Debt, conditionality and corruption: Civil society strategy session

28 April 2006 | Minutes

Hosted by Jubilee USA, JDC, Eurodad, Latindad, Afrodad and Jubilee South. Notes by Olivia McDonald, ChristianAid.

The strategy session started with a few presentations. Caroline Pearce from JDC discussed economic conditionality and some research they had commissioned into conditions attached to HIPC debt relief. The research showed that HIPC continues to reinforce IMF conditions and there has not really been a shift. For example there remains an emphasis on low inflation, with conditions requiring inflation at between 2-3 per cent for Chad and Cameroon and countries like Malawi facing spending cuts as a result of their fiscal conditions. There continue to be many privatization conditions but there are far less trade liberalization conditions – although there are some in Burundi for example. Of the 11 completion point countries only two have explicit anti-corruption conditions, more have procurement conditions.

Lucy Hayes from Eurodad discussed progress on NGO dialogue regarding responsible lending standards. A lack of transparency makes it difficult for civil society in both the north and south to monitor aid and debt – this was one of the lessons from the recent aid-watchers report about European donors. Civil society has been chipping away at conditionality for awhile, but there has been little change. She argued that civil society would have secure more substantive change if we could really flesh out an alternative, such as responsible lending standards. Such standards are directly relevant to the debt movement as they represent the other side of odious debt. The urgency is further reinforced by the risk that this language could be captured to reinforce the status quo.

Lidy Nacpil argued that groups in the south do not want positive conditionality, a conditionality that brings about positive change. This is seen a violation of sovereignty and a risky strategy – a historical perspective shows that debt and conditionality has generally been used to exploit developing countries. There is no guarantee that this will not happen under a positive conditionality regime. Although supportive of language re responsible lending standards, she believed that campaigners need to take a step back and discuss the language of conditionality. She is not sure we mean the same thing. For example, arguing that donors should not lend to regimes that are completely unaccountable, corrupt and undemocratic is not the same as calling for governance conditionality as it is currently constituted.

During the strategy component of the meeting, various groups reported back on what they were working on. There were then small groups led by each of the presenters. Notes from Jubilee will follow. Contact organisers Jubilee USA Network for more details.