Maravi

Jubilee advises public leaders to help maintain accountability

Jubilee advises public leaders to help maintain accountability
By Nomusa Michelo
Sunday April 29, 2007 [04:00]

JUBILEE Zambia has called on government and church leaders in the country to help find the lost sense of financial accountability and patriotism by civil servants. The call follows the ruling in which a UK court has asked the Zambian government to pay Donegal International US$15.5 million for a debt owed. UK Judge Andrew Smith on April 24, 2007 ruled that Zambia should pay Donegal International a settlement of US$15.5 million instead of the US$55 million demanded by Donegal International. This is repayment on a former bilateral debt purchased by the Donegal over a decade ago from Romania.

Jubilee Zambia national coordinator Nachilala Nkombo said the case of the Donegal debt points to critical lessons Zambians must draw on the way public loan matters should be handled in future, if Zambia’s integrity and development is to be preserved.

“We did not need to pay US$15.5 million to learn that we need to have in place stronger control of public debt contraction in order to stem the tide of unscrupulous outflows of financial resources from our public purse,” Nachilala said.

Meanwhile, Jubilee Zambia and its international collaborators Oxfam-UK and Jubilee UK and Jubilee USA have welcomed the announcement by Judge Smith to reduce the payment that Donegal International was demanding from Zambia from US$55 million to US$15.5 million.

However, Jubilee Zambia has noted that although the repayment has been reduced, the US$15.5 million would significantly affect government’s income available for development spending.

“For example, the US$15.5 million is approximately three quarters of the poverty reduction budgetary allocation for recruitment of new teachers in the 2007 budget,” Nachilala said. “Given that Zambia is ranked at 165 out of 175 of the poorest countries by the United Nations Human Development Index, this payment will certainly derail some of the envisaged progress in terms of poverty alleviation and achievement of the Millennium Development Goals (MDGs).”
Nachilala said the implications of this payment would be immediate, as the court has ordered payments to start in the near future.

“The court order on the 24th of April 2007 to pay Donegal International came a day after the Belgian government on the 23rd of April awarded Zambia further debt relief amounting to US$5.5 million in recognition of the Zambia’s deep need to accelerate poverty reduction,” Nachilala said. “The implication of this is that this contribution to debt relief by the Belgian tax payer’s will not reach the intended beneficiaries in the poorest parts of the country, but might go in the pockets of an already wealthy businessman from the US.”

Nachilala said Zambia worked closely with Oxfam UK and Jubilee UK and Jubilee USA to expose the activities of Donegal, which is headed by a US citizen Michael Sheehan.
“Post judgment, campaigners now expect that the issue will be raised at the G8 summit Germany in June this year,” Nachilala said. “Global leaders namely, George Bush, Gordon Brown and Germany, development minister Heidi Maire Wieczorek-Zeul have expressed the deep concern on this issue and its negative impact on poor countries.”

Jubilee-Zambia stated that vulture funds have to be legally blocked because it is through litigation against countries with limited abilities to pay that they target to reap their profits.

“Ultimately the international community led by the G8 now more than even before have a moral duty to institute a fair, comprehensive and binding framework for dealing with poor country debt which will ensure that commercial creditors will never again have the chance to profit in this way,” Jubilee Zambia observed.

Jesuit Centre for Theological Reflection (JCTR) director Father Peter Henriot observed that although the ruling was a legally correct decision, it is a morally wrong decision.
Fr Henriot noted that even World Bank president Paul Wolfowitz has described the case against Zambia as “appalling”.

Jubilee-Zambia network members and its partners are now calling on G8 representatives to take a stand on the case in which poor countries are tricked out of some benefits of debt relief, and bring an end to vulture funds.

Jubilee Zambia network members, are also calling on government to break the silence on Donegal by telling the nation how systems of government permitted the country to find itself in this situation and what correction measures will follow to ensure the Zambians involved in the Donegal debt deal are held accountable.

Jubilee Zambia is also asking what immediate legal and institutional arrangements the government will initiate to ensure greater transparency and accountability in governments’ handling of public debt matters in future.

Donegal International is a vulture fund that specializes in buying debts of countries struggling to repay and later claims the full amount of the debt with huge interests. Donegal International is registered in the British Virgin Islands.

Labels: CIVIL SERVANTS, CORRUPTION, JUBILEE ZAMBIA, VULTURE FUND

posted by MrK @ 5:41 AM