Debt Relief Won’t Ease Loss of EU Sugar Subsidies
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While welcoming as progressive an early June decision of G8 finance ministers to forgive more than 40 billion dollars in debt owed by 18 nations, mostly in Africa, the SAC spoke for many in the Caribbean when it said that the write-off would amount to nothing in a few years if the European Union (EU) goes ahead with proposals to slash sugar prices to producing nations by 39 percent as planned. It would wipe away all the gains from soft loans and debt treatment, the SAC argued, calling on Caribbean government “to expose the deception.” The EU currently pays above market rates for sugar from a number of countries, many of them former European colonies in the Caribbean. For Guyana, the only one of the 15 Caribbean Community nations to benefit from the G8 proposal, the decision would immediately eliminate about 340 million dollars of its 1.1-billion-dollar debt, if there are no major strings attached by the ministers. The G8 represents the world’s most industrialised nations: the United States, Canada, Japan, Russia, Britain, France, Germany and Italy. “For us it is significant, but we need specifics about what exactly the write-off is about, whether there are any conditions, but it would ease the burn on debt repayments,” presidential spokesman Robert Persaud said this week. As if on cue, Pres. Bharrat Jagdeo flew to London for meetings with Chancellor of the Exchequer Gordon Brown, hoping both to clarify the terms of the write-off and to lobby the Tony Blair administration to extend similar terms to the Washington-based Inter-American Development Bank (IDB). Many Caribbean countries owe millions to the IDB, the western hemisphere’s biggest development bank, with terms that are less stringent that the International Monetary Fund (IMF) and the World Bank. However, all of the funds to be forgiven by the G8 ministers are related to debts owed to the IMF and the World Bank. The other countries qualifying for the G8 debt relief are Benin, Bolivia, Burkina Faso, Ethiopia, Ghana, Honduras, Madagascar, Mali, Mauritania, Mozambique, Nicaragua, Niger, Rwanda, Senegal, Tanzania, Uganda and Zambia, all of which have been classified, like Guyana, as Highly Indebted Poor Countries. Pres. Jagdeo has consistently argued that as the biggest lender, similar debt treatment from the IDB would be very meaningful to small, cash-strapped economies. His English-speaking nation on South America’s Caribbean coast owes the IDB nearly 450 million dollars for development projects from road construction to high schools and other educational institutions. Starting next month, Britain will assume the presidency of the 25-nation EU, and Caribbean governments have asked Jagdeo to try to persuade Blair to push the issue of IDB debt forgiveness at the G8 summit in Scotland in July. Ironically, however, it is Britain which has been leading the charge to slash prices paid to Caribbean sugar-producing nations like Guyana, Jamaica, Belize, Trinidad and Tobago, Barbados and St. Kitts and Nevis. This week, the EU was expected to indicate the extent of the price cuts, anticipated as somewhere between 39 and 42 percent starting next year and ending in 2008. If the proposals are passed by EU agricultural ministers and later the EU parliament, Caribbean nations could lose at least 110 million dollars per year. For Guyana, easily the largest sugar exporter at 320,000 metric tonnes per year, the loss could be a staggering 45 million dollars, wiping out any benefits from the G8 decision. SAC director Ian McDonald calls the situation “scandalous”, and wants governments to link the two issues on the world stage, or Caribbean economies would be doomed. “Rich countries give with one hand with much fanfare and quietly take away with the other hand. This is becoming a habit. It is intolerable and needs to be exposed whenever detected,” McDonald argued in a recent presentation and in letters to Caribbean newspapers. “We hope that there will be no requirement to go through a track a record. This does not seem to be the case, but often these things take a long timeàwe are hoping that soon as the Boards of the World Bank and IMF would meet and approve it, that the mode of delivery would be set upon,” he said. “What this would allow us to do is to do what we have been doing — investing more in education, housing, health care, creating better infrastructure for our people, reduce poverty and generate more employment. It is not that significant amount of money but it will go in the general direction that we treat as priority.” (END/2005) |