Debt relief and growth
Human development advocacy for debt relief, aid and governance
Social justice and debt: changing the landscape
Authors:
H. Northover
Publisher:
Initiative for Policy Dialogue, Columbia University, 2008
This paper addresses some of the policy positions that underpinned the Jubilee 2000 campaign. It particularly focuses on the point that while the arguments of debt campaigners were, at the time, dismissed as the politics of naïve idealists, they soon became part of the new realism in official debt policy. It asks how this shift came about and, going forward, what the key features that can usefully inform official aid and debt policy frameworks are likely to be.
It is argued that human development imperatives need to be considered further upstream in the identification and resolution of debt crises. The paper asserts the that good economics and social justice are not incompatible. It further asserts that in some of the eligible heavily indebted poor countries (HIPCs), the debt relief process gave rise to new in-country political practices where a more inclusive politics emerged when it came to determining how the proceeds from debt relief were to be distributed. It is this more transparent and inclusive politics – where civil society and faith-base groups, the private sector and parliamentarians had influence at key decision-making points – that suggests ways to overcome some of the weaknesses in traditional aid relationships.
Key concluding points include:
- in the post-debt relief landscape neither the HIPC Initiative, nor the latest Multilateral Debt Relief Initiative, nor the 2005 G8 aid commitments make any provision to safeguard against the accumulation of unsustainable or unpayable borrowing
- donors are reluctant to publicise in a format accessible to wider audiences in aid recipient countries anything to do with the volume, purpose or conditions attached to their aid
- the HIPC graduates still remain highly vulnerable economies. Most of those countries have accumulated debt stocks in excess of the HIPC Initiative’s key indicator of debt sustainability
- some of the inclusive decision-making processes and the inventive analytical approaches that formed part of the debt relief exercise and Jubilee campaign have much to contribute to the upstream analysis in avoiding and mitigating debt crises.
