From poverty to power - Oxfam-Québec

5 THE INTERNATIONAL SYSTEM FINANCEActive citizens played a large role in obliging governments in bothrich and poor countries to move on the debt issue. The Freedom fromDebt Coalition in the Philippines and Koalisi Anti Utang in Indonesiaboth campaigned against ‘illegitimate debt’. In May 1998, 70,000Jubilee 2000 supporters formed a human chain around the G8 summitin Birmingham, UK and – as politicians inside the meeting laterconfirmed – forced debt onto the summit agenda, which culminatedin the Enhanced HIPC programme a year later. Global campaigningby Make Poverty History and the Global Call to Action against Povertyachieved a similar breakthrough at the G8 summit in Scotland in2005. Each time, governments swore that the latest debt relief initiativewould be the last. Luckily, citizens refused to believe them and, whenthe plight of debtor nations failed to improve, continued to campaignfor more.Naturally, creditors continued to try to set the terms of thenegotiations, but effective states proved themselves able to negotiatebetter terms. Argentina played hardball with the IMF and other creditorsafter its 2002 crisis, and was thus able to rebuild its economy atrecord speed.With HIPC, the creditors began to break new ground by actuallywriting off debts, rather than simply rescheduling them; by includingmultilateral, rather than just bilateral, debt; by dividing relief equitablyamong creditors; and, in the Enhanced HIPC initiative, by basing debtrelief on a ‘poverty reduction strategy’ drawn up by the government inconsultation with civil society (see page 301). The most recent incarnation,the MDRI, has gone still further by offering full cancellation ofcountries’ debts to the IFIs incurred up to certain dates, a limitedapplication of the ‘100 per cent cancellation’ that campaigners hadlong called for and which creditors had long claimed was impossible.Serious concerns remain about both the HIPC and the MDRI, notleast the extent to which they have entrenched the force of, in particular,IMF conditions. Countries must comply with these to get debt relief,which forces them to spend years implementing painful structuraladjustment policies in order to access the debt cancellation that waspromised to them as a solution to an urgent crisis. This is connected tothe fact that the HIPC and the MDRI are designed, implemented, andmonitored by the IFIs, with creditors treated as generous benefactors307