By: Amber Przybysz
In November, the United Kingdom government for the first time published information detailing where debts owed to the UK come from, calculating how much different sectors contribute to the debts that continue to burden low-income countries.[i] The report uncovers that the UK has lent nearly £1 billion to countries including Indonesia, Egypt and Iraq to pay for weapons, some of which have been allegedly used against civilians.[ii]
The amount of debt coming from loans for military equipment includes: 38% in Argentina, 56% in Ecuador, and 23% in Egypt.[iii] While releasing the data is laudable, the figures are questionable, especially when looking at the data that claims only 1% of loans to Iraq were for military equipment.[iv] It becomes especially questionable when previous investigations have revealed that some exports to Iraq were classified as construction when they were actually used for activities such as building a chemical weapons factory.[v]
Perhaps most shocking from the report is the 74% of loans to Indonesia that were used for defense spending.[vi] Of the total £853 in loans, Indonesia spent more than £630 on defense equipment, with much of the money being lent to former Indonesian president General Suharto.[vii] During his time in office from 1967-1998, General Suharto used the loans to purchase British weapons that were then used to crush civilian protests.[viii] Many of the weapons, including aircrafts and armored cars, were used against civilians in East Timor in the 1990s.[ix] Disturbingly, the UK has not stopped exporting arms to Indonesia; from July 2010 to June 2012, the UK licensed £69 million worth of weaponry for sale to Indonesia, with most of that classified as “aircraft, helicopters, drones.”[x]
The recently released data highlights the need for debt audits, similar to the one Norway is voluntarily undertaking,[xi] to determine the legitimacy of debts owed by low-income countries. Since 2010, there has been a yet-to-be-implemented policy to conduct such debt audits in the UK and to rule invalid “any past lending that was recklessly given to dictators known not to be committed to spend the loans on development.”[xii] It is time to stop forcing low-income countries to repay debts taken out by past dictatorial regimes – regimes that in many cases not only used the loans for personal gain but also on oppressing the people of the country. In Indonesia, where nearly half of the population live on less than $2 a day, there are not enough resources to fulfill the most basic of needs, let alone to repay the odious debt. If there was ever the perfect time for a country to conduct debt audits, now is it for the UK, and hopefully other countries will follow closely behind.
[i] UK Export Finance, “Sovereign Debts,” November 2012. http://www.ukexportfinance.gov.uk/assets/ecgd/files/publications/plans-and-reports/sovereign-debt-data/ukef-sovereign-debt-data.pdf
[ii] Kiran Stacey, “UK owed millions by repressive regimes,” The Financial Times, November 5, 2012. http://www.ft.com/cms/s/0/5ec786c4-2760-11e2-abcb-00144feabdc0.html
[iii] UK Export Finance, “Sovereign Debts,” November 2012. http://www.ukexportfinance.gov.uk/assets/ecgd/files/publications/plans-and-reports/sovereign-debt-data/ukef-sovereign-debt-data.pdf
[iv] UK Export Finance, “Sovereign Debts,” November 2012. http://www.ukexportfinance.gov.uk/assets/ecgd/files/publications/plans-and-reports/sovereign-debt-data/ukef-sovereign-debt-data.pdf
[v]Diana Hulova, “Scale of UK arms loans to dictators revealed for the first time,” Eurodad, November 13, 2012. http://eurodad.org/1543961/
[vi] UK Export Finance, “Sovereign Debts,” November 2012. http://www.ukexportfinance.gov.uk/assets/ecgd/files/publications/plans-and-reports/sovereign-debt-data/ukef-sovereign-debt-data.pdf
[vii] Kiran Stacey, “UK owed millions by repressive regimes,” The Financial Times, November 5, 2012. http://www.ft.com/cms/s/0/5ec786c4-2760-11e2-abcb-00144feabdc0.html
[viii] Kiran Stacey, “UK owed millions by repressive regimes,” The Financial Times, November 5, 2012. http://www.ft.com/cms/s/0/5ec786c4-2760-11e2-abcb-00144feabdc0.html
[ix] Richard Norton-Taylor, “Britain owed millions for weapons used by autocratic regimes,” The Guardian , November 6, 2012. http://www.guardian.co.uk/uk/2012/nov/06/britain-owed-millions-weapons-regimes
[x] Jubilee Debt Campaign, “Indonesians paying £20 million for weapons used in repression,” November 30, 2012. http://www.jubileedebtcampaign.org.uk/Indonesians3720paying372037A3203720million3720for3720weapons3720used3720in3720repression+7985.twl
[xi] Gianna Rendano, “Norway: Championing Economic Justice,” Jubilee USA Blog the Debt, September 12, 2012. http://jubileeusa.typepad.com/blog_the_debt/2012/09/norway-championing-economic-justice.html
[xii] Jubilee Debt Campaign, “Vince Cable’s department demanding payment for arms sales to Mubarak,” October 30, 2012. http://www.jubileedebtcampaign.org.uk/Vince3720Cable3727s3720department3720demanding3720payment3720for3720arms3720sales3720to3720Mubarak+7296.twl
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