The Jubilee 2000 saw $130bn of debt written off, and yet we now find ourselves in a renewed global debt crisis, says Maria Finnerty of Cafod
The Guardian is right to identify the global sovereign debt crisis as one of the most critical impediments to sustainable development today (Editorial,16 April). Debt relief is urgently needed, but we must also learn the lessons of history. The historic Jubilee 2000 debt relief campaign saw $130bn of debt written off, and yet we now find ourselves in a renewed global debt crisis. This time, action must address the cyclical nature of debt crises.
That countries such as Ghana and Sri Lanka are accepting their 17th IMF bailout packages since independence is a stark illustration of how ineffective existing strategies are at breaking the cycle. Bailout packages often come with harsh stipulations, such as budget cuts, that stifle development, worsen living conditions, and leave economies vulnerable to future debt crises. While the IMF chief, Kristalina Georgieva, noted the urgency of debt action ahead of the Spring Meetings, she continued to prescribe budget cuts as a tool to stabilise debt, despite evidence that spending decreases have little effect on debt reduction.
