South Sudan starts life debt free
3 min read3 August 2011
North Sudan has in principle offered to keep all of Sudan’s $38 billion debt, giving the world’s newest country a debt free start.
Photo: Steve Evans
In return for keeping the debt, North Sudan expects to be allowed to proceed through a debt relief process over the next few years.
Jubilee Debt Campaign Director Nick Dearden said:
“It is great news that South Sudan is set to start life debt free. Too often in the past newly independent countries such as Bangladesh, Zimbabwe and South Africa have inherited unjust debts of past regimes.
“The world’s newest country faces many challenges in tackling poverty and inequality. The international community should support it primarily through grants, not loans. Debt leads to resources flooding out of a country in repayments, whilst giving lenders such as the IMF and World Bank control over economic policies, taking away independence.”
Much of North Sudan’s debt dates from loans to prop-up dictator Gaafar Nimeiry during the Cold War or to ‘help’ cope with devastating floods. For instance, the claimed £660 million owed to the UK originated with loans to buy British exports in the 1970s, possibly including arms sales. It has since increased massively due to ridiculously high interest rates charged for the last thirty years. The UK government has refused to reveal what it originally lent money for and what benefit this had for the Sudanese people.
North Sudan is hoping to go through the Heavily Indebted Poor Countries (HIPC) process over the next few years in order to reduce its debt.
Jubilee Debt Campaign Director Nick Dearden said:
“Major changes in the North Sudanese government’s respect for human rights and political accountability are needed before debt is cancelled. But lenders also need to recognise past unjust loans and the role these have played in Sudan’s history. An audit of Sudan’s debt should be held into whether loans have helped or hurt the people of Sudan.
“Rich countries are considering allowing Sudan to participate in the IMF and World Bank debt relief scheme. However this does not cancel all debts, makes countries take out new loans, and would require Sudan to actually pay out more in debt repayments than it is at the moment.
Furthermore, it gives the IMF and World Bank a huge say in the economic policies of the country concerned. Lenders should ensure debt cancellation supports the people of Sudan to have a greater say over economic policies, not create a dictatorship by international financial institutions.”
http://www.jubileedebtcampaign.org.uk/South%20Sudan%20starts%20life%20debt%20free+7163.twl
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