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The G8 Summit in Kananaskis has produced a deal on debt. This should not come as a surprise since the debt issue has raised a certain amount of consensus in the international community. Rock stars, religious leaders, and over 25 million citizens from around the world participate in the Jubilee movement that calls for debt cancellation.
The debt issue received a prominent place in the G8's plan for Africa. African countries service over 13.5 billion dollars of debt a year to foreign creditors. This figure is above the entire amount offered by the G8 leaders. Such a huge debt is inherently linked to crucial issues like health, education and the fight against AIDs. The debt issue, in fact, has lingered on the G8 agenda for last five conferences without much progress.
Moreover, the Heavily Indebted Poor Countries (HIPC) initiative, sponsored by the World Bank and the International Monetary Fund (IMF), is lacking in many areas. Only six countries have completed the program since in started in 1996. More than 20 countries are mired within the program itself, struggling to meet IMF conditions in order to qualify for relief. More than half of the countries that are going to receive relief will continue to spend more on debt than on health care.
The extra billion dollars promised by the G8 is not a new deal for the HIPCs. For HIPCs to qualify, their debt still needs to be over 150% of their total exports. The G8 leaders were over-optimistic about the price of HIPC goods. The new money will merely finance the resulting shortfall.
The G8 leaders have refused to move further and broaden debt relief. They have not acknowledged responsibility for funding loans to sometimes illegitimate efforts. Debt relief has led to positive education and health initiatives in countries like Uganda, Mozambique, Honduras, and Tanzania. We must not lose sight of the fact that we are dealing with human beings-real people that need access to health and education.