5 May 2010
Jubilee Scotland joined forces with Christian Aid to urge Holyrood to take more action against the capital flight that undermines aid, at the same time unveiling a new report at the Cross Party Group conference. It demonstrated how Malawi and Bangladesh have been severely affected by debt, highlighting the importance of maintaining a focus on this issue despite massive successes for the debt justice movement such as HIPC.

MSP Des McNulty introduced the session with fresh insights from the international debt conference he attended in Berlin recently. He stressed that it is ‘absolutely essential that debt is higher on the agenda than it already is’ as it risks getting shadowed by the ‘sexier’ issues such as climate change. Una Bartley from Christian Aid also presented on tax transparency. As well as how the recession will affect poor countries speakers were concerned with the fact that loans to help deal with climate change will create even more unstable futures.

The Jubilee Scotland report (available below) illustrates the dramatic benefits that debt reduction has had in Malawi. Due to the Highly Indebted Poor Countries Initiative (HIPC) and the Multilateral Relief Initiative (MDRI), Malawi's external debt by 2008 had been reduced from over $3.2 billion, to $750 million. The money saved enabled for real increases in public spending on healthcare and education with diverse benefits including more healthcare professions and teachers, a reduction in under 5 mortality and increased HIV/AIDS services.

In spite of this, there are still many countries that are still dealing with the crippling effects of debt demonstrating the need for continuing pressure. Bangladesh pays more on annual debt repayments than it receives in foreign aid. This is highly problematic considering over 80% of the population are living in poverty and lack many basic services. In 2008, debt repayments amounted to a staggering $2.1 billion, which is more than the combined government spending on healthcare and education in 2006. Bangladesh does not qualify for debt relief initiatives as it debt is not deemed 'unsustainable' as it can 'afford' repayments.

'Now - as much as any time in the past - action is required to ensure that debt does not stand in the way of development' - James Picardo, Jubilee Scotland.