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Asian Tribune is published by World Institute For Asian Studies|Powered by WIAS Vol. 12 No. 2642

Norway Sets Crucial Precedent for the Cancellation of Illegitimate Debt

Washington, DC, 04 October, (Asiantribune.com):Yesterday’s announcement by the Norwegian government that it will unconditionally cancel $80 million in illegitimate debt owed by five developing countries marks an important shift in the global discussion around debt cancellation. With this decision, Norway has become the first creditor country to examine its lending history, publicly acknowledge the illegitimate nature of outstanding debts and move to cancel these debts outright. This week, Africa Action joined with organizations and activists around the world in commending the Norwegian government for its recognition of its own responsibility and for its action to rectify this injustice.

Ann-Louise Colgan, Acting Co-Executive Director of Africa Action, said today, "Norway’s statement this week, and its willingness to accept responsibility for illegitimate lending, set an important precedent that other international creditors must heed. The international financial institutions, particularly the World Bank and International Monetary Fund (IMF) can no longer turn a blind eye to their own historically unfair and corrupt lending practices."

"They must follow Norway’s lead, and cancel the illegitimate debts being repaid now by impoverished countries in Africa and throughout the global South."

Africa Action has long emphasized the illegitimate and odious nature of African countries’ debts, and continues to call for recognition of this reality and for the outright and unconditional cancellation of these debts.

Marie Clarke Brill, Acting Co-Executive Director of Africa Action, said today, "Activist pressure has succeeded in shifting the terms of the conversation on debt cancellation. While the previous standard had been a refusal by creditor countries to look critically at past loans or to accept responsibility for irresponsible practices, Norway has now parted ways with this convention. The door is open for activists in this country and abroad to continue to shine a spotlight on the unjust history and actions of the international financial institutions, and to build on this victory to achieve full debt cancellation now."

Norway’s decision this week refers to a campaign in effect from 1976 to 1980, in which Norwegian ships were exported to developing countries. Subsequent investigations found that little consideration was given in this process to the benefit or sustainability of the campaign, and, as such, the needs of a faltering domestic shipbuilding industry superseded the development concerns of recipient countries. This week’s cancellation will affect Egypt, Ecuador, Peru, Jamaica and Sierra Leone, who will no longer be held responsible to service these debts. In addition, this round of debt cancellation will not be included under Norway’s rubric of official development aid. In the past, some creditors have used such tactics to imply misleading levels of development assistance.

- Asian Tribune -

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