Debt Relief & AIDS
by Mara Vanderslice, 2003.02.26
Deeper debt relief will better help poor countries to fight AIDS.
In January 2003 President Bush proposed the Emergency Plan for AIDS Relief, calling on Congress to spend an additional $10 billion over the next five years to help countries in Africa and the Caribbean fight AIDS. The US announced that 14 countries with the highest rates of HIV infection in Africa and the Caribbean would be the targeted beneficiaries of the additional $10 billion.
However, according to the United Nations Development Program statistics, in the same period these 14 countries would pay approximately $36 billion in total debt-servicing to their creditors in the rich countries.
Each year these countries will continue to pay out more money than they will receive from the President’s AIDS initiative.
US Senate AIDS Proposal Would Have Helped
The AIDS bill that passed the US Senate unanimously last year, sponsored by Senators Frist and Kerry, would have:
* Lowered debt so that no qualifying highly indebted poor country pays more than 5% of its budget on debt service annually (10% if the country has no AIDS or health crisis). Currently, the 26 HIPCs at decision point pay 15% of their budgets on debt.
* Reduced poor country debt payments by a $1 billion every year. Currently, the heavily indebted poor countries spend $2 billion every year in debt service that could otherwise go to health, education and the fight against AIDS.
Examples of How Debt Relief Helps Fight AIDS
In dozens of countries, debt relief savings have helped to fund the fight against HIV/AIDS. Here are only a few examples:
* Uganda, the first country to receive debt relief used US$ 1.3 million of its debt savings specifically for their national HIV/AIDS plan. This investment played a key role in the government’s success in reducing HIV infection rates by 40%
* Cameroon received a US$ 114 million cut in debt service. With help from debt savings, a comprehensive national HIV/AIDS strategic plan for was launched. The plan included promoting behavior change among young people, making voluntary testing and counseling widely avail able and preventing HIV transmission from pregnant women to their babies.
* Malawi received a cut in debt service of 30%, or US$ 28 million. These funds financed the purchase of critical drugs for hospitals and health centers, hiring extra staff and support in primary health centers, and training new nurses.
Evidently, deeper debt relief and not adhoc grants-in-aid will help many poor countries fight AIDS better and produce lasting and sustainable improvements in quality of life in these countries.