P6_TA(2005)0008

Debt relief for developing countries

European Parliament resolution on debt relief for developing countries

The European Parliament,

- having regard to the meeting of 17 to 21 November 2004 of the "Paris Club", a group of 19 creditor nations, including 12 Member States,

- having regard to its previous resolutions of 25 April 2002 on HIPC debt alleviation [1] and 18 May 2000 on the external debt of poor countries [2],

- having regard to the Millennium Development Goals signed up to by all members of the UN in 2000,

- having regard to the New Partnership for Africa's Development (NEPAD) initiative adopted in October 2001 in Abuja (Nigeria) and subsequently recognised by the African Union as forming part of its socioeconomic development programme,

- having regard to the action plan adopted by the G8 group of industrialised countries in Kananaskis on 27 June 2002 and the conclusions reached by the G8 Presidency in Evian on 3 June 2003,

- having regard to Resolution 2001/27 of the United Nations Commission on Human Rights on the effects of structural adjustment policies and foreign debt on the full enjoyment of human rights, particularly economic, social and cultural rights,

- having regard to the Jubilee 2000 petition, signed by 24 million people, calling for the debt of developing countries to be cancelled,

- having regard to Rule 103(4) of its Rules of Procedure,

A. whereas the majority of Heavily Indebted Poor Countries (HIPCs) are located in sub-Saharan Africa,

B. having regard to Africa's debt burden, estimated at about USD 230 billion, and whereas, according to estimates, low-income African countries pay out about USD 39 billion per year to service their debt,

C. whereas cancellation of debt would release funds for other purposes, with the freed-up money forming part of the government budget and therefore becoming available to alleviate poverty directly,

D. whereas debt relief is one of the targets of Millennium Development Goal 8, which aims specifically to deal comprehensively with developing countries' debt problems through national and international measures to make debt sustainable in the long term,

E. whereas debt relief alone is not a panacea, and does not, in itself, create resources, reduce poverty or promote development; whereas the future of developing countries depends primarily upon good governance and investment in their own people,

F. whereas in 1996 the World Bank, the IMF, the G7 and the Paris Club took the initiative to relieve the debts of HIPCs,

G. whereas according to the 2002 Unctad report, and after two decades of structural adjustment programmes, poverty is continuing to increase,

H. whereas the Paris Club agreed on 21 November 2004 to cut Iraq's public debt by 80 % in order to aid reconstruction of the country, and whereas the debt will be reduced in three stages — 30 % immediately, another 30 % in 2005 and 20 % in 2008,

I. whereas the tragic tsunami in Asia have prompted several calls for affected nations to have their debt suspended in order to help the reconstruction and rehabilitation process,

1. Notes the cutting of Iraq's debt by 80 %; stresses, however, that all creditors, and especially international institutions and national governments, must agree to phase out the debt of the developing world, giving least developed countries (LDCs) priority;

2. Calls on the Commission and the Member States to take the lead, in multilateral and bilateral fora, in phasing out the external debt of developing countries; also asks that they actively pursue the objective of giving 0,7% of GDP as Overseas Development Assistance in order to attain the Millennium Development Goals;

3. Welcomes the calls to suspend the debt of the countries affected by the tsunami; calls, however, for debt relief for other poor countries, as international solidarity should not depend on tragic events;

4. Stresses that debt relief should prioritise LDCs and only be undertaken on the condition that money gained by governments from such relief be channelled towards helping the poorest in their communities;

5. Considers that the public-debt relief process should be speeded up and extended in countries whose governments respect human rights and the principles of good governance and give priority to poverty eradication;

6. Stresses that previous initiatives, including the enhanced HIPC initiative, are still inadequate in the current context of economic globalisation, and emphasises that any such initiatives must be seen as a step towards the phasing out of all debts;

7. Highlights the need, in this context, to adapt the current HIPC initiative to meet the requirements of eligible countries which have not yet reached the decision point due to extreme political instability, and to provide more flexibility in other respects as well, such as the duration of the "track record period", the content of both "track record" and interim poverty reduction strategy papers, and the allocation of debt relief during the interim period;

8. Welcomes, in this context, the postponement of the deadline imposed by the HIPC initiative's sunset clause to the end of 2006, which provides an opportunity for some eligible post-conflict countries to build the necessary track record to enter the initiative; calls for additional debt relief focused on reconciliation and infrastructure rehabilitation for these countries, in order to reduce the likelihood of further conflicts;

9. Considers that any additional funds obtained by governments through debt relief should be allocated to social projects by means of plans agreed with donors and civil society, so as to increase social expenditure in areas such as basic education, primary health care and HIV/AIDS;

10. Calls on the Commission and the Member States to ensure — through effective coordination within the G8 group, the World Bank and the IMF — that no country genuinely committed to poverty reduction, good governance and economic reform is denied the chance to achieve the Millennium Development Goals through lack of finance;

11. Instructs its President to forward this resolution to the Commission, the ACP-EU Council, the African Union, the United Nations, the International Monetary Fund, the World Bank, and the governments and parliaments of the Member States.

[1] OJ C 131 E, 5.6.2003, p. 167.

[2] OJ C 59, 23.2.2001, p. 239.

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