REMARKS BY PRESIDENT MARY McALEESE AT THE HUMAN RIGHTS SEMINAR
REMARKS BY PRESIDENT MARY McALEESE AT THE HUMAN RIGHTS SEMINAR ON “DEBT – AN OBSTACLE TO DEVELOPMENT”
I welcome this opportunity to address you on a subject which has assumed strong significance for the international community. All of us appreciate the extent of the debt burden on developing countries, the servicing of which deprives many of the world’s poorest nations of scarce resources, which are no longer available for the most basic human needs - resources which countries simply cannot afford to lose.
- In countries such as Tanzania, Mozambique, Zambia, Honduras and Nicaragua, Governments have been forced to spend more on servicing their debt than they do on health and education combined. In Ethiopia, where less than 40% of the rural population have access to the most basic health services, debt payments are four times more than public spending on health care. In Tanzania, where 40% of people die before the age of 35, debt payments are six times more than health spending. And in Africa as a whole, where half of all children do not attend school, governments transfer four times more to creditors in developed countries through debt payments than they spend on the health and education of their citizens.
- The devastation caused by Hurricane Mitch in Central America last month has clearly brought a new urgency to this issue. Nicaragua and Honduras - the two poorest and worst affected countries - have exceptionally severe debt burdens, requiring them to repay $2.2m a day simply to service their debt, a debt inherited from the war-torn 1980s. It is difficult to imagine the hardship that this has caused in countries where the average income, even before Hurricane Mitch, was a mere $2 a day.
- While the prompt action by many in agreeing to cancel or reschedule Central American debt has been most welcome, there remains the substantive issue of alleviating debt in the longer term. While the focus of the international community is understandably on those countries which are the victims of such exceptional circumstances, we should not lose sight of the dozens of others for whom the burden of servicing their debt has become a constant drain with little immediate prospect of real relief.
- In many cases, these debts were run up in the 1970s and 1980s on ambitious infrastructural projects or grandiose schemes which amounted to little but which left a legacy of endless repayments. The social costs of repaying these debts are now unfairly borne by those who typically played no part in the decisions in the first instance and who derived little or no benefit from the borrowed money.
- The issue at stake is not debt in itself. Debt is a fact of life for virtually all Governments, and nobody disputes the basic principle that debts should be repaid. But where the burden means that a Government is unable to meet the basic needs of the most vulnerable members of its society, it is clear that an injustice is being committed. The burden is a moral issue which concerns the entire international community.
- Many observers have contrasted the rapid and far-reaching response of the international community to the East Asian financial crisis with the slowness of the response to the debt crisis in the poorest countries. The reaction to the East Asian crisis shows what can be achieved - how quickly resources can be mobilised - once the political will exists to take action. While no-one can dispute the need to safeguard the World economy, we need to address the need for change in an international system in which developing countries may play little part, as well as the moral need to deal with the debt burden of the developing world.
- In 1980, developing countries owed $600 billion. By the end of 1997 this figure stood at $2.2 trillion. Africa’s share of this total amounted to $324 billion – equivalent to over twice the value of all its annual exports. In the 41 most heavily indebted poor countries – the majority of which are in Africa – the debt stock is well over three times the value of exports. A large proportion of this debt is multilateral – owed primarily to the World Bank and the International Monetary Fund.
- The launch of the joint World Bank/Heavily Indebted Poor Country Initiative two years ago gave the international community hope that substantive action would at last be taken to relive the debt crisis -particularly the large and growing burden of multilateral debt. While some progress has been made, the Initiative has been slow to have any real effect. While three countries will benefit from debt relief under the initiative in 1998, some of the most highly indebted countries will not qualify for relief for some years to come. Welcome though the initiative has been, there is a clearly a need to extend it to a larger number of countries, and with a greater sense of urgency and flexibility.
- There is scope for the international community – bilateral, multilateral and commercial creditors – to take a more generous and flexible approach to the heavily indebted poor countries and to take measures to remove the crippling burden of debt on those who are least able to bear it. Only co-ordinated and properly financed international action can have any meaningful effect. But such action needs to be taken sooner rather than later.
- While Ireland is not a substantial creditor nation, we share in the moral obligation to react to the debt crisis. The goal of poverty reduction - which is the primary focus of Ireland’s overseas development assistance policy - cannot be met without concerted international action to stem the haemorrhage of resources caused by the debt burden. The Irish Aid programme is playing its part by providing bilateral debt relief to two of its priority countries, Mozambique and Tanzania - while the Government recently agreed to provide financial support for multilateral debt relief, chiefly through the HIPC Initiative.
- I very much welcome the initiative shown by the Galway One World Centre in organising this seminar. I am certain that it will provide all of you with a clear insight into the critical importance of the dept issue to the developing world.