Scotland’s future: contributing to a fairer world

17 December 2013

Jubilee Scotland’s campaign director, Alys Mumford, examines the international development commitments in the independence white paper.

The Scottish Government’s white paper highlights 4 key areas of priority in international development. One of these is debt relief – reflecting the asks of diverse coalition of organisations across Scotland who make up Jubilee Scotland. This also reflects a clear divergence from UK government’s priorities, where Secretary of State for Business, Innovation and Skills Vince Cable stated earlier this year that (against Liberal Democrat policy) there would be no audit of debts owed to the UK.

The Scottish Government currently has a pretty good track record on international development. Bypassing the fact the it is technically a reserved issue, they have created a £9m international development fund and a climate justice fund (recently increased to £6m) and their innovative method for distributing it, by focussing on key target areas and themes, is seen by many as more effective than the UK mode

In the hefty 670 page white paper, there is not much space given over to international development (although forgive me if I’ve missed a section – the huge demand this morning proved a bit too much for the website and I have only been able to download it in chunks!), but this is reflective of the fact that there is little significant change here from what Scotland already does in this field. The four key priority areas highlighted bear out the Scottish Government’s stated desire to be a ‘world leader’ in international development.

Firstly the commitment to “more and better aid” and a promise to enshrine the 0.7% commitment agreed to in a UN resolution in 1970, but only pledged by the UK government this year, in legislation. It also speaks of an aspiration to increase this to 1%, bringing it in line with Norway, a model country for many of the Scottish Government’s policies.

For those who remember the three central aims of the Make Poverty History Campaign in 2005, it is a familiar sight see debt highlighted alongside aid. And the second priority area of debt marks the only one which would change significantly with Scottish Independence, with Scotland inheriting a share of the debts currently owed to UK Export Finance. In the white paper, the Scottish government pledges to:

“give careful consideration to the question of unjust” debts; will work to ensure that Scottish export policies do not create new unjust debts; and support moves to establish Scotland as an international centre for debt arbitration”

While this is not the total commitment to conduct a debt audit that Jubilee Scotland campaign for, the use of the phrase “unjust debt” is in itself something the Government should be applauded for – recognising the concept of illegitimacy in global debt opens the doors for its cancellation. By committing to ensuring that Scottish exports do no create new unjust debts they are again recognising the unequal global systems which create debt (and slyly having a dig at the UK Government’s Export Finance department which is under fire from debt campaigners at the same time!). Finally the commitment to support the establishing of Scotland as a seat for international debt cancellation; an innovative policy which would firmly establish a niche for Scotland in the world and a clear example of Scotland using its expertise for good.

Gender is highlighted as the third priority area, with no specific policy asks but instead a commitment to “put gender equality at the heart of our development work”. A laudable aim, but with no specific methods for doing so included in the document, not really giving us much to go on, so forgive me if I don’t dwell on this.

Finally, the principal of ‘Do No Harm’ – striving for policy coherence and ensuring that other departments within the Scottish Government do not undermine international development aims. The idea of policy coherence is highlighted in the Network of International Development Organisations Scotland (NIDOS)’s excellent report ‘Scotland’s Place in the World’, which must take the credit for this ask appearing in the white paper. At a launch event for the NIDOS project last year, International Development Minister Humza Yousaf spent much of the day deep in conversation with the opening speaker, a Swedish expert in policy coherence, and the Swedish example is a great one to follow in this area.

Unfortunately, this final aim is not always upheld even within the white paper itself. In the international development section, we have clearly seen a commitment to non-damaging exports. In the sections not meant for the eyes of international development hacks though, any mention of exports is only accompanied with promises to boost them. Ensuring exports do not create unjust debt means transparency, restrictions on damaging projects and more regulation. If policy coherence is to become a reality, this needs to be mentioned when discussing how Scotland can have a flourishing export market. Similarly, the phase ‘Do No Harm’ is only mentioned twice in the document, in the one paragraph about the principle itself. (again, with the caveat above about difficulty accessing all the document!).

Overall, the international development aims in the white paper are to be welcomed. There are clear commitments to make Scotland’s contribution to the world ambitious and effective, regardless of size or budget, and a commitment to policy coherence which continues the current successes of the climate justice and international development funds. Debt justice could be an area where Scotland is able to show itself globally to be a nation which does development differently, and operates in solidarity with vulnerable nations around the world. It’s inclusion as one of the 4 priorities should be welcomed as a demonstration of the Scottish Government’s willingness to confront global injustices. What is also clear though is that if Scotland votes for independence, development agencies will have our work cut out to ensure that the laudable aims of the government’s international development wing are truly reflected across policy.

This bog first appeared on OpenDemocracy

Debt around the world – winter 2013

9 December 2013

Below are some developments from the world of global debt over the past few months.

1. The Scottish Government launched its White Paper ‘Scotland’s Future’ on the 26th November. In this, debt relief is highlighted as a priority for international development, with the statement:

“The Scottish Government will give careful consideration to the question of ‘unjust’ debts; will work to ensure that Scottish export politics do not create new unjust debts; and support moves to establish Scotland as an international centre for debt arbitration.”

While remaining neutral on the issue of Scottish independence, Jubilee Scotland is welcoming the Government’s recognition of sovereign debt as a key issue for Scotland’s international development policy. This is a great campaign success. It is recognised however that in either scenario following the referendum Jubilee Scotland’s work must continue to ensure unjust debts are given full consideration through an audit of Scottish and UK debts and a commitment made to cancel all those deemed to be unjust.

Jubilee Scotland’s paper outlining their asks for debt justice in both a yes and no vote, and responses by the Yes Scotland and Better Together campaigns can be found here.

The Scottish Government’s commitment appears in chapter 6 of the white paper.

2. Egypt has been revealed to be the most indebted country in the Middle East and Africa, seventh in the World. (Argentina remains in first place globally as the country least likely to be able to pay its debts.) Egypt’s debts now make up 79.8 percent of its GDP, totalling $234.4 billion which is the equivalent of $2600 for every Egyptian citizen. The likelihood of Egypt being unable to pay its debts has now risen to 37.9 percent. Egypt is a key case for Scotland and the UK with many debts owed by the country being to UK Export Finance for loans made during the Mubarak regime and for arms. Meanwhile, Kuwait plans to buy $2 billion of Egyptian bonds as part of a second aid package having already pledged $15 billion in aid alongside Saudi Arabia and the United Arab Emirates earlier this year.

Read more on Egypt’s debts here.

3. Greneda is making plans to lower its income tax threshold on the recommendations of the International Monetary Fund (IMF) and as part of its debt restructuring programme. Grenada is currently seeking to hold a conference with all of its creditors to come to a mutual agreement about how to meet its debt obligations.

4. The IMF Fiscal Monitor Report estimates that Pakistan requires $76.9 billion, the equivalent of 30 percent of its yearly GDP to pay off its existing debts. This places it at the top of the of the list of indebted emerging countries and suggests it is going to find itself borrowing more in order to meet its repayments.

5. Several developing countries, including Jamaica, El Salvador and Pakistan, are failing to meet international development goals after rich countries reneged on a pledge to deal with their debts. Moreover, unjust debts in countries such as Greece, Portugal and Latvia are now increasing poverty at an alarming rate. These findings are part of Jubilee Debt Campaign’s ‘Life and debt: Global studies of debt and resistance‘, published in October 2013. The report compares debt crises in nine countries: Egypt, El Salvador, Greece, Jamaica, Latvia, Pakistan, the Philippines, Portugal and Tunisia.

Key findings include:

  • Jamaica pays more on its foreign debt repayments than Greece at a staggering 33 percent of its revenue.
  • Greece is spending 29 percent on its revenue on debt repayments.
  • El Salvador continues to spend 25% of government revenue on foreign debt payments, the debt originating from lending by the western world to the vicious military junta in the 1980s, whilst hunger and extreme poverty are increasing.
  • Pakistan is unlikely to be able to meet many of the Millennium Development Goals because of its debts, including those aiming to halve the proportion of people going hungry, eliminating gender disparity at all levels of education, and reducing by two-thirds the child mortality rate.

The report also gives inspiring examples of the campaigns in countries for debt justice, for example calls in Tunisia for a debt audit.

6. At the Commonwealth Heads of Government Meeting in Colombo, Sri Lanka, 15-17th November 2013, on the issue of debt it was minuted that:

‘Heads welcomed the report of the Commonwealth High Level Mission on the debt and financing challenges of Small States. Heads emphasised the need to continue advancing global awareness of unsustainable Small States’ debt and the accompanying financial challenges they confront, building on the Mission’s recent work. They endorsed the recommendations of the Mission’s Report, underlining the importance of continued collaboration within the international community to address these debt and financing challenges and to build small states’ resilience as well as continued engagement on innovative solutions such as the Mission’s proposals for debt reduction and the inclusion of a vulnerability criterion in debt alleviation interventions and allocation procedures of international financial institutions. Heads reaffirmed their support for the Commonwealth Secretariat’s current debt management and recording work.’

It is reassuring to see sovereign debt maintaining a place on the agenda of the Commonwealth Heads of Government. The report to which they refer includes recommendations on the need for integration of resilience building of small states, provision of grace periods for debt repayment during times of natural disasters or other external shocks and provision of countercyclical loans. Whilst these are valuable contributions to the pursuit of debt justice, Jubilee Scotland believes these efforts must go further if they are to tackle the unjust economic systems which support existing lending and borrowing principles. Equally, more attention must be paid to the concept of ‘unjust debt’ and its necessary cancellation.

7. The IMF wants Sri Lanka to boost its tax reveunes to cut both its budget deficit and public debts, a further demonstration of the IMF seeking to impose its economic policies on developing countries. Read the full story here.

8. Qatar has agreed to provide $150 million in debt relief to Palestine. This was announced by US Secretary of State John Kerry during Israeli-Palestinian peace talks in October although no further details were provided.

9. A new Eurodad report, ‘The new debt vulnerabilities. 10 reasons why the debt crisis is not over’ was published in November 2013. It finds that debt vulnerabilities have changed, but overall have not been substantially reduced. The number of bank failures has dropped since the height of the financial crisis which is good news. However, the downside is that governments have paid a high price to stabilise the financial sector, and sovereign debt levels have surged. It states that:

Debt has not been canceled or paid off, it has simply been shifted from one balance sheet to another, and primarily from the private purse to public or government coffers.
The opportunity to use the financial crisis for fundamental reforms in nation and international debt management and debt crises prevention and resolution has largely been wasted.

To read a summary of the report and its recommendations as well as download a copy you can visit the Eurodad website.

10. A Bank of England report has criticised existing methods of dealing with sovereign debt crisis. Referring to bailouts in Greece, Ireland, Portugal and Cyprus, the authors say using public money to bail out nations leaves taxpayers shouldering an “inequitable” burden. They suggest that private creditors, those who lent indebted nations the cash in the first place, should instead foot the bill for any rescue.

Whilst acknowledging that current trends in ad hoc bailouts in response to debt crises are poor, the report pays no attention to considering alternative longer-term solutions to debt workout upon which Jubilee Scotland campaigns. It maintains a commitment to bailouts and simply shifts emphasis from public to private rescue plans.

Note: in a disclaimer the report states that the views are not necessarily the official view of the Bank of England, rather the authors of the paper.

11. US American Brooking Institution recently published a new paper on sovereign debt restructuring entitled ‘Revisiting Sovereign Bankruptcy’. It highlights creditors’ role in irresponsible lending, a positive statement in shifting focus away from placing blame on debtor countries for their debt burden. It also promotes the contribution of stakeholders, including NGOs and civicil soviety, in discussions of debt restructuring. Jubilee Scotland welcomes these commitments. On the downside, however, there are only very weak proposals for a reformed scheme. Whilst understanding the need a statutory insolvency framework for sovereign states – a system through which debts can be restructured – rather than presenting alternative ways in which this can be done they point largely only to a wide range of challenges which are presented.

Read a full account written by Jürgen Kaiser of Erlassjahr, a Eurodad member and a partner organisation of Jubilee Scotland.

Debt around the world – Autumn 2013

16 October 2013

Find out the latest developments from countries around the world fighting against unjust and unpayable debt:

  1. Brazil has in what is being referred to as a ‘gesture of solidarity’ projected the cancellation of $900 million in debt owed by twelve African countries including the Republic of Congo (owing $350 million), Tanzania ($237 million), and Zambia ($113 million). Others however are criticising this as being only an attempt to expand Brazil’s economic power internationally whilst questioning the suitability of some countries, namely Republic of Congo, Gabon, and Sudan which are facing legal action for cases of corruption.

Meanwhile, the IMF has highlighted the importance of fiscal discipline and more responsible spending in Brazil if it is to cut its own public debt.

  1. Zimbabwe is hopeful that it will meet its IMF targets set as part of its supervised economic reform programme by the end of the year when performances are reviewed. Finance Minister Patrick Chinamasa claims the country has already met and exceeded some targets but is behind on others, although is confident that if some targets are not met it will not lead to a further IMF review. The government has also told the IMF it will submit a bill before parliament by the end of the month to take over the debt owed by the Reserve Bank of Zimbabwe (RBZ) and submit to cabinet amendments to the Precious Stones Trade Act to incorporate the principles stating that revenues from Marange diamonds flow into the Treasury (a June 2013 IMF deadline for this having already been missed).

The African Development Bank (AfDB) says the International Monetary Fund’s (IMF) supervised economic reform is indicative of the significant improvement in Zimbabwe’s cooperation on economic policies and its commitment to address its arrear problems.

  1. Pakistan has paid off $393 million as part repayment of its bailout loan facility with the IMF, yet another loan in 29 years of bailouts. In accepting its new loan package of $6.6 billion it has already started facing the conditions attached to this. Petrol and other fuel prices have risen and the IMF is demanding all energy subsidies are removed alongside further increases to sales taxes. Such changes are expected to hit ordinary people the hardest and encourage inflation throughout the economy. There are also fears of another wave of privatisation including the national railway. The importance of the bailouts is in helping Pakistan meet the repayments demanded of it by its creditors and yet, in lending more money, the situation in Pakistan itself is not improved and the burden of debt persists. Concerns are mounting about the Government’s ability to ever retire the loans.$393-million-IMF-debt

You can read more about Pakistan’s debt in Islamic Relief and Jubilee Debt Campaign’s July 2013 briefing ‘Unlocking the chains of debt’

  1. The IMF has published new research drawing on the experiences of Iceland and Ireland to suggest high debt levels are more dangerous for big governments than previously felt. The report warns against concentrating budget costs early on but also suggests that ‘excessive delay’ in implementing austerity measures may be costly.

  1. The Seychelles has topped the list of the most indebted countries at 150% of GDP. It is followed on the list by four casualties of the Eurozone crisis: Portugal, Ireland, Greece and Spain. The UK is 98th on the list. Meanwhile, Singapore, Switzerland and Saudi Arabia emerge as the largest net creditors to the rest of the world.

Also listed are the countries where repaying government debts swallows up the largest proportion of revenues. Lebanon tops this list, with more than 55% of the money that comes into the treasury going straight back out to creditors. Jamaica, Greece and Ireland all spend more than 25% of revenues on servicing their national debt.

  1. A new UN report has stated that the Millennium Development Goals have had successes in reducing poverty and seen the lives of millions across the world improve. It however claims that more must be done to increase aid and push for a multilateral trade agreement. On debt relief in particular it states that by April 2013 35 of 39 of the world’s poorest nations had reached the benchmark for getting debt relief but that many Caribbean nations are reaching a budgetary crisis with there being no debt-relief mechanisms in place for them. There are therefore concerns for the economic health of these countries and the possibility of future debt crises.

  1. Grenada is set to sign an agreement with the IMF on measures aimed at dealing with their high debt levels (likely to be signed in October when more details on the exact terms and conditions of the agreement will come forward).

  1. Nigeria’s Special Adviser to the UN Secretary General on Post-2015 Development Planning, Ms. Amina Mohammed, has said the total accrual of $1 billion annually from the debt relief savings granted to the federal government by the Paris Club from 2006 will not be enough to meet the attainment of the Millennium Development Goals and that greater attention must be paid to poverty reduction measures.

  1. Zambia has a current debt to GDP ratio of 27% of the country’s $20 billion GDP. These current levels are believed to be sustainable and yet there are concerns particularly over a rising trend of taking on commercial loans, which stipulate fewer conditions than their concessional alternatives, but have higher interest rates. Equally, critics believe there is a lack of parliamentary oversight and wasted potential in the tax system leaving Zambia vulnerable to future debt crisis if it continues on a trend of increased borrowing.

Debt Developements – what’s happening in the world of debt?

21 August 2013



1) Zimbabwe has made initial steps towards entering the Highly Indebted Poor Country (HIPC) initiative by agreeing a Staff Monitored Programme with the International Monetary Fund (IMF). This does not involve any new loans but imposes IMF conditions on Zimbabwe’s government including a hiring freeze for civil servants, increased transparency regarding revenues from diamond sales, and a reduction in the primary fiscal deficit from 0.5% of GDP (2012) to 0.2% GDO in 20131.

 The Zimbabwe Coalition on Debt and Development (ZCDD) has requested the new government conducts a debt audit and is calling on the UK government, IMF and other lenders to take part and make transparent all information on loans given to the African country in the past2. (Currently the Zimbabwean government owes approximately £5.9bn to foreign countries, international institutions and foreign private creditors. It is defaulting on its repayments and so now required to pay back just £9.8m a year.) Jubilee Scotland has signed the call by ZCDD giving the proposal its support.

 Standing in the way of progress is Robert Mugabe extending his 33 year rule for five more years following presidential elections at the start of August and his party, Zanu-PF, findings its position in government strengthened. It now occupies roughly three-quarters of seats and is able to rule alone. Many therefore remain fearful over the future of Zimbabwe’s economy particularly given the party’s now unfettered access to state resources and the likely increase in corruption this will support3.

 2) Senegal and Ghana have been judged by the IMF to be at low and moderate risk, respectively, of not being able to meet debt repayments. Assuming economic growth of approximately 5-8%, both countries are expected to see debt repayments reaching 15% of government revenue by 2020 despite them both having completed the HIPC process. This demonstrates the inadequacies of earlier debt cancellation processes, these countries still suffering under a burden of debt, the HIPC process whilst undoubtedly beneficial in many respects also having done little to prevent the build up of new bad debt.

 3) Somalia has been told by the IMF that it may be able to get debt relief within one to three years, presumably under HIPC which typically takes about two years to complete. Somalia’s central bank estimates the government’s external debt stands at $3.2bn4. What is not being discussed however is in what sense the new government in Somalia owes anything given the country had not had a government since the 1990s and money lent prior to this would have been written off by external creditors. We are yet to see how this will be negotiated.

 4) Greece has seen an increase in the national debt to a record high of 160.5% of GDP (a 24.1 percentage points increase since last year). This is the highest increase in Europe followed by Ireland (+18.3), Spain (+15.2), Portugal (+14.9) and Cyprus (+12.6). At the opposite end the biggest reductions in the national debt to GDP ratio were in Estonia (-5.1), Lithuania (-1.9) and Denmark (-0.2). Austerity measures in Greece have also increased, latest developments including the liberalising of trade laws and mandating of work on Sundays and holidays. Conditions for receiving 7bn Euros of support from international lenders have demanded laying off 12,500 civil servants (including police officers and teachers) by the end of the year. There has subsequently been more demonstrations and unrest this month across the country with seventeen separate trace unions coming together to lead the protests5.

5) Pakistan is due to be lent $5.3bn by the IMF to meet its existing debt repayments (estimated this year to be $6.2bn). Agreement has been reached with the IMF expected to sign off on this in September, although Pakistan’s government is hoping for another $2bn of loans to be added to this. The benefit is that previously Pakistan had been drawing on its currency reserves to meet payments – which halved in just one year between 2011/2 and 2012/3 – whereas now these reserves are more secure. However, we still see more debt accumulating and questions are raised over the extent to which tackling debt crises through more lending really offers a long-term and sustainable solution.

 6) Jamaican Environment Minister Robert Pickersgill has claimed that climate change is one of if not the most important threat the country faces in being able to repay its national debt6. As we saw in May 2013, Jamaica has recently signed a $1bn bailout loan agreement with the IMF to meet its debt repayments with a range of austerity conditions attached to it showing just how critical these issues facing the country are. This is also an important acknowledgement from a key government figure in a debtor country of the link between climate change and debt. There is much greater potential for successfully tackling sovereign debt crisis by viewing it within these wider contexts and it for this reason that Jubilee Scotland continues to support its member organisations and a range of other campaigns who are working to affect these issues.

7) Tunisia saw a bill to audit the country’s public debt submitted to the Tunisian Assembly almost exactly a year ago (July 2012) and yet in February of this year it was withdrawn. It has since languished with a variety of other projects, no political party willing to take it forward or take a position. A year on from the initial bill, new calls are being made by campaigners on the ground to make sure this is not forgotten and to have what would be an historic move, the first African parliament to legislate for a debt audit, brought into legislation7.


 8) The G20 Finance Ministers met in July with sovereign debt one of the items on the agenda. Unfortunately, instead of facing this challenge and thinking of new ways of dealing with debt crises, for example a fair and transparent debt workout mechanism as supported by EURODAD and Jubilee Scotland, they chose to focus on ‘strengthening the existing practices of public debt management’. These practices have been shown not to work and new solutions, not strengthening of failing practices, is arguably what are now needed. They also gave little attention to preventing future debt crises, even omitting to make reference to the UN Conference on Trade and Development (UNCTAD) Principles of responsible sovereign lending and borrowing. Instead of meeting the UN’s calls to provide further debt relief and new grant-financing to poor countries, they have also restated their support for activities of the IMF and World Bank– two rich-country dominated institutions often mistrusted by developing countries8. This is disappointing progress but shows why it is still important to continue putting pressure on G20 governments to consider and implement the alternative solutions being forwarded by academics, civil society groups, and campaigners.

9) Supachai Panitchpakdi, secretary-general of the United Nations Conference on Trade and Development (UNCTAD), has argued that to prevent any future global economic crisis a total overhaul of current financial institutions is needed, tantamount to a new Bretton Woods with a new structure of multilateral rules for international monetary and financial regulations. He has referred to the existing system of trade rules within the World Trade Organisation as an example on which this could be based. Crucially, he has recognised and is prioritising the need for developing countries in any new system to have a far greater voice than they currently and have historically enjoyed9.


 10) The UK is considering giving aid in the form of loans either through creating a new loan giving institution or a lending window within the Department for International Development (DfID). An announcement is currently expected in September. The UK government already gives much of its aid through loans via multilateral institutions. Jubilee Debt Campaign calculated that in 2010, $1.26 billion of UK aid money was given to multilateral institutions to then be used as loans. This was the second highest amount of any OECD country, after Japan ($2.23 billion)10. This is not a policy Jubilee Scotland supports with there being already an excessive amount of lending to developing countries and no provisions in place for resolving any debt crisis relating to these loans when they arise. Jubilee Debt Campaign has produced a more detailed paper arguing against turning aid into loans which can be downloaded here.

 11) UK Export Finance’s (UKEF) 2012-13 Annual Report revealed that it backed £4.3 billion of loans in the year, the largest amount for at least a decade. This includes a £2 billion loan to the absolute monarchy in Oman to buy Typhoon fighter aircraft. In total, UK Export Finance guaranteed loans for 138 projects11. Of these, only four had any assessment of the social, environmental, and human rights impacts.

 Projects which had no assessment included:

  • £4.2 million to Indonesia’s military for ‘intelligence equipment’

  • £1.1 million to Pakistan’s military for ‘hovercraft’. Pakistan is already heavily indebted, and due to spend over 20 per cent of government revenues on foreign debt payments this year.

  • £4.6 million to a mine in Sierra Leone, run by a London registered company

  • £15 million to a private equity fund in the Cayman Islands to buy aircraft

  • A £280,000 loan to The Gambian government for transport consultancy, without any consultation with the Department for International Development (DfID). As a low income country, such loans are meant to be referred to DfID, and Gambia’s high debt status means the IMF and World Bank say it should not be borrowing any ‘non-concessional’ loans, such as from UK Export Finance.

 These demonstrate the irresponsible lending practices of UKEF and reiterate the need for an ethical export credit guarantees agency. It also shows that despite assurances from UKEF (see below), as an agency it is still not consistently ensuring social, environmental, and human rights impacts are taken into account when making decisions.

UKEF also expects lending to increase further in future years, as banks increasingly want government guaranteed loans and the agency expands the ways in which it supports loans. For example, in the autumn UK Export Finance is due to launch a direct lending scheme, where it will directly lend money to buyers, instead of guaranteeing loans12.


 12) Amnesty International UK has launched a new report this month called A history of neglect: UK Export Finance and human rights’. The key problems identified in the report with UKEF are: 1) taking policy decisions without proper assessment of human rights impacts; 2) not being aligned with other parts of the UK government and their attempts to address the human rights impacts of UK companies abroad; 3) out of kilter with current standards and best practice; 4) ignoring recommendations of parliamentary committees on reforming UKEF; and 5) using deficiencies in standards set by the OECD to slide back on previous commitments. All of these confirm further the importance of End Britain’s Dodgy Deals campaign and Jubilee Scotland’s work with Clean Up Britain’s Exports to bring about reform of UKEF.

 Jubilee Scotland already campaigns for a new form of export credit guarantees which takes human rights issues into consideration when making any deal but with its specific human rights focus the Amnesty report provides further details on how to do this. Recommendations, for example include: imposing an explicit ban on supporting any projects involving or likely to involve child or forced labour; creating an explicit grievance mechanism for those adversely affected by any aspect of an export credit arrangement to lodge a complaint and obtain remedy; and adopting a ‘disclose or explain policy’ with a presumption of transparency unless there are compelling reasons for non-disclosure. The full report can be downloaded here.

 UKEF have responded stating they ‘comply with international agreements that are relevant to Export Credit Agencies (ECAs) and this includes the OECD Recommendation on Common Approaches for Officially Supported Export Credits and Environmental and Social Due Diligence. This agreement sets out how ECAs should identify, consider and address the potential environmental, social and human rights (ESHR) impacts of the projects they are asked to support. The Common Approaches stipulate that projects should be benchmarked against international standards including the International Finance Corporation (IFC) Performance Standards (2012) which incorporate the provisions of International Bill of Human Rights relevant to private sector actors.’13

However, as seen above in the information taken from the 2012-13 Annual Report it is clear that very few of UKEF’s deals were actually subject to these types of impact assessment.


Produced by Charlotte Snelling, Jubilee Scotland Policy and Research assistant,


1 MF. (2013). Zimbabwe: Staff Monitored Program. 10/06/13.

10 Jones, T. (2012). The state of debt: Putting an end to 30 years of crisis. Jubilee Debt Campaign. May 2012; Jones, T (2013). Debt Policy Update – July 2013. Jubilee Debt Campaign. July 2013.

11 UK Export Finance. (2013). Export Credits Guarantee Department Annual Report and Accounts 2012-13. June 2013. ; Jones, T (2013). Debt Policy Update – July 2013. Jubilee Debt Campaign. July 2013.

12 Jones, T (2013). Debt Policy Update – July 2013. Jubilee Debt Campaign. July 2013.

Illegitimate Greek Debt

13 June 2013

By Alice Picard, Jubilee Scotland Volunteer (All posts are the views of the author, not Jubilee Scotland as an organisation).

I don’t know what you were up to this Tuesday 11 June 2013 but I was demonstrating in front of the Edinburgh International Conference Centre. Well, almost. Because despite long negotiations with the police, we never made it through to the entrance of the building where the TEDGlobal Conference was taking place. No, we were not trying to get there without paying the £6000 admittance fee. We were rather chanting our opposition to George Papandreou giving a speech in the first session of the conference.

Image “Papandreou, who’s that?”, you ask. Well, you know, the former Prime Minister of Greece, elected in 2009 who served a two-year premiership during which time he was supposed to put an end to austerity measures. “Oh, so that’s why he was invited. To tell attendees how he managed that.”, you naively assume. Well, not exactly. By the way, I thought you were aware of the dreadful current situation in Greece! Mr. Papandreou “drew lessons from the Greek crisis”. I assume the many Greeks who took part to the protest were perfectly able to do that. “We know the lessons from the crisis firsthand. We don’t need lectures from the bosses”, their banner read [1].

ImageLet us imagine anyway how George Papandreou’s speech sounded like.

“Ladies and Gentlemen, thank you for being here today. I understand you are expecting me to draw lessons from the Greek crisis. When I came into office in 2009, I inherited a fair amount of debt, to say the least. After meetings with my European colleagues and elected – but mostly non-elected – officials, I got convinced that the best way to tackle the Greek debt and deficit was to get the country into deep recession. The best way to achieve such a result was of course to implement austerity measures, designed in agreement with the Troika, that is the European Central Bank (ECB), the International Fund (IMF) and the people of Greece. I’m kidding, I meant the European Commission (EC).

Of course it did not matter whether or not the same people who had voted me in agreed with these measures. They were quite opposed to it by the way. As soon as we started reducing the minimum wage and pensions, cutting public spending, privatising and making civil servants redundant, they responded by organising massive protests and general strikes. I had a ready-to-use solution though. It was not the first time such policies were imposed against the will of the people. I could count on the IMF’s decades-old experience with Third World countries and on my own country’s history for that matter [2]. Now, if you find yourself faced with opposition, do not slow down the process and keep going. Ideally you would even buy state of the art military equipment and show no mercy for the protesters. Do not forget to criminalise workers’ ability to defend their rights. Naomi Klein calls this efficient combination the “shock doctrine”. In the end, your opponents should grow tired and look powerlessly at the social fabric of the country being ripped apart [3].

How can you assess my success? Not only Greece fell into a deep recession, it is now also facing a humanitarian crisis. Thanks to widespread poverty, people can no longer afford medication, to heat their home, to go to the hospital or to send their children to school. 21% of people now live in poverty and 62% of young people are unemployed. But it is the price they pay for the collapse of the international financial system, bank bail-outs, speculation, the euro and the failure of the successive Greek governments to implement a fair and effective tax system. As you know, “we’re all in this together”. In addition, we cannot be expected to cut on military expenditures, this money goes into the pockets of French and German military industries. So, in addition to reduction in wages for those lucky enough to have a job, we decided to sell out water, energy and railways and to increases taxes, for everyone. Isn’t it a brilliant idea? We ask the average population to pay more with less money. Hence the rise in the number of people committing suicide and the rise of the far right .

Image I am happy to announce that Golden Dawn had Members of Parliament elected in the last elections. With massive support for the party within the police, racially motivated violence can go on with impunity. You can also add to my record that life expectancy is due to fall and the Greek debt to go up this year. Let’s be honest, the point of all that was not really to reduce it anyway. [4]

Fair enough Mr. Papandreou. Now, I know most countries in Europe are tempted to follow suit. However, in a democracy, you should take people’s opinion into account before you go ahead with measures which seriously undermine human rights. If the only way you found to pay back the debt is to cut on healthcare and education and to increase poverty, then it certainly means it is unpayable. As such, it should not be repaid. All the more that if a debt audit is to publicly uncover where the debt came from, who benefited from it and whether and how it should be repaid. Should the Greek people pay for the 108 billion euro required to bail out the banks for instance? Finally, if force has to be employed to push the austerity measures through, this is another indication that the debt is illegitimate. Illegitimate debt actually builds on the concept of odious debt, presented for the first time in 1927 by an economist called Alexander Sack. Odious debt is also based on three prerequisites. First the loan has to be received by a government without the approval and knowledge of the people. Secondly the loan is not spent on activities beneficial to the people and finally the lenders know of this situation. Ironically, this concept has been used several times by the United States to repudiate debt, most recently in Iraq. That the members of the Paris Club asked for the concept not to be officially mentioned was not a reason not to appeal to the concept. Instead Mr. Papandreou, you gave up the sovereignty of Greece and defaulted on the Greek people.

You did not get out of the building Mr. Papandreou in spite of us chanting “Papandreou get out! We know what you’re all about: cuts, job losses, money for the bosses!”.

Image You cannot deny you – and your successors – implemented the cuts and the job losses. As to the “money for the bosses”, two examples will speak for themselves: the national lottery was privatised despite the fact that it was highly profitable and one gold mine in the north of the country was sold for £9.5 million whereas it is believed to have gold and copper worth £8 billion. Other leaders showed more boldness than this though.

Some governments have refused to pay the debt. Countries such as Ecuador, Argentina or more recently Iceland defaulted, audited their debts or insisted their own terms for repayments. In Argentina, it took the President having to flee in helicopter under popular pressure. Not surprisingly, these countries all fare better than Greece, Spain or Portugal. Ecuador even went further and passed a constitution which prohibits the socialisation of private debts. Beforehand, an audit reviewing all debt contracts from 1956 to 2006, had proven the debt was odious, illegitimate and unconstitutional. During the 1980s and 1990s, Ecuador had spent 50% of its budget on debt repayments and 4% on healthcare. Rafael Correa, elected in 2006, decided debt repayments would no longer prevail on life. Thus, Ecuador declared the cessation of payment for 70% of Ecuador’s debt in bonds. But I guess you were not really willing to go against the neo-liberal agenda. People are though. They are prepared to take to the street. They already have in Scotland to call for the bedroom tax to be axed and it is no surprise people here were keen to hold you accountable Mr. Papandreou. It is not worth putting the blame on Brussels and financial markets [5], you also share some responsibility.

[1] Helen Walters, “Protesting Papandreou: Anti-auterity demonstrators at TEDGlobal 2013”, TED  Blog.

[2]  Katerina Kitidi and Aris Hatzistefanou, Debtocracy, 2011

[3] Nick Dearden, “Nick Dearden blogs from debt campaigner delegation to Greece”, Jubilee Debt Campaign.

[4] Nick Dearden, “Nick Dearden blogs from debt campaigner delegation to Greece”, Jubilee Debt Campaign.

[5] Helen Walters, “The failure of leadership in politics: George Papandreou at TEDGlobal 2013”, TED Blog.

Scotland 2013 and Beyond

21 May 2013

A platform to discuss the key guiding principles and values that should shape Scotland’s international development role.

By Alice Picard, Jubilee Scotland Volunteer (All posts are the views of the author, not Jubilee Scotland as an organisation)


“Scotland 2013 and Beyond: Our values and principles for a just world” was organised by NIDOS, Network of International Development Organisations in Scotland, in Edinburgh on May 17th 2013. The sun was shining outside the Radisson Blu Hotel but it was still worth staying inside. Indeed, as most of the speakers put it at the end the event, it was inspiring.

It was good to have speakers from different horizons in the morning. International horizons as the speakers were from Scotland, the UK as a whole but also from Sweden and Zambia. Moreover, we could hear from the academic world as well as from the corporate and third sectors. It is important to reflect on the future of international development together, integrating different values and perspectives in the process. What I would remember from the morning speeches would be the idea of solidarity. Solidarity as one of the main values put forward by Judith Robertson from Oxfam for instance but also as a practical policy of the Swedish Government as presented by Peter Sörbom, EU Policy Officer at CONCORD Sweden.


Values were also the point of focus of the morning workshops. We were supposed to discuss the five guiding values and principles that we would like to see shape Scotland’s policy towards the outside world. My feeling is that even though each participants came to the workshop with personal values that he or she particularly valued, the exchange was enriched by the speeches that were delivered just before. At least, that is what happened in my case. The third three values I wrote on my sheet of paper were Social Justice, Equality and Sustainability. I would have chosen them anyway, with or without the input of the morning speakers because I believe in them. However, thanks to the speakers’ contribution, I went beyond that and started thinking about what other values were also critical to their implementation. The two last values I wrote down were thus Accountability and Coherence. Accountability because choices made at some point should be up for challenge at any time of their implementation. Accountability is essential whenever money is involved, it goes without saying. Coherence because you cannot give from one hand and take from the other. That is sending aid to developing countries whilst at the same time not requiring multinational companies to pay their fair share of taxes to the countries of which they exploit the resources. And that is only one example of the way money can flow away from where it is the most needed.

Again, the most inspiring part was the debate between the participants. The aim was to talk to as many people as possible in order to explain why we had chosen one value over the others. We were allowed to switch values if we found someone convincing. The discussions I had were stimulating and I have to say I was about to change my own values for two new ones: Empowerment and Interdependence. Empowerment because it is crucial to empower individuals and civil society in the Global North as in the Global South and Interdependence because it leads to considering development aid as in our own interest. Each group came out with a certain number of values that were written down and then stuck up in the main room during lunch break so that every one could vote for five values once again.


The choice was difficult to make and I was particularly aware that I was voting as the vast majority of the audience. The last vote I cast was then for free education as no dot appeared yet next to these two words. I could try to explain why but that might be too long, really. Just randomly think about two other values: Empowerment again but also democracy.

Later on, we had the chance to hear from Humza Yusaf, Scottish Minister for External Affairs and International Development. My apologies to the supporters of the status quo but what struck me the most in the Minister’s speech was the introduction. Mr Yusaf pointed out that external affairs and international development were a reserved matter. Its conclusion, not a polemical one, was that it was still worth discussing them, here in Scotland. Mine would be that it is an argument in favour of Scotland’s independence. The values we discussed throughout the day seem to me as an appropriate base to start afresh and adopt a complete new approach to external affairs. An approach that would be coherent – remember? – and would get rid of arms deals. Yes, it would be brilliant if Mr Yusaf had the real powers to put the values he mentioned into practice.

A lot is already being done in Scotland though, as I discovered during the afternoon workshop I had signed up to, on Fair Trade and Procurements. There are actually no little steps in this area. Once tea and coffee are fairly trade, people consequently start asking about other items, such as milk or even clothing. Interestingly, the discussion on fair trade also touches on local supply and transparency of the whole supply chain. Public authorities and bodies have undoubtedly a key role to play to set up guidelines and good practice. It is also through them that citizens could become well-informed customers, accustomed to fair trade products.

To conclude, I would say I was thrilled to witness people thinking together and actually working towards a common goal. Not only for the sake of exchanging experience and networking but also because beside people from organisations active in the field of international development, there were also a few politicians and people who were there on their own behalf. The discussion has to go on so that when it is time to change or improve Scottish policies, ideas will be ready to pick up. 

Guatemala: a study in human rights abuses

10 December 2012

On International Human Rights day, Jubilee Scotland examines the role of debt and international financial institutions on the people of Guatemala, and questions the role Scotland could play in gobal development.

By Charlotte Snelling.

For much of the post-war period, Guatemala’s past has been a story of dictatorships, terror, and genocidal regimes. It is estimated that 200,000 people have died as a result of murder, torture, and extreme poverty whilst the country continues to be affected by a legacy of successive odious governments. It remains one of the most impoverished countries in Latin America and ranks at just 131 on the United Nations Human Development Index, out of a total of 187 countries. In the Americas, only Haiti ranks lower.[1]

A recent report by Jubilee Debt Campaign has been launched to investigate the build up of sovereign debt in Guatemala and the role this has played, and continues to play, in reproducing poverty across the country, particularly in its rural areas. It looks at how debt has been accumulated, the impact on the country’s economy, society, and population, as well as the steps needed to ensure the people of Guatemala are not left paying for the illegitimate actions and unfair treatment endured at the hands of their former leaders.

Guatemala has a long history of debt and exploitation by foreign powers. In the late 1970s and early 1980s, when the wave of terror was at its highest level, foreign lending to the country increased substantially. Successive loans of between $100 million and $300 million every year were granted from 1978 to 1982 and by 1985 Guatemala’s debt had reached $2.2 billion, an increase of over $2 billion in just 10 years. The majority of this debt was owed to multilateral institutions, in particular the World Bank, and today the country is still paying these institutions back over $400 million every year. This undoubtedly has important implications for Guatemala’s ability to rebuild and develop its economy alongside providing essential services to its citizens. Money which could otherwise be spent on moving people out of poverty and developing essential infrastructure is being shipped out of the country and into the pockets of Western lenders.

Guatemalan women commemorate Rio Negro massacre

Guatemala, March 2009. Dozens gather to commemorate the 27th anniversary of the Rio Negro Massacre at Pak’oxom Peak in 1982. Photo: James Rodríguez /

Significantly however, the loans granted to Guatemala were crucial in supporting the decades of terror its population endured, funding ill-conceived, unsustainable projects which impoverished families and led to displacement and destruction of rural communities. The Chixoy Dam is just one example but one which highlights some of the worst effects of the World Bank’s irresponsible lending. [2]In the late 1970s and early 1980s the Chixoy Dam project, $400 million of its budget financed by the World Bank and Inter-American Development Bank, acted only to exacerbate levels of violence and persecution against Guatemala’s indigenous people. In seeking to create a new reservoir as part of the project, the population of the Rio Negro region were threatened with eviction. When the local population resisted this pressure to move, their opposition was then exploited by the government as justification for counter-insurgency and increased violence against the Rio Negro community. It is estimated the project forcibly displaced more than 3,500 Mayan community members and led to 6,000 families suffering loss of land and livelihoods, with more than 400 people were massacred because of their opposition to the project. For the survivors the impact continues to be felt. A Probe International Report from 2001 states: “members of the Rio Negro community live in extreme poverty in comparison to neighbouring communities. However, before dam construction, the community enjoyed, relatively speaking, a high standard of living.”[3] Furthermore, World Bank loans for this project (and a second Chixoy Dam project in 1986) have cost Guatemalan governments $100 million in interest. The Chixoy Dam is a single example within a large back catalogue of odious debts originating from multilateral lending to Guatemala’s past dictatorial regimes. Worryingly the World Bank appears content to continue lending money to the country for new projects which threaten to exploit and impoverish even more communities.

As Barbara Rose Johnston at the Center for Political Ecology states, “the World Bank and Inter-American Development Bank… loans were the primary source of foreign aid to a nation ruled by a military dictatorship engaged in systematic state-sponsored destruction of Mayan peoples”[4]. Debt accrued in the period was loaned to illegitimate and unaccountable governments of which the lenders were well aware whilst only minimal, if any, token investigations into possible impacts of projects were conducted. It is unjust for new governments to be saddled with these debts and responsibility must be shared by the countries and multilateral organisations which funded and supported projects at the expense of the Guatemalan people.

The experience of Guatemala and this new report show that something needs to change. Not only should these illegitimate and destructive debts be cancelled, the accumulation of new odious debt has to be prevented. Lobbying for an audit of the debt in Guatemala and campaigning to force the World Bank to overhaul its current policy and apply ethical principles of justice, fairness, and sustainability to its future lending will be vital in this process.

Importantly though, we should also be looking closer to home. In the UK, UK Export Finance (previously the Export Credit Guarantee Department), a semi-autonomous government body existing to support UK exporters to enter in to international markets considered risky and where the likelihood of failure is high, has been responsible for numerous dodgy deals similar to that seen in Guatemala. Deals where UKEF is involved are typically made in the arms trade, aerospace or fossil fuel related industry (over 75 percent of UKEF’s observable transactions) and are often based in countries with unstable governments, despotic regimes, and areas of conflict, which further compounds their negative effects. Egypt, for example, owes the UK approximately £100mn which includes loans for arms made to the regimes of both Mubarak and his predecessor Sadat. Between 1985 and 1986 UKEF supported £250mn of arms sale loans to finance a tank factory near Cairo and a military city west of Alexandria.[5] As in Guatemala, the Egyptian people are now left paying for the actions of the governments which previously oppressed them.

Scotland has an opportunity to take a stand against unethical lending. It seems possible that, whatever the result of the referendum, Scotland will be given the powers to create export credits. We must campaign here to ensure that this agency will not follow the route of corrupt deals, human rights abuses and disregard for environmental considerations that has characterised UKEF, but instead lead the way in being a positive and socially responsible export agency, setting an example internationally of how exporters can be supported in a way that is ethical and fair[6].

[1] Jubilee Debt Campaign, 2012: Generating Terror – the role of international financial institutions in sustaining Guatemala’s genocidal regimes, p3

[2] Jubilee Debt Campaign, 2012: Generating Terror – the role of international financial institutions in sustaining Guatemala’s genocidal regimes, pp9-12

[3] Goldman, P, Kelso, C, and Parikh, M, 2001: The Chixoy dam and the massacres at Rio Negro, Agua Fria, Xococ, and Los Encuentros: A Report on Multilateral Financial Institution Accountability, The Working Group on Multilateral Institution Accountability Graduate Policy Workshop, Princeton

[4] Johnston,  BR, 2011: An Open Letter to Your Excellency, Alvaro Colom Caballeros, President of the Republic of Guatemala (reproduced on Counterpunch on 22 March 2011 as part of her work with International Rivers)

[6] Jubilee Scotland, 2012: Scotland: a new start on debt and exports,

Scotland, a nation of debt justice

1 May 2012

This blog first appeared on SCVO’s Future of Scotland website:

At Jubilee Scotland we think an independent Scotland could become the home of debt justice, meaning Scotland could hold no unfair debt, create no unfair debt, and could provide a place where countries suffering the effects of unfair debt could come to seek arbitration.

Unfair and unpayable debt is a huge global problem. Despite big steps forward, through mobilisations such as the Jubilee 2000, and Make Poverty History campaigns, some of the world’s poorest countries are still locked into a crippling cycle of debt. We believe there needs to be an appropriate mechanism to deal with this debt, especially given the growing economic crises we’re seeing in Europe.

An independent Scotland could become the home of this mechanism by promoting itself as a seat of fair and transparent arbitration for unfair and unpayable debt. By doing this, Scotland would not only be utilising its position as the holder of a strong arbitration act, but would take its place on the international stage as a home of economic justice.

Jubilee Scotland, together with the global movement working for debt justice created a set of bespoke rules on debt arbitration. These rules were presented by Fiona Hyslop MSP in March, and represent great progress towards making Scotland a centre of debt arbitration. Within just a few years, we could see Scotland offering itself as a destination for countries suffering unfair debt to seek justice. In addition to this, Scotland should take steps to ensure it is neither the holder nor creator of unfair global debt.

In the case of Scottish independence we do not know how Britain’s debt would be divided up, but one can assume that some of the debts owed to Britain will be passed over to Scotland. Many of these debts will be the result of failed exports; arms deals to dictators or ‘white elephant’ projects, which benefited British industry to the detriment of the host country.

Many of these deals will have resulted in human rights abuses, or environmental degradation, and in many cases, paying back the debts will have significant negative impacts on the lives of people in debtor countries. Very simply, when focus on government spending is on servicing debts over investment in healthcare and education, people will die. An independent Scotland must audit these debts and cancel those which it finds to be unjust.

Finally, Scotland must refuse to engage in unethical export practices. Currently Scottish companies receive financial support from UK Export Finance for international deals. With independence this function will be carried out by a Scottish department – most probably Scottish Development International. Care then must be taken to ensure that this does not follow the pattern of UK Export Finance but instead leads the way in becoming a positive and socially responsible export agency, with a strong focus on ethical guidelines and practices.

If Scotland commits to these three asks – to promote itself as a seat of arbitration , to audit and cancel its share of unfair debts owed to Britain, and to create an ethical export agency – it will prove itself a nation of debt justice.”

International Women’s Day 2012

8 March 2012

It’s International Women’s Day, and what better reason to remind ourselves of one of the most compelling reasons for Jubilee Scotland’s work – that women are disproportionally affected by unfair and unpayable debt. The most basic reason for this is simply that debt causes poverty, and women make up 70% of the world’s poor. But it goes further than this, too, because when governments are forced to make huge debt repayments, or introduce ‘austerity measures’ to qualify for debt relief, the services which are affected are those with a bigger impact on women. Here are just a few examples:

  • In many countries, men are chosen to be educated over women. This means that when there is a fee to attend school, families often send sons and keep daughters at home. In Côte d’Ivoire, the government spends $500 a year on servicing debts, which means it is forced to charge fees even for primary school. Over half of school-age girls there do not attend school.
  • Women are also denied access to education because of an assumption that their place is in the home. When social services or basic healthcare provision is removed, women often have to leave school to care for young or elderly family.
  •  Women traditionally have responsibility for fetching water for their households. Water privatisation – a classic austerity measure advised by the International Monetary Fund – means an increased workload for these women.
  • Women produce 60 – 80% of the food in poor countries, and are often the first to suffer when government controls and assistance are removed in response to debt.
  • When governments are implementing austerity measures, or trying to increase revenue to pay back debt, farmers are often encouraged to grow cash crops rather than staple foods. This means that women’s work changes from providing food for the household, to providing money. As men usually control the money, women’s positions in the households are weakened, and money is far less likely to be spent on welfare

And all this is not even mentioning that fact that women – by virtue of having the ability to bear children – are going to be most affected by cuts in healthcare. Put simply, focussing on paying external debt rather than healthcare will mean more women die.

This is not just the case in poor countries. In Greece there have been reports of women in labour being turned away from hospitals because they cannot pay the necessary Є900 charge (equivalent to about 3 months rent). Even in Britain, where debt is being used as a reason to force through huge austerity measures, Ed Miliband called the plans “the biggest attack on women in a generation”.

As Yassine Fall, the eminent Senegalese economist has said: “the debt problem is a problem of economic justice because expenditure on debt service endangers women’s right to human development”. Whether we are talking about debt cancellation in the global south – in Uganda for example, debt cancellation has resulted in equal numbers of boys and girls attending school where before there were 20% fewer girls – or fighting against austerity measures closer to home, International Women’s Day is a chance to highlight the need for an economy based on equality.

Aid is Aid, not a Bribe

8 March 2012

by Alys Mumford

Now normally I manage to resist the urge to rise to a Daily Mail article I disagree with. But for this one:

‘Well that’s gratitude! We give India £1bm in aid, THEY snub the UK and give France a £13bn jet contact’

I’ve made an exception.

The article refers to a contract awarded by the Indian government to the French firm Dassault Rafale to provide 126 military jets to the Indian air force, over British firm BAE systems. This is seen to be an affront given that Britain’s aid package to India is 15 times larger that that of France. The contract was given to France ‘despite Government claims that the UK’s £1billion aid package to India would help secure the order’.

It has always been known that ‘aid’ is often understood by governments to be payment for favourable trade terms, a supportive vote in the UN, or money expressly to be used to hire foreign firms, but it is not normally put quite so clearly (by press or government). The outrage is almost refreshing.

The reason cited for the decision to buy the jets from France is one of cost – and this seems to be what has put a few noses out of joint. We give India money, they should spend it on buying our planes, regardless of cost, quality or suitability, the logic goes. This has happened countless times througout the past decades – Indonesia’s Suharto using British loans to buy weapons to persecute thousands of Indonesian civilians is the classic example.

Aid is aid; to give money expecting a lucrative arms deal to come out of it as a result is bribery, plain and simple.