Global Policy Forum

The Spark that Lit Global Revolt against Poverty

By Charlotte Denny and Larry Elliot

Jubilee 2000, sponsored by the Guardian, bore amazing fruit. Millions of campaigners around the world won a pledge to write off $100bn owed by the poorest states, giving hope to those like Peru.

When the retrospectives of 1999 are broadcast, the image used to represent popular protest will no doubt be the battle of Seattle: the demonstrations outside the World Trade Organisation meeting in November which pitted the opponents of further economic liberalisation, trade unionists, environmentalists and anarchists, against the Darth Vader-style local police. Yet the year has seen remarkable progress for a quieter though equally determined public campaign which has brought debt relief within the grasp of some of the world's poorest countries.

Backed by churches and development agencies, Jubilee 2000 has mobilised thousands of ordinary people into linking hands around meetings of the global economic powers, to draw attention to the plight of third world countries which spend four or five times as much on paying back their debts to the west as they do on health and education.

Although much remains to be done before Jubilee 2000 signs off at the end of next year, the groundswell of grass roots support has changed government thinking on a complex and difficult issue. The campaigners notched up another victory earlier this month when Britain announced that it will write off all debts owed to it by the 41 countries which the World Bank and International Monetary Fund have singled out as most in need of debt relief.

Five years ago, aid agencies and development groups found it difficult to get politicians interested in third world debt. The international institutions argued that writing off debts would only encourage other countries to default, and that any money saved would be wasted on the bureaucracy or the military. Britain was one of the first countries to recognise that many impoverished countries would never succeed in escaping from the debt trap without help from the rest of the world. Led by the then chancellor Kenneth Clarke, it persuaded the international lenders in 1996 to discuss a coordinated approach to reducing the burden on the worst affected countries. But until this year, progress was snail-like - in three years only four countries qualified for some debt relief - and the amount they received was derisory, campaigners claimed.

Jubilee 2000 changed the terms of the debate. Drawing on Old Testament ideas, it called for a once and for all loan write-off to coincide with the new millennium. The proposal caught the public imagination and turned the discussions on debt relief from a purely technical discussion among global bureaucrats into a moral argument about justice between rich and poor.

This culminated in the G7 leading industrial countries in Cologne in June promising to reduce the debt stock of the most severely affected states by $100bn (£62.5bn). To qualify, countries have to prove that the money saved on servicing these debts will be spent on anti-poverty measures such as health and education. As well as meeting the objections of critics who argued that the money would be wasted, this has drawn attention to long neglected international commitments for halving global poverty by the year 2015.

While the campaigners have won the public opinion battle and changed the terms of the debate in government, behind the scenes the fight to deliver real help to the 41 most indebted countries is far from won, as the chancellor, Gordon Brown, acknowledged before Christmas.

Since meetings of the World Bank and International Monetary Fund in September, progress has stalled and in some respects the campaign has gone backwards. Despite President Bill Clinton's pledge to forgive 100% of American loans to the most affected countries, the White House has failed to get congressional approval for the money it promised to raise for the World Bank and IMF's share of debt relief.

Despite this, there is enough money in the kitty from other G7 countries - notably Britain - to get debt relief started. The big battle ahead is about what should be in the poverty reduction plans. While the IMF and the US treasury favour detailed plans, the World Bank and some G7 countries are more concerned about getting the broad outlines right. The plans are supposed to be the result of national consultation in the countries concerned, which is impossible to do quickly.

Britain will work behind the scenes to ensure that the process does not get bogged down over the plans. Mr Brown has set tough targets for debt relief next year: 10 countries to be ushered through the programme by Easter, and 26 in total by the end of the year. There is also a concern that the IMF and the US treasury, while paying lip service to the idea that countries must develop and stand by their own poverty reduction plans, are simply using the plans to impose their own blueprints for running an economy - more liberalisation and privatisation, and tough monetary and fiscal policies.

"On one hand they are using the language of national ownership and participation, and on the other you've got the US trying to dictate all sorts of conditions," said one development expert.

But it is possible that the whole debt relief campaign may prove a turning point for the IMF's role in developing countries. The fund is already under fire for its handling of the Asian crisis, and the new head of the US treasury, Larry Summers, has indicated that he thinks the IMF ought to sort out its role as the main emergency lender and pull out of lending to poor countries.

Jubilee 2000's campaign will outlast it, said Justin Forsyth, head of policy for Oxfam. "This huge movement of people around the world will survive the end of next year and open up debate on development issues," he said. "There are now many groups in Latin America and Africa which are using debt as a way of challenging the policies of the IMF and their own governments."

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