Is it fair that countries still have to pay the debts taken on by dictators, even once the dictator is gone? Surely not, if the borrowed money was wasted, squirreled away into offshore bank accounts or squandered on ego projects or weaponry. But it seems it’s easier to shift the dictators themselves than get rid of their debts.
Hosni Mubarak may have finally been dethroned in Egypt, but his £100 million of outstanding debts remains. Saddam Hussein is long gone, but not the £190 he owes Britain. General Suharto of Indonesia has been out of office for 13 years, but the country still owes us £450 million.
All the above examples are debts owed to Britain – international totals would be much higher – and they’re owed to one government department – the Export Credits Guarantee Department.
The ECGD exists to support British business, providing loans to importers or exporters, underwriting overseas investments, or funding specific projects. Developing countries owe it some £2 billion in all, including Zimbabwe, Sudan, and bizarrely, North Korea.
Nobody knows why our government has lent money to North Korea or how the funds were used, because the ECGD doesn’t make that information public. Developing countries are in the dark too, and are repaying debts without knowing what they were for in the first place. Where the information does reach the public, it’s often rather outrageous – how was Suharto able to get a loan to purchase fighter jets and tanks from the British government while he was perpetrating a genocide in East Timor, for example. Or how about the pipeline construction project in the Caucasus that ECGD insured, which led to serious human rights and environmental issues, and may even have been a factor in the war between Russia and Georgia.
The Jubilee Campaign is calling for a debt audit – who has the ECGD lent to, how was it spent, and what are they going to do about those debts now that the dictators are gone? There’s a ‘dictator debt day of action’ coming up on the 31st of October if you want to get involved and shine a little light on one of the murkier corners of the British government. Check out the details of the day of action here. You can also write to Business Secretary Vince Cable here.
- For more on the ECGD and its history, read the report.
The Earthbound Report 