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Cancel Tsunami-affected countries' debt now!
African Forum and Network on Debt and Development (AFRODAD)
January 17, 2005

The Tsunami disaster of 26 December, 2004, was one of the world's largest natural disasters of our time, simultaneously unleashing catastrophic damage on several Asian and African countries, the bulk of which are some of the world's poorest. Whole towns, villages, communities and infrastructure were swept away and so far more than 156,000 people have died, with several thousands still missing.

The total number of dead as at January 11, 2005 stood at 156,193:

East Africa - 137 (Including Kenya, Seychelles, Somalia, Tanzania and Madagascar)
Bangladesh - 2
Burma - 59
India - 15,766 (dead or presumed dead)
Indonesia - 104,055
Malaysia - 74
Maldives - 74
Sri Lanka - 30,721
Thailand - 5,305

The aid to Tsunami hit countries has come in different forms, pledges (which may not necessarily be honoured) donations, loans and temporary debt relief. The aid pledged to tsunami countries amounts to about $7bn: $4bn from governments and $3bn from individuals and companies.

Immediately after the Tsunami disaster, the Asian Development Bank (ADB) was quick to announce reconstruction loan aid to the tune of US$350 million and the Paris Club on 12 January 2005 announced a moratorium on the debt payments of the countries worst hit, to free their money for reconstruction. Following up the agreement by the finance ministers of the G8 leading industrial countries last week the debt freeze would be to countries which together owe $272bn (costing about $23bn a year to service) of which about $5bn (£2.64m) flows to Paris Club governments.

Indonesia, Sri Lanka and the Seychelles said they would accept the offer but Thailand, which is not heavily indebted, said it was happy to continue paying its debts to avoid damaging its standing in international capital markets. More than half the $5bn will stay in Indonesia, which has about 105,000 of the victims of the disaster.

The positions of these particular two rich institutions is deplorable as the majority of the populations in the Tsunami-hit countries already live on less than a dollar a day and have a huge debt burden amounting to US$406 billion. This new-found benevolence will only sink those ailing nations further into despair. Getting more loans will only exacerbate their situation and ensure the continued dominance of these institutions on these countries. It is grossly unreasonable of the Paris Club and the Asian Development Bank to further burden these countries with debt. As some of the world's richest institutions, the Paris Club and the ADB can afford to cancel the debt and give more aid in the form of grants. The Paris Club and ADB position goes a long way in proving the negative motivations of donor aid which is largely driven by business and profit motives at the expense of human life.

In solidarity with the people of the Tsunami disaster countries, The African Forum and Network on Debt and Development (AFRODAD) would like to urge the Asian Development Bank and the Paris Club to reconsider their positions as this will amount to a violation of human rights, as the poor are denied access to basic needs like water and sanitation, education and health among others for a long time to come. This will have adverse effects on the achievement of the Millennium Development Goals in Asia and the rest of the poor world.

AFRODAD calls on the support of other civil society organizations in demanding that all aid to these countries should be in the form of grants, be given without conditionalities and that their debts be immediately cancelled unconditionally. Freezing the Tsunami countries' debt is only a temporary and unsustainable solution, we demand that the Paris Club immediately and unconditionally cancel these debts.

AFRODAD applauds the efforts of various African governments in sending relief aid to the Tsunami victims and would urge them to continue to do so. East Africa was particularly affected by the disaster with some deaths and a large number displaced. The African continent should come together and support these countries and not wait for the international community.

We also call upon the United Nations and the international community at large to establish a mechanism to protect countries that are forced to repay their debts under such circumstances.

Afrodad, in pursuit of an equitable and sustainable development process and a prosperous African society, is a civil society organisation born of the desire to see lasting solutions to Africa's mounting debt problem which has impacted negatively on the continent's development process.

Visit the AFRODAD fact sheet

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