Report summary

Executive Summary

This report tracks the progress of poor countries towards debt sustainability under the HIPC initiative; as well as likely progress towards meeting the Millennium Development Goals (MDGs). We go to print as senior policy-makers at the preparatory meeting of the UN Financing for Development Conference appear to have backed down from their commitment at the UN's Millennium Summit in 2000 to ‘free the entire world from want’.

We conclude that:

The British Chancellor’s welcome proposal for an increase in OECD aid by $50bn a year will prove ineffectual in achieving the Millennium Development Goals in the HIPC countries, unless there is 100% cancellation of the debts of these countries;
A high proportion of aid flows are currently being directed towards unproductive debt repayments to institutions like the IMF and World Bank, and not to genuine aid for the poorest people of the world. We believe that this will not be welcome news to OECD taxpayers;
To achieve the first MDG of halving the proportion of people living in extreme poverty in the HIPC countries will not only require 100% debt cancellation; but also an increase in the current level of aid to the HIPCs from $15bn to $46bn a year;
This is less than the increase in US military spending in one year, 2003, and would cost each person in the developed world only $1 per week, or $50 a year;
The world would be a much more secure place if these resources were used for development, rather than for destruction;
Even if the first goal is not achieved, protecting the human rights of millions of people in the HIPC countries will require spending on health, education, water and other social services in order to meet the other Millennium Development Goals;
These expenditures alone will require 100% debt cancellation, plus additional aid of $16.5bn.

Write to the government expressing you concern over this issue

You may find the following addresses helpful:

Your MP's Westminster Address House of Commons London SW1A 0AA Tel: 020 7219 3000

Prime Minister: The Rt. Hon Tony Blair MP 10 Downing Street London SW1A 2AA

Chancellor of the Exchequer: The Rt. Hon Gordon Brown MP HM Treasury Parliament Street London SW1P 3AG

Secretary for Foreign and Commonwealth Affairs ("Foreign Secretary"): The Rt. Hon Jack Straw MP Foreign and Commonwealth Office King Charles Street London SW1A 2AH

Secretary of State for International Development: The Rt. Hon Clare Short MP Department for International Development 94 Victoria Street London SW1E 5JL

World Bank HQ 1818 H Street, N.W. Washington, DC 20433 U.S.A. [President: James D. Wolfensohn]

International Monetary Fund 700 19th Street NW Washington, DC 20431 USA [Managing Director: Horst Köhler]