Press Release

Basic Needs Basket

MDRI Debt Cancellation Welcome, But Not Yet 'Uhuru' for Zambia!

July 2006

Jubilee-Zambia wishes to commend the multilateral creditor institutions, namely the World Bank, the International Monetary Fund (IMF) and the African Development Fund (AfDF) for finally cancelling Zambia's multilateral debts under the Multilateral Debt Relief Initiative (MDRI). In the same vein, Jubilee-Zambia wishes to extend its appreciation to the G8 countries for financing the MDRI as pledged at the Gleneagles Summit in Scotland in 2005.

The Heavily Indebted Poor Countries (HIPC) Initiative proved that both bilateral and multilateral debts can be reduced but the MDRI has gone further to demonstrate that multilateral debts, if accompanied by political will, can be completely written off.

“This could not have happened without civil society exerting sufficient pressure on the international financial institutions (IFIs) to make them respond to the immediate needs of poor countries”, notes Jack Jones Zulu, Jubilee-Zambia Coordinator and Policy Analyst.

As Jubilee-Zambia, we now call on the Zambian Government to use debt relief resources to provide essential services to its people especially the poor communities. Essential services are fundamental to human survival and to a life of dignity as enshrined in Article 25 of the Universal Declaration of Human Rights (1948) and in the International Covenant on Economic, Social and Cultural Rights (1966), which states that everyone has "... the right to an adequate standard of living including food, clothing, housing, health care and necessary social services..."

Therefore, the debt cancellations under the MDRI for selected Heavily Indebted Poor Countries (HIPCs) that include Zambia should carefully be used to mobilise financial resources for development programmes especially investments in education, health, water and sanitation, rural infrastructure, social protection, among many others, without which there can never be attainment of the Millennium Development Goals (MDGs).

We welcome debt relief but with caution. We feel that the gains from debt cancellations for poor countries will not be sustained for long if issues of unfair trade at the international level are not addressed. Western farmers are still heavily subsidised much to the disadvantage of African farmers and producers while market access for African producers still remain unresolved.
At the same time we are aware that other problems that cause debts in poor countries have not gone away especially the secretive nature of loan negotiations in the multilateral and bilateral lender institutions and the weak local loan contraction procedures that are not open to parliamentary oversight and scrutiny.

“In other words, debt cancellation is not yet 'Uhuru' for Zambia and other poor countries for as long as these issues are not addressed. We risk finding ourselves in another debt trap in the near future”, says Mr. Zulu.

Along side these debt cancellations and an improved trade environment, we strongly urge bilateral cooperating partners to increase both the quantity and quality of aid in the spirit and principle of the Paris Declaration, which among other things, stresses aid harmonisation, alignment to country national plans, mutual accountability, monitoring and evaluations for strong impacts on poor communities.

To the World Bank, the IMF and African Development Bank (ADB) we urge them to move away from conditionality imposition to more useful partner agreements and development agenda if Zambia and other countries are to meaningfully develop. Further, we are concerned with the longer timeframe under which debt relief is to be delivered. It is our sincere hope also that the G8 will honour their pledge of additional funds to ensure the MDRI delivers and that it is sustainable.

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