AFRICA/NIGERIA: African countries told to default on debt in AIDS battle

Pambazuka News

http://www.nigeria-aids.org/index.cfm

A call has gone out for African countries to skip their debt obligations under the Highly Indebted Poor Countries (HIPC) debt repayment initiative and reinvest the money into health systems buckling under the strain of the HIV/AIDS pandemic.
Advocates of the plan argue for an “overwhelming practical and conceptual case” for re-cycling the remaining post-HIPC debts – those debts of HIPC countries after the completion of the HIPC process. This money would then be used in emergency grant relief for AIDS.
Economist Jeffrey Sachs, in a message posted to the online AIDS discussion list hosted by Journalists Against Aids (JAAIDS) Nigeria, says: “There is no financial justification for keeping the remaining debt servicing obligations on these impoverished countries. The debt servicing (even after HIPC relief) amounts to a few billion dollars per year, which should on all accounts be re-channelled as grants into urgent social needs.”
Sachs argues that in private there is “hardly a person in the creditor world” (including the White House) that believes that these countries can actually service these debts except at “extreme human cost”.
In this context, the debtor countries can responsibly take proactive leadership by calling for grants to be recycled. Failing this, they could take the step unilaterally, making sure they maintain a transparent record in the use of the funds.
“While (this) is widely seen as radical, it is in fact time-tested and proven. There is a long and distinguished history of such unilateral steps (often secretly cheered by the creditor community). When the actions are solidly justified by the facts on the ground (such as impoverished countries facing an AIDS pandemic), the creditors generally accept (or again, even privately applaud) the actions, and then follow up the unilateral actions by debt cancellation after one or two further years,” writes Sachs.
Dr. Paul Zeitz, Executive Director of the Global AIDS Alliance, agrees that “bold action” is needed from African political leaders to stop AIDS.
He says creating national commissions, national plans and implementation plans are good steps, but that the virus is moving fast and “its devastation can only be checked when we move as fast to stop it”.
He says: “To accelerate the pace of our global and Nigerian response, clearly mega resources are needed urgently.”
But following the G7 summit in Canada, it was not “crystal clear” that the G7 were not prepared to fund the fight against AIDS or the funding requirements of the Global Fund to Fight AIDS, TB, and malaria.
It was also clear that the G7 was not prepared to accelerate debt cancellation for poor countries.
At the same time African governments were still paying $13 billion per year in debt servicing payments to the IMF, the World Bank, and to wealthy G7 creditors.
Nigeria alone was paying $1 billion per year to these creditors.
Zeitz says that at the recent Barcelona AIDS conference, there was an interesting discussion about encouraging African governments to withhold debt-servicing payments and put those resources into transparent and accountable mechanisms to stop AIDS.
One idea was that this money could be placed into the national level Global Fund Country Coordination Mechanisms.
“Based on the urgency for the need to rapidly scale the AIDS response in Nigeria, it would be great to see if civil society in Nigeria would be willing to advocate for the Government of Nigeria to unilaterally withhold debt servicing payments and to put that money directly into the Global Fund mechanism.
“Who could possibly fault Nigeria for taking action to stop AIDS? Who could possibly impose sanctions on Nigeria for taking bold action to stop AIDS? In fact, off the record statements by high level policy makers in the US government indicate that they would actually applaud such bold action by African leaders,” he says. - ENDS