-------------------------------------------------------- From: "Janet M Eaton" <•••@••.•••> To: a renewed Mai-Not <•••@••.•••> Date: Sat, 07 Oct 2006 16:11:08 -0300 X-Distribution: Moderate Subject: Norway cancels illegitimate debts, setting significant new precendent (Fwd) [50Years] Reply-to: •••@••.••• CC: GLOBALL Priority: normal ------- Forwarded message follows ------- Date sent: Sat, 7 Oct 2006 20:51:01 +0300 From: "Soren Ambrose" <•••@••.•••> To: •••@••.••• Send reply to: •••@••.•••,"Soren Ambrose" <•••@••.•••> Subject: [50Years] Norway cancels illegitimate debts NORWEGIAN GOVERNMENT CANCELS ILLEGITIMATE DEBT, SETTING SIGNIFICANT NEW PRECEDENT On Tuesday, October 2, the Norwegian government took the unprecedented step of canceling debt it claimed of several countries on the grounds that it was incurred illegitimately. The debts were incurred in the late 1970s, when Norway was trying to salvage its own ship-making industry by offering credit to South countries which could then use it to purchase the ships. It is quite unusual for a non-revolutionary government to repudiate the actions and policies of its predecessors (the U.S., for example, is still debating whether to apologize for slavery …). It is even more unusual for a government to take practical steps to rectify the consequences of those actions. (It is, however, not clear if the Norwegian government intends to refund the payments already made on these debts.) What is most important, as the Norwegian Jubilee campaign pointed out in its press release, is that "Norway has now broken the unspoken rule of creditor solidarity. Creditors have until now banded together to insist that poor countries repay their debtsand have refused to admit that they share some responsibility for having extended loans irresponsibly, often for geopolitical strategic purposes." The usual vehicle for creditor countries is the "Paris Club" of wealthy countries that meets in virtually constant session to set policy on bilateral debts. It reviews countries on a case-by-case basis and comes up with collective determinations on how to deal with debt problems. While it often cancels large percentages of the debt, it never cancels 100%, and it certainly never questions the legitimacy of the original loans or the system that has perpetrated the debt crises for 30 years. As the annex to the government's press release states, "The unilateral cancellation of the ship export debt will be implemented outside the cooperative framework of the Paris Club of creditor countries. In this particular case the Government finds that there is good reason for Norway to take an independent stand." Unfortunately, but unsurprisingly, the document goes on to say that this is a one-time occurrence, and that the Norwegian government will continue to participate in and abide by Paris Club decisions on "all future debt forgiveness." The Norwegian government has been careful to avoid the use of terms like "illegitimate" or "odious" or "illegal" to describe the debt it is canceling, which is unfortunate, as it would have made the precedent a stronger and more useful one for debt campaigners. But although it doesn't use the terms, it uses the logic of illegitimacy, and in that regard sets what is still a very valuable precedent, and one that campaigners will be using to pressure other bilateral and multilateral creditors as they go forward. Below are (1) The press release from the Norwegian government; (2) The press release from the Norwegian Jubilee campaign; and (3) The annex to the Norwegian government's press release (described as a factsheet). [Soren Ambrose for 50 Years Is Enough Network] Press release [Norwegian Foreign Ministry] No.: 118/06 Date: 02.10.06 Cancellation of debts resulting from the Norwegian Ship Export Campaign (1976-80) In its forthcoming national budget for 2007 the Norwegian government will propose to the Parliament (Stortinget) to cancel NOK 520 million of official debts from Ecuador, Egypt, Jamaica, Peru and Sierra Leone. The claims originate from the Norwegian Ship Export Campaign (1976- 80). - This campaign represented a development policy failure. As a creditor country Norway has a shared responsibility for the debts that followed. In cancelling these claims Norway takes the responsibility for allowing these five countries to terminate their remaining repayments on these debts, says Minister of International Development, Erik Solheim. The Government proposes that these claims be cancelled unilaterally and unconditionally, without budgetary allocation and without reporting the cancelled amounts as Official Development Assistance (ODA) to the OECD. The debt cancellation will, in other words, be additional to Norway's ordinary ODA. Press release from The Norwegian Campaign for Debt Cancellation (Jubilee Norway/SLUG) Date: 02.10.06 Norway cancels illegitimate debt and takes co-responsibility for failed development policy – A historic victory for the debt movement Norway's Minister of International Development Erik Solheim announcedtoday that Norwayis unilaterally and without conditions cancellingUS$80 million in illegitimatedebts owed by5 countries: Egypt, Ecuador, Peru, Jamaica and Sierra Leone. "Norway now cancelling illegitimate debt and admitting co- responsibility for a failed development initiative is simply historic", says Kjetil G. Abildsnes, Chair of Jubilee Norway. "Solheim shows political courage that won't go unnoticed", he said. Norway will then have settled an ugly chapter in Norwegian aid history – the Ship Export Campaign (1976-80).This unfortunate episode in Norway'said history had the effect of cranking up debts in21 countries. "This is clearly a case of illegitimate debt. Norway broke its own rules by not assessing the development needs of the countries we were exporting our ships to", says Abildsnes. "But Solheim is now cancelling all of this debt. This is a historic victory for us", says Abildsnes."It's the end of an embarrassing story for Norway. We applaud Solheim for this bold step". Burma and Sudan who also have loans to Norway after the Ship Export Campaign will not receive any cancellation until the situation in the two countries change. We expect these countries to also get their debts cancelled when there is a change in their situation. The reason given by Norway for this unprecedented unilateral cancellation is a failed development policy lacking proper needs assessment and a proper risk analysis. "This campaign represented a development policy failure. As a creditor country Norway has a shared responsibility for the debts that followed. In cancelling these claims Norway takes the responsibility for allowing these five countries to terminate their remaining repayments on these debts", said Minister of International Development, Erik Solheim today."Cancelling these debts will have consequences for how we think about responsible lending in the future", he continues. The debt movement has long said that debt incurred by dictators, for failed projects, or where money have disappeared in corruption is illegitimate and not the responsibility of the people. By cancelling these claims Norway is taking another step towards defining the concept of illegitimate debt. "That Norway takes co-responsibility in this way is unique in the world. Norway has now become the first country which by action confirms lender responsibility by cancelling illegitimate debt", says Abildsnes. Norway has now broken the unspoken rule of creditor solidarity. Creditors have until now banded together to insist that poor countries repay their debtsand have refused to admit that they share some responsibility for having extended loans irresponsibly, often for geopolitical strategic purposes. This has been at the expense of poor countries. Norway is setting an example and creates a precedent that other countries surely must follow. Norway is now in a position to demand action from other countries and international institutions on this issue. "By cancelling these debts we want to give rise to an international debate on lender responsibility", says Solheim. "The debt crisis is not over. We will make sure that Norway continues to push for a just international monetary system where debts are legitimate and responsible lending the norm, not the exception", says Abildsnes Kjetil Abildsnes, SLUG (Norwegian Jubilee Campaign) Annex to press Release No 118/06 02.10.06 (Norwegian Foreign Ministry) Cancellation of debts incurred as a result of the Norwegian Ship Export Campaign (1976-80) Norway's claims vis-à-vis developing countries amount to approximately NOK 4,4 billion. Approximately NOK 2.9 billion of the debt owed by developing countries to Norway (including accrued interest on arrears) is related to the Norwegian Ship Export Campaign (1976-80), under which Norway exported 156 vessels and ship's equipment totaling NOK3.7 billion to 21 countries. The campaign was financed through the Norwegian Guarantee Institute for Export Credits' (GIEK) old general guarantee scheme and its old special scheme for developing countries. A great many of these projects proved to be economically unsustainable, so that government guarantees were triggered and the Norwegian Government became creditor. In 1988-89, the Brundtland Government conducted an evaluation of the Ship Export Campaign, in which the campaign was criticized for inadequate needs analyses and risk assessments. The main conclusion was that this kind of campaign should not be repeated. A little more than NOK 1.1 billion of this debt has been cancelled previously, primarily in connection with Norway's follow-up to the debt relief initiative for the poorest countries (Heavily Indebted Poor Countries, HIPC). It is now generally agreed that the Ship Export Campaign was a development policy failure. As creditor, Norway shares part of the responsibility for the resulting debts. By canceling these claims, Norway takes the responsibility for allowing Ecuador, Egypt, Jamaica, Peru and Sierra Leone no longer to be obliged to service the remainder of these debts. ------- End of forwarded message ------- -- -------------------------------------------------------- Escaping the Matrix website http://escapingthematrix.org/ cyberjournal website http://cyberjournal.org subscribe cyberjournal list mailto:•••@••.••• Posting archives http://cyberjournal.org/show_archives/ Blogs: cyberjournal forum http://cyberjournal-rkm.blogspot.com/ Achieving real democracy http://harmonization.blogspot.com/ for readers of ETM http://matrixreaders.blogspot.com/ Community Empowerment http://empowermentinitiatives.blogspot.com/ Blogger made easy http://quaylargo.com/help/ezblogger.html
