Developing country groups slam United Kingdom’s climate loans

According to the website of the Word Development Movement (WDM) at www.wdm.org.uk, the fact that developing countries are entering into loans to help them cope with climate change is a major problem and regarded as unfair, particularly as they are not the ones who caused the human-induced climate change in the first place.

In late June, groups from 13 developing countries slammed United Kingdom (UK) climate loans that were set to be agreed in South Africa at a preparatory meeting for the United Nations Climate Conference (COP 17) in Durban at the end of November this year. The loans are to be given through the World Bank.

Community leaders in countries including Nepal, Bangladesh, Mozambique and Yemen have written to British Cabinet ministers Chris Huhne and Andrew Mitchell, rejecting the loans that the UK is providing to its countries to help them cope with climate change.

In their letter, they write that the UK and other rich industrialised countries that have done the most to cause climate change, owe a climate debt to poor countries that are worst affected by the phenomenon.

“Climate loans will only lock our countries into further debt, and further impoverish our people,” the letter states.

Criticism against World Bank

It is reported by the WDM that new research from the organisation and the Jubilee Debt Campaign UK reveals that the UK’s climate funding is pushing the world’s poorest countries deeper into debt.

Their report, entitled “Climate Loan Sharks”, condemns the World Bank for imposing its own priorities on countries receiving climate loans, and ignoring national priorities.

The WDM’s director Deborah Doane said at the time of the release of the letter that “the giving of climate loans rather than grants is contrary to both (the UK’s) Conservative and Liberal Democrat Party policy. Yet, the UK government is supporting loans of $1.1 billion to some of the poorest countries in the world such as Cambodia, Mozambique and Zambia, for these countries to deal with the impacts of climate change – a problem industrialised nations are largely responsible for.

“Saddling countries like Zambia with climate loans is like driving your car into the house of the low-income family next door, and then lending them money to pay for the damage.”

Lidy Nacpil, an anti-debt campaigner from the Philippines, said that “people from developing countries are not responsible for climate change, but we are bearing the brunt of its impacts. Floods, droughts and disease are destroying people’s lives.

“The UK’s policy of pushing World Bank loans on countries already burdened with debt, instead of paying compensation for the damages it has caused, is completely unjust and irresponsible.”

Director of Jubilee Debt Campaign UK Nick Dearden, who is involved in some of the research that informed the letter, said “unjust debts have increased poverty and inequality across the world. Giving loans to countries to cope with the damage we have caused is morally indefensible.

“Developing countries are being made to pay twice. Firstly, through the impact of climate change; and secondly, by paying off these loans.”

The anti-poverty groups have supported the call by the international campaigners who have written to the UK government, for the country to pay its climate debt to developing countries in grants not loans, and for its climate funds to be channelled through the United Nations and not the World Bank.

Among the WDM’s grievances against the World Bank are the following:

• In Nepal, the World Bank overruled the Nepalese government’s own plans for that which its climate loan should be used for;

• In Mozambique, the World Bank listed civil society groups that it claimed it had consulted about use of a climate loan – but the groups, when asked, were unaware of the loan programme; and

• Grenada’s debt is already 90% of its gross domestic product (GDP), yet it is to be lent a further $22 million through the World Bank for climate change adaptation – over 3% of GDP.