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Unbreakable link

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A Jubilee Research report-

The unbreakable link -

debt relief and the millennium development goals

The report, written by Jubilee Research at the New Economics Foundation is jointly published with the Jubilee Debt Campaign

To meet the Millennium Development Goals:-

	To reduce poverty by half -$46bn*
	For health & education -$16,5bn*
	Cancel 100% debt

Aid must be increased from $16bn to $46bn

JDC welcomes the Chancellor's call for $100bn aid fund and supports moves for fairer trade opportunities, but 100% debt cancellation is needed to enable these opportunities to reduce poverty.

More about the Millennium Development Goals

*These figures are just for the 42 HIPC countries

Poverty reduction must come before debt payments

For the 42 HIPC countries, 90% of ODA grants are returned in debt service even after HIPC!

For 6 HIPCs past decision point over 50% of grants are returned as debt service!

(Note, Current total aid flows to the 42 HIPC countries is $16bn, consisting of $8bn in grant aid and $8bn in concessional loans)

The world bank estimates for 65 countries is $111bn/a plus $35bn/a for health and education -see World Bank

Meeting the development goals costs less than the increase in USA military spending; or is just $1/week for each person in the developed world.

MDG goal 1-Halve poverty

Halve the 1,200 million people living on less than $1/day

$46 bn/a

plus cancel all debts

*These figures are just for the 42 HIPC countries

MDG goals 2-7

cost- $30.5 bn, less local funding = $16.5bn

Current level of grant aid -$7.9bn plus loan $7.9bn = $16bn

Debt service $-6.9bn after HIPC relief

Education

Goal 2 Free primary education for everyone

$6.5bn/a

Health

Goal 4 - Reduce infant mortality by 2/3rds -

Goal 5 - Reduce maternal mortality by 3/4trs

Goal 6 - Access to reproductive health services

	$20bn /a for healthcare
	$2.3bn/a for water
	$1.7bn/a for slums

Financing goals 2-7 -$30.5bn

* for the 42 HIPC countries only

Goal 3 Gender Equality

Not costed

Goal 7 Sustainable development

Not costed

JDC argues - Debt relief is better than aid

	International aid (ODA) is steadily declining rather than reaching the UN target of 0.7%
	Debt relief supports the governments own budget and priorities.
	Aid, which is donor and project specific, carries multiple difficulties, from tied aid to onerous and different management requirements.
	Debt relief would be more predictable than aid (which depends on approval of new projects and programs)
	Debt relief has ownership by civil society through the PRSPs (in theory)

These are the World Bank/IMF estimates

They cover 65 countries facing an uphill struggle and 86 countries 'on track'. The current aid is $57bn (of which 33 goes to the 86 on track countries).

They estimate an additional 54bn is required for the 65 countries (total 111bn), of which 22 countries need to address conflict or governance for the aid to be effective.

They estimate the the other goals will cost

Education $10bn

Health-care $10bn

AIDS $15bn

Financing the development Goals - all countries

	Aid currently $57bn
	Poverty extra $54bn
	Health & Education $35bn
	Debt service $21bn (this is just the Jubilee identified 52 countries after reduction by HIPC)

For full details of WB/IMF report to the UN Financing for Development see WB/IMF

Jubilee Web Group - last updated 26 Januar 2003