Ethiopian Catholic Church appeals to the G-8 leaders for debt cancellation and extend assistance to poverty reduction

His Grace Abune Berhaneyesus D. Souraphiel CM, Metropolitan archbishop of Addis Ababa and President of the assembly of the Catholic Bishops of Ethiopia has written letter of appeal to Head of States of the G-8 highly industrialized nations: Germany, Canada, France, the United States, Britain, Russia, Italy and Japan. The same letter was also addressed to the financial ministers of the respective countries and their embassies in Addis Ababa. The full text of the letter is shown below.

Your Excellency,

The Ethiopian Catholic Church is a member of the Universal Catholic Church, present all over the world. We represent Catholic female and male citizens of the African countries and those represented at the G8 Summit. Our members witness daily the increasing sufferings of the people caused by poverty and the monies paid as interest on the multilateral debts of their countries.

Our Institution is a member of AMECEA (Association Members of Episcopal Conferences of Eastern Africa) Catholic Institution comprising 8 countries of Eastern Africa, all of them affected by the external debt crisis.

The option of the International Financial Institutions and of some members of the G8 to take new measures to cancel the African debt in order to combat poverty fills us with hope. Indeed, a durable peace and security for all can only be obtained through concerted action against the terror of poverty and hunger that affects a huge part of our world population.

Over-indebtedness hampers the economic integration of all Sub-Saharan African countries and is a major cause of poverty for their populations. The resources needed for development and basic social services instead go to paying the debt service. Total debt cancellation is needed and has proven to be effective in alleviating poverty. Although not on the official agenda of the 2005 G8 Summit, we believe that debt cancellation should be a main concern.

We expect from the Summit's declaration bold steps towards debt cancellation as a means of poverty reduction in our world.

We support and recommend:

·          Definitive cancellation (100%), not just the reduction or rescheduling of debt service, of all UNPAYABLE debts, by fair and transparent means for all Sub-Saharan African countries. For most of these countries: this means all debts.

·          Multilateral debt cancellation must apply to all impoverished nations, not just the 42 HIPC. Non­-HIPC countries (Kenya, Nigeria) must be included in efforts towards 100% debt cancellation.

·          This cancellation should be delivered without harmful conditions imposed by creditors in the form of adjustment programs, such as privatisation, trade liberalization, opening of markets, fiscal and monetary targets, etc.

·          The only conditionality should be an internal monitoring mechanism, with the participation of civil Society; to make sure that the earnings from the debt cancellation goes to poverty reduction.

We expect:

·          The creation of a fair and transparent arbitration process (FTAP) framework with the participation of both creditor and debtor countries. This framework will prevent developing countries from falling again into a situation of over-indebtedness after debt cancellation, and will bring about the resolution of the debt crisis without compromising the ability of poor countries to meet the basic human needs of their peoples.

·          That the HIPC program be adjusted in order to allow the RIPC countries to deduct from their export earnings the funds needed for their poverty reduction strategies, before calculating the level of sustainable debt service.

·          Those resources to achieve the debt cancellation could come from the creditor countries and from the multilateral financial institutions. The IMF and WB could contribute the bulk of the resources to finance debt cancellation. The IMF could sell part of its gold reserves ($30 billion) and use the proceeds to cover debt owed to the World Bank and other multilateral parties. The IBRD could easily mobilize more than $1 billion of its profits and reserves toward debt cancellation.

We remind:,

·          Industrialized countries, of their promises, reiterated at the Monterrey Conference, to spend 0.7% of their GDP on Official Development Aid (ODA) and ask the G8 countries to commit themselves to a calendar as to make their promise come true within foreseeable time.

 May wisdom and compassion guide you in all your decisions?