How cancelling 'made-up' debt could help the UK meet aid targets

Treating debt relief for Sudan as charity will allow aid targets to be met at no cost.

"The UK will not balance its books on the backs of the poorest," David Cameron told the G8 summit in May, reiterating his pledge to spend 0.7 per cent of national income on international aid by 2013. The International Development Secretary Andrew Mitchell has echoed this sentiment, saying it is "absolutely clear that we stand by this commitment". That may be -- but some political sleight of hand could help to meet this target.

Back in the 1970s, the UK government backed loans to Sudan to buy British exports. These commercial loans were given by the little known department UK Export Finance (formerly ECGD) winning business for Britain, and keeping Sudan on side during the Cold War.

However, floods and droughts in the 1980s, along with rising US interest rates, led to the country defaulting on its repayments to the western world. The bill outstanding to the UK was £173 million.

Over 25 years later, the claimed debt has now risen to £678 million, and is increasing by £20 million a year. This huge increase is due to notional interest rates of 10-12 per cent being charged every year on the original debt.

The debt claimed from Sudan is effectively made-up money. Yet it could help the UK meet aid targets in the years ahead.

In June, South Sudan gained its independence. The north of Sudan has agreed to keep all the debt, so long as it is allowed to enter an international debt relief scheme within two years.

If and when Sudan achieves debt relief, the UK will "cancel" the debt. Given no repayments have been received for a quarter-of-a-century, this will cost nothing. The government then intends to treat this cancelled debt as aid, and count £678 million -- or whatever figure has been reached by then -- as a contribution to meeting the target to spend 0.7 per cent of national income on aid.

Counting debt relief as aid is nothing new. In the years following the invasion of Iraq, the UK cancelled 80 per cent of the debt inherited by Iraqi people from Saddam Hussain. The cancellation was counted as aid even though the UK loans had included money for Saddam to buy weapons and parts for a chemical weapons factory.

However, the reduction in Iraq's debt, as well as that of Nigeria, did not count towards meeting aid targets. Under current plans, any debt reduction for Sudan will too.

The UK's approach reinforces a narrative that all debts have to be paid, and it is an act of great charity and benevolence on the part of creditors to cancel them. But questions need to be asked about the origin of loans, and responsibilities of lenders as well as borrowers.

In Sudan's case, the UK government says it does not even know what the original loans to dictator Gaafar Nimeiry were for. The government could learn the lessons of past failed lending by implementing Liberal Democrat policy to audit all debts, something Vince Cable, the minister responsible, has so far not been minded to do.

But in Sudan's case, we know the loans from UK Export Finance were driven by Britain's own commercial interest to win contracts and strategic interest in the Cold War. The repayments then became too high because of drought, flood and global economic crisis. The debt was too big in the 1980s and as with all debts that are too big, needed to be repudiated, cancelled or reduced. Instead the debt was kept on the books and inflated by ridiculous interest rates.

In total, Sudan is said to owe $12 billion to western governments. Mostly due to the same high interest rates charged by the UK. If and when this is formally cancelled, if it is all used to meet aid targets, it could knock 12 per cent off official aid for one year.

Treating debt relief as charity will allow aid targets to be met at no cost. It will also sweep under the carpet a history of bad lending, allowing the same mistakes to be made again.

Tim Jones is policy officer at the Jubilee Debt Campaign

Tim Jones is policy officer at Jubilee Debt Campaign. Jubilee Debt Campaign is part of a global movement demanding freedom from the slavery of unjust debts and a new financial system that puts people first.

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The deafening killer - why noise will be the next great pollution scandal

A growing body of evidence shows that noise can have serious health impacts too. 

Our cities are being poisoned by a toxin that surrounds us day and night. It eats away at our brains, hurts our hearts, clutches at our sleep, and gnaws at the quality of our daily lives.

Hardly a silent killer, it gets short shrift compared to the well-publicised terrors of air pollution and sugars food. It is the dull, thumping, stultifying drum-beat of perpetual noise.

The score that accompanies city life is brutal and constant. It disrupts the everyday: The coffee break ruined by the screech of a line of double decker buses braking at the lights. The lawyer’s conference call broken by drilling as she makes her way to the office. The writer’s struggle to find a quiet corner to pen his latest article.

For city-dwellers, it’s all-consuming and impossible to avoid. Construction, traffic, the whirring of machinery, the neighbour’s stereo. Even at home, the beeps and buzzes made by washing machines, fridges, and phones all serve to distract and unsettle.

But the never-ending noisiness of city life is far more than a problem of aesthetics. A growing body of evidence shows that noise can have serious health impacts too. Recent studies have linked noise pollution to hearing loss, sleep deprivation, hypertension, heart disease, brain development, and even increased risk of dementia.

One research team compared families living on different stories of the same building in Manhattan to isolate the impact of noise on health and education. They found children in lower, noisier floors were worse at reading than their higher-up peers, an effect that was most pronounced for children who had lived in the building for longest.

Those studies have been replicated for the impact of aircraft noise with similar results. Not only does noise cause higher blood pressure and worsens quality of sleep, it also stymies pupils trying to concentrate in class.

As with many forms of pollution, the poorest are typically the hardest hit. The worst-off in any city often live by busy roads in poorly-insulated houses or flats, cheek by jowl with packed-in neighbours.

The US Department of Transport recently mapped road and aircraft noise across the United States. Predictably, the loudest areas overlapped with some of the country’s most deprived. Those included the south side of Atlanta and the lowest-income areas of LA and Seattle.

Yet as noise pollution grows in line with road and air traffic and rising urban density, public policy has turned a blind eye.

Council noise response services, formally a 24-hour defence against neighbourly disputes, have fallen victim to local government cuts. Decisions on airport expansion and road development pay scant regard to their audible impact. Political platforms remain silent on the loudest poison.

This is odd at a time when we have never had more tools at our disposal to deal with the issue. Electric Vehicles are practically noise-less, yet noise rarely features in the arguments for their adoption. Just replacing today’s bus fleet would transform city centres; doing the same for taxis and trucks would amount to a revolution.

Vehicles are just the start. Millions were spent on a programme of “Warm Homes”; what about “Quiet Homes”? How did we value the noise impact in the decision to build a third runway at Heathrow, and how do we compensate people now that it’s going ahead?

Construction is a major driver of decibels. Should builders compensate “noise victims” for over-drilling? Or could regulation push equipment manufacturers to find new ways to dampen the sound of their kit?

Of course, none of this addresses the noise pollution we impose on ourselves. The bars and clubs we choose to visit or the music we stick in our ears. Whether pumping dance tracks in spin classes or indie rock in trendy coffee shops, people’s desire to compensate for bad noise out there by playing louder noise in here is hard to control for.

The Clean Air Act of 1956 heralded a new era of city life, one where smog and grime gave way to clear skies and clearer lungs. That fight still goes on today.

But some day, we will turn our attention to our clogged-up airwaves. The decibels will fall. #Twitter will give way to twitter. And every now and again, as we step from our homes into city life, we may just hear the sweetest sound of all. Silence.

Adam Swersky is a councillor in Harrow and is cabinet member for finance. He writes in a personal capacity.