Easing debt burden of poor

"Do not delay while poor people continue to suffer," said Nelson Mandela to finance ministers from the G7 rich countries in London…

"Do not delay while poor people continue to suffer," said Nelson Mandela to finance ministers from the G7 rich countries in London at the weekend.

He was invited there by the British Chancellor, Mr Gordon Brown, to help galvanise the meeting into taking action on debt relief and world poverty.

Mr Brown told the campaigning group Make Poverty History after the meeting that this will be known as the "100 per cent debt summit" because it agreed for the first time on a case-by-case analysis of the world's 37 most indebted poor countries "to provide as much as 100 per cent multilateral debt relief".

While he is right to be proud of the collective effort that has gone into putting the subject on the G7's agenda, a great deal of work must be done if this promise is to be delivered on before its summit next July. Mr Brown put proposals for debt relief and new ideas about how to fund an extra flow of aid to the poorest countries, mainly in Africa, so that the Millennium Development Goals agreed at the United Nations in 2000 can be met by the target date of 2015.

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The rich states cannot secure the international stability which underwrites their wealth if basic poverty continues on the scale it exists in the world today. There is a common interest in tackling it and a much greater realisation, spearheaded by Mr Mandela, that this can be done effectively through a combination of debt relief, fairer trade and better delivery of aid.

As always, the devil is in the detail and the small print. There was disagreement between the seven rich states at this meeting about the very principle of debt relief, whether it should be 100 per cent and who should benefit from it. The conditions often attached, like privatisation of public facilities such as water, can be more onerous than the debt itself. The same applies to proposals for new international finance facilities to increase the flow of aid. Mr Brown's plan to double it by selling bonds worth $100 billion on world stock markets, backed by the International Monetary Fund's gold reserves, was rejected by the United States but has the support of other Europeans. This plan could merely involve spending future aid commitments now so as to improve the look of national figures on achieving the target of 0.7 per cent of gross domestic product going to aid, rather than increasing its long-term net flow.

This meeting also heard serious proposals for new international taxes dedicated to specific aid objectives. The most imaginative of these would tax aviation fuel, combining environmental objectives with developmental ones. EU ministers are to discuss it further, since it could be started at regional rather than global level and would give a concrete focus to the widespread demand for increased aid to the poorest countries.

Public pressure and campaigns must be continued if this welcome opening up of the international aid agenda is to be sustained and delivered upon.