Drop the Debt of the Transition

CEE and CIS Civil Society Declaration on Debt Cancellation

3 April 2006

Countries of the CEE and CIS (Central and Eastern Europe and Commonwealth of Independent States) region face rising debt burdens and consistently high levels of poverty and income inequality. This, if left unchecked, makes the chance of debt crisis high. Debt cancellation must be secured for all regions of the world that need it to meet international development targets, and this cancellation must include countries of the CEE and CIS region.

We, the undersigned organisations call upon our governments to support debt cancellation for the critically indebted nations of our region. This cancellation is a precondition for the sustainable development of these countries. Our governments should support an impartial process to determine which debts should be cancelled.

At the G8 Summit in 2005 in Gleneagles, Russia’s President Vladimir Putin declared that the debt of the CEE and CIS region was a key priority and should be placed on the international agenda. The issue is of such critical importance that it has been placed, alongside the energy issue, on the agenda of the G8 Summit in 2006.

This represents an opportunity for the governments of the region to raise the debt issue and their countries´ social and economic development both at national and international levels. Because present and future generations are seriously affected by their countries´ debt burdens, governments have a responsibility to address the issue head-on and engage their people in public debate about possible solutions.

In some CEE and CIS countries, governments are spending over 40% of government revenue on external debt service. This means that governments have fewer resources available to invest in health, social security and education.

These excessively high debt service payments, coupled with the complicated conditionalities attached to many loans, impact negatively upon already very high levels of poverty within the region. In some countries, over 40% of the population live below the poverty line with many hovering just above it. Debt service payments prevent governments from improving this situation. It also makes countries extremely vulnerable to internal and external shocks.

The transition of these countries towards market based economies was accompanied in most cases by a substantial build-up in external debt stocks. But the international community has so far failed to acknowledge the rapid debt accumulation that has taken place within the region over recent years.

A fair, transparent and impartial process is needed to determine which debts should be cancelled in order to help countries reach international development targets. This means that assessments of which debts need to be cancelled should be made by an independent and neutral body. This impartial process should also consider which debts could be considered illegitimate and cancelled on these grounds.

The example of Poland’s debt cancellation in 1991 shows that cancellation is possible, if the political will exists. Indeed the international community does not dispute the very clear benefits debt cancellation can bring.

The CEE and CIS region would be able to invest much more in its citizens should debt cancellation become a reality. Governments of the region should use the resources freed-up from this cancellation for investment in national development priorities. They should provide the highest degree of transparency in public finance, including revenues from natural resources, show respect for human rights and ensure people’s participation in defining what the money should be spent on.

We therefore, call on our governments to support our efforts to bring this issue to both national and international attention. Debt cancellation for the CEE/CIS region would be a clear step forward for achievement of the Millennium Development Goals.

Items marked with "*" are required to validate your signature
Items which aren't marked "Public" will be hidden on View Signatures

Petition form
Name *		Public
Surname *		Public
Organization		Public
Street *		Public
City *		Public
Zip code *		Public
State *		Public
E-mail		Public
Note