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Debt Relief Works
by Hayley Hathaway
Jubilee USA
 
Dec. 2009
 
Debt relief has allowed poor nations to pay for schools and health care instead of loan interest. A new bill in the U.S. Congress would offer relief to more countries and make lending more responsible.
 
Pressure is building from civil society to build on the successes of debt relief by addressing past odious debt and creating a fairer system for future borrowing.
 
This month, the Jubilee Act for Responsible Lending and Expanded Debt Cancellation was introduced in the US House of Representatives by a bipartisan group of Congressional leaders, including Maxine Waters (D-CA), Barney Frank (D-VT), Spencer Bachus (R-AL), and seven other Republican and Democratic representatives. The bill would increase the number of nations eligible for debt relief from 40 to 62 and create a framework for responsible lending, so countries won"t get back into debt in the future.
 
The bill passed the U.S. House of Representatives in 2008 but did not come up for a vote in the Senate before the congressional session expired.
 
Peter Chibize walked twelve miles from his village in southern Zambia to the nearest health clinic, unsure how he would convince the doctor to treat his chest pains, headache, and cough for free. He agonized until a nurse told him that he did not have to pay. "It was like a dream to me," said Chibize."Not to pay anything when you visit a clinic is amazing."
 
Before debt cancellation, even the most impoverished Zambians had to pay to see a doctor, making it impossible for many to access desperately needed care. Now, health care is free for the poorest.
 
Zambia is one of dozens of countries in Africa, Latin America, and Asia whose debt has been canceled as the result of a citizen-led global movement. Through two international debt deals in 1999 and 2005, more than $100 billion has been delivered back to the world"s most impoverished countries to be used for desperately needed social services.
 
Debt relief now has a 10-year record of success across the Global South. Over this period, countries that have received debt cancellation have seen a 75 percent increase in spending on social services. Drop-out rates for primary school students have decreased significantly in countries that received cancellation.
 
In Ghana, where 30 percent of the population lives on less than $1 a day, debt cancellation has helped the government dramatically increase spending on education, health, and access to water. Primary school enrollment is now at 91 percent, helped by 268 new classrooms. Debt relief funds have also helped build 36 new health care clinics, 10 new hospital wards, and 36 water boreholes.
 
Tanzania has also used its debt cancellation money for education, building 2,500 new schools and putting 50 percent more children in those new classrooms than before.
 
To ensure that the money is used for poverty reduction, countries have to meet strict public management and transparency criteria to make sure funds are being used for poverty reduction.
 
Many impoverished nations shoulder crushing debt burdens, often the legacy of dictators or faulty business deals. Between 1970 and 2002, for example, Sub-Saharan Africa received $294 billion in loans. It has repaid 90 percent of that sum—but because of high interest rates and other factors, $201 billion in debt remains.
 
The principle of debt cancellation is simple: Countries that are no longer forced to use their precious resources to service their debt to wealthy creditors can instead use the funds to provide basic services, like education and health care, to their citizens.
 
The reality is a bit more complicated, and still imperfect. Debt cancellation has historically come with harmful strings attached—for example, requiring impoverished countries to privatize public resources, such as water and education, or to freeze all hiring and salaries for health care workers.
 
On an international level, the United Nations Conference on Trade and Development (UNCTAD) has set up a new initiative to establish a set of guidelines for responsible lending and borrowing. The goal is to set in place commonly agreed practices of responsibility, thus avoiding the build-up of new bad debts.
 
While debt relief has brought better social services to millions of people and freed dozens of countries from the chains of debt, more remains to be done. An estimated 20 additional countries need immediate debt cancellation to solve the basic development crises they face.
 
* Hayley Hathaway is the communications and development coordinator for Jubilee USA Network, an alliance of more than 75 religious denominations and faith communities, human rights, environmental, labor, and community groups working for the definitive cancellation of crushing debts to fight poverty and injustice in Asia, Africa, and Latin America.


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‘Food miles’ mantra can be ‘miles worse’ for climate and communities
by Oxfam, IIED
International Institute for Environment & Development
 
Dec. 2009
 
Western consumer concern over climate change can do more harm than good if it cuts demand for food produced in developing nations, warns a new book by Oxfam and the International Institute for Environment and Development (IIED).
 
The authors say locally produced food can actually cause greater emissions of greenhouse gases, and that consumers can harm the livelihoods of poor farmers in developing nations if they stop buying their produce.
 
The book will be launched at the UN climate change conference in Copenhagen. It has been produced in response to growing calls for consumers to ''eat local'' to help tackle climate change — calls that the book''s authors say do not tell the full story.
 
"Climate change will hit poorer rural people in developing nations first, fastest and hardest," says James MacGregor of IIED. "High-value trade with such nations is critical to build rural economies that are resilient to climate change. The trade in fresh produce is one part of a global solution to this challenge."
 
The book shows that even when food travels a long distance by plane it can result in lower overall emissions than food that travels shorter distances, because of other sources of emissions.
 
Studies show that transport accounts for just 10% of the total emissions in the food chain in the United Kingdom and United States, with the rest coming from food production, processing, distribution and storage.
 
Produce grown in Africa under the sun and flown to Europe can produce lower emissions than produce grown in Europe in heated glasshouses and transported by train or boat.
 
"When consumers focus on ''food miles'' they are ignoring the other social and environmental issues embedded in their shopping decisions," says James MacGregor of IIED. "More than one million livelihoods in rural Africa are supported in part by UK consumption of imported fresh produce. We urge consumers to avoid knee-jerk reactions and think instead of ''fair miles'' and recognise that there are also social and ethical aspects to choices about where food comes from."
 
MacGregor says Western consumption of fruit and vegetables grown in developing nations is critical for some of the world’s poorest farmers and their communities
 
"It enables them to pay for housing, food, healthcare and their children''s education," he says. "Consumers who avoid food simply because it has travelled a long distance are denying development opportunities for the people who need it most."
 
The researchers are not saying locally grown food is a poor choice. "Eating local food when it is in season is a critical element of a balanced diet, and is complementary to eating development-friendly foods out-of-season," says MacGregor.
 
The book argues that as farmers in developing nations contribute so little to climate change, they shouldn’t be penalised because we emit more in the West. It says consumers serious about changing their behaviour in order to reduce their greenhouse-gas emissions should be cycling or walking to their supermarket.
 
"The average Briton''s emissions are 35 times higher than those of the average Kenyan," says Richard King of Oxfam. "It is unfair to penalise these low-emitters and limit their rights to develop by refusing to eat the food they want to sell. Instead Western consumers could do more to limit their own environmental impacts by flying and driving less and by using energy more efficiently."


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