New loans are not the answer, G8 told

By The Jubilee Debt Campaign

July 4, 2008

Debt campaigners from around the world have called on G8 leaders to face up to their role in creating the food crisis and climate change, as they meet in Japan.

They call on the G8 to cancel the debts of those countries most seriously affected by the food crisis, and not to run up new debts in trying to solve the problems of food price rises and climate change.

Both the food crisis and climate change will feature heavily on the G8's agenda on Monday. But campaigners fear that World leaders may try to alleviate both challenges with fresh loans.

The World Bank will seek endorsement for its Climate Investment Funds - two funds which aim to give upfront money to poor countries for adaptation to "clean" technology and mitigation of the impacts of climate change. Both rely heavily on new lending, a position the UK Government is believed to support, but which has drawn heavy criticism from campaigners.

Meanwhile the World Bank's fund of $1.2 billion to fight the food crisis consists of $1 billion of new loans. Campaigners say this is solving one crisis today, only to create another tomorrow.

Nick Dearden, Director of Jubilee Debt Campaign, said:
"The real debt in the world is actually owed by the rich to the poor world. The rich world is responsible for the vast majority of historic carbon emissions, as well as forcing economic policies onto poor countries which have devastated many of their agricultural sectors in recent years. To make the poor pay for these crises would be grossly unfair. It is time for the G8 to pay its debts for the food and climate crisis."

Amongst their demands, Jubilee Debt Campaign and other debt campaigners are calling on the G8 to:

1. End the financing of projects and policies that contribute to climate change.
2. Respect poor countries efforts to reverse harmful policies that have led to the food crisis.
3. End the practice of using loans and debt cancellation to impose economic conditions on poor countries.
4. Employ restitution and reparations for the huge ecological debt that the G8 owe to poor countries.

Comments

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