreed in 1970 to spend 0.7% of their incomes on aid, none of the G8 members have reached this target. Britain announced in December it would reach the target by 2013, yet the US won't reach the aid target needed to halve world poverty until 2040.    In Zambia, where millions of girls and boys are unable to attend school, the government will spend $150 million dollars more this year on repaying debt than on education. If Snow and Brown really wanted to, they could easily bring an end to this inexcusable situation,said Lawson.    UNITED NATIONS, Dec 9 (IPS News)    "Donor Neglect Deadly - Oxfam", by Thalif Deen.    The world's poorer nations are paying a heavy price in human lives for the failure of the rich to provide the resources they promised to fight global hunger and poverty, humanitarian agency Oxfam said in a report released this week.    If the world fails to act, warned the international body, ''45 million more children will die needlessly by 2015''-- the targeted date for the Millennium Development Goals (MDGs) set by 189 world leaders at a summit meeting in New York in September 2000.    Additionally, said Oxfam, 247 million more people in sub-Saharan Africa will be living on the razor edge of poverty, surviving on less than a dollar a day in 2015, 97 million more children will still be out of school and 53 million more people in the world will lack proper sanitation facilities by that date.    ''The sums that rich countries invest in global poverty reduction are shamefully small,'' the London-based non-governmental organisation (NGO) said in its study, 'Paying the Price'.    At an average of 80 dollars per person per year in rich countries, the investment is equivalent to the price of a weekly cup of coffee.    ''What is more, the wealthier these countries become, the less they have given in aid. Rich countries today give half as much, as a proportion of their incomes, as they did in the 1960s,'' the study noted.    The eight goals for 2015, set at the U.N. Millennium Summit, include reducing by half extreme poverty and hunger; achieving universal primary education; promoting gender equality; reducing child mortality; improving maternal health; combating HIV/AIDS; and ensuring environmental sustainability. The eighth goal calls for a global partnership of rich and poor countries for development.    But most of the rich nations have not only failed to meet their pledge to spend 0.7 percent of their gross national product (GDP) as official development aid (ODA) to the poor (as agreed at a U.N. General Assembly session in 1970), but have also refused to commit to meet their obligations to remove tariff barriers, permit market access, and cancel southern nations' debts.    Currently, the world's poorest nations are paying back ''a staggering'' 100 million dollars a day in debt, according to Oxfam.    But tackling global poverty requires more than money, added the report: poor countries' prospects are also undermined by unfair trade rules, the violent consequences of the arms trade, and the impacts of global warming.    Yet cancelling the debts of 32 of the poorest countries would be ''small change for the rich nations.    The cost to the richest countries would amount to 1.8 billion dollars each year over the next decade -- or on average a mere 2.10 dollars for each of their citizens every year, according to Oxfam. If Italy and the United States were to pay their fair shares, it would cost each of their citizens 1.20 dollars annually.    Oxfam is urging seven leaders of the Group of Eight (G8) rich nations -- the United States, Germany, France, Italy, Japan, Britain and Canada -- to make history in 2005 by cancelling poor countries' debts and increasing ODA. The eighth member of the Group is Russia.    But so far only four nations -- Norway, Denmark, Sweden and the Netherlands -- have consistently met the ODA target -- after nearly 30 years. Five other countries have committed themselves to meet the 0.7 target: Ireland by 2007, Belgium by 2010, France and Spain by 2012 and Britain by 2013, according to a U.N. report released in August this year.    By devoting only 0.14 percent of its national income to development aid, U.S. spending in 2003 was one-tenth of what it invested in its invasion and "rebuilding" of Iraq.    The United States will not reach the aid target needed to halve world poverty until 2040 and Germany until 2087, while Japan is decreasing its aid commitment, according to the study.    Two top recipients of French aid, French Polynesia and New Caledonia, and one top recipient of U.S. aid, Israel, are, in fact, high-income countries.    The Bush administration's ''war on terror'' also threatens to divert aid away from those who need it most. Aid is again being used as a political tool, according to Oxfam, with one-third of the increase in ODA in 2002 resulting from large allocations to Afghanistan and Pakistan.    The goals of development aid are being redefined to suit that new security agenda: in Denmark, Japan, and Australia, ''combating terrorism'' is now an explicit aim of official aid programmes.    Oxfam is also urging both the G8 and other donors to: - provide better quality and more overseas aid funding, including at least 50 billion dollars in extra aid immediately (to meet the MDGs);    - cancel 100 percent of the debt of the world's poorest countries, including bilateral debts and those owed to the World Bank and the African Development Bank;    - fully implement commitments to improve delivery of aid and eliminate the concept of ''tied aid,'' according to which poorer nations have to purchase goods from donor nations, irrespective of their needs.    Asked if she was confident of a positive response from the G8 leaders at their next summit meeting in Scotland in June 2005, Caroline Green of Oxfam said her organisation is hoping the debts of the world's poorest nations would be cancelled by next year.    ''We are looking forward to a decision from the G7 as a follow-up to this year's annual meetings of the G8, the World Bank and the International Monetary Fund (IMF)'', Green told IPS.    She said the G7 has already announced it would produce a paper on its next steps on the debt issue by the end of 2004.    The Oxfam study is also critical of the quality and flow of development aid. For example, 20 percent of ODA from the European Union (EU) arrives at least one year late and 92 percent of Italian aid is "tied" aid spent on Italian goods and services.    Green singled out Italy and the United States as the ''worst offenders'' of such aid. About 70 percent of U.S. aid is "tied," she added.    Funding the poor is not simply an act of charity: it is a both a moral obligation and a matter of justice, argues the report, born of a collective duty to guarantee the rights of all citizens and the responsibility of rich countries to recognise their role in creating the debt crisis, which continues to threaten the prospects of poor countries.    ''A failure to meet these obligations also has consequences for rich countries themselves, with global poverty threatening the prosperity and security of the entire international community,'' the study said.    Time for action to meet the MDGs is running out, yet progress has been ''unforgivably slow''. Only one goal -- halving income poverty -- has any chance of being met, but even this is due to progress in just a handful of countries, it noted.    Poor-country governments must also fulfil their commitments to fight poverty, says Oxfam. But, without finance, these countries will not be able to take advantage of global trade and investment opportunities, or protect their citizens' basic rights to life, good health and education.    The study also urges poorer nations to: spend 20 percent of their national budgets on basic social services to reduce poverty; institutionalise civil society; ensure parliamentary participation in the creation of pro-poor policies; and guarantee transparency and accountability, rights to free and fair elections, freedom of expression and the rule of law.
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