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Mr. Gordon Brown replies Daniel Elombah Print E-mail
Written by Daniel Elombah   
Wednesday, 14 February 2007

 

 

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Our ref: 10/20392/07

Daniel Elombah

Danny Elombah [ebukam@hotmail.com]

13 February 2007

ARTICLE IN THE GUARDIAN ABOUT, EDUCATION, NIGERIA’S DEBT REPAYMENT AND AFRICAN ILLEGAL IMMIGRATION

Thank you for your open letter in the Guardian of the 4 January to the Chancellor about education, Nigeria’s debt repayment and illegal immigration. I have been asked to reply on his behalf and am sorry for the delay.

Thank you for your acknowledgement of the UK Government’s commitment to education and welfare in Africa and for your support of the Government towards achieving its aims. In your letter you mentioned the UK Government’s announcement to significantly increase aid for education by spending at least £8.5 billion ($15 billion) on aid for education over the next ten years, entering into 10-year agreements with countries. The UK Government will contribute an extra £100 million to The Education For All Fast Track Initiative (FTI) over the next two years to support countries in speeding up and expanding their education plans.

In addition, the Department for International Development (DFID) runs a school linking programme designed to encourage and increase understanding of the challenges and opportunities that face school children across the world. Support, including grant funding, is available to schools who wish to participate in the programme, funding for which was doubled in April 2006 to £7.5 million over three years. A new publication draws together all the sources of advice and support for schools in one easy and accessible guide. DFID school partnership coordinators will be holding regional roadshows for schools later in the year to help explain what they can do to establish, build and maintain a link with a school in the developing world. For your information I enclose a copy of the joint publication between HM Treasury and DFID "The World Classroom – Developing global partnerships in education." This is also available on the DFID’s website

http://www.dfid.gov.uk/pubs/files/world-classroom.pdf.

On the issue of Nigeria’s repayment of its debt to the Paris Club, the UK Government worked very hard with the Government of Nigeria to deliver the 20 October 2006 Paris Club debt deal. This deal saw some US$18 billion cancelled (equivalent to about 60% of Nigeria’s debt in the Paris Club) in return for Nigeria using part of its oil windfall to pay off its remaining debt. This represents the largest single debt relief package ever for sub-Saharan Africa and is a tremendous achievement. The debt deal was designed by, and done at the request of the Nigerian government, based on their wish to use their additional oil revenues in this way and in support of their own economic reforms and development strategy.

The UK alone cancelled £2.8 billion and in exchange received a payment of almost £1.7 billion. In terms of the UK’s balance sheet, or net worth, this resulted in replacing an asset with a nominal value of £4.5 billion with another asset (cash) worth £1.7 billion. So, as a result of the deal, the UK is no better off and its net worth has in fact been reduced by £2.8 billion. This means that if the UK were to hand back the £1.7 billion it would require DFID to finance it from its development budget. This would mean reallocating DFID’s budget at the expense of other poor countries. Nigeria is not a Heavily Indebted Poor Country (HIPC), and given its relative financial position and oil resources, for the UK to go further and provide one hundred per cent debt cancellation for Nigeria (as it does for HIPCs) would not be an appropriate allocation of our aid resources given that they are not finite.

The President of Nigeria and his Finance Minister at the time both welcomed the debt deal, and we hope that others can support the elected Government of Nigeria as they seek to tackle poverty and meet the Millennium Development Goals (MDGs). The historic debt deal freed up resources to fight poverty. This year $750 million that would have been paid to creditors was allocated instead to education, health and infrastructure projects through a virtual poverty fund. Federal Ministries accessing the fund have to meet strict criteria, including better project design, strict compliance with procurement rules and external scrutiny non-governmental organisations (NGOs). Progress has been also been made overhauling accounting systems; new computers have replaced the old ledger books and spending has been tagged to make sure it reaches the poor. Nigerians are starting to see the benefits:

· 145,000 teachers were retrained over the summer

· 40,000 new teachers have been recruited, and

· construction has started on water, road and power projects across the country.

The UK Government made significant progress in 2005 in the fight against poverty. The Gleneagles G8 summit agreed on an ambitious multilateral debt deal that will cancel up to $50 billion of debts owed to the International Monetary Fund (IMF), World Bank and the African Development Bank. Many countries have made commitments to substantially increase their aid levels. DFID has committed £1.1 billion in bilateral assistance to Africa for 2005/06, and has committed almost twice that amount in aid though multilateral institutions, a significant proportion of which will help Africa to meet the MDGs.

In your letter you raise the issue of Nigeria’s "Universal Free Primary Education". While primary education has theoretically been free in Nigeria for about three decades, it is well known that it has not been free in practice. It was to address this problem that President Olusegun Obasanjo signed the Universal Basic Education Act in 2004. Although significant progress is being made, and the current Federal Government of Nigeria is to be highly commended for its strong political commitment to making education free in practice as well as in theory, the economic and financial barriers are still the greatest obstacles to poor families sending their children to school. (Source: Nigeria Ed-Data Demographic and Health Survey, National Population Commission, 2004.) Families still have to pay fees to Parent Teacher Associations that maintain the fabric of the school buildings and employ some of the staff. They also have to bear the cost of educational materials (including textbooks) uniforms, food and transport. That's one of the main reasons why about 40% of primary-school-aged children do not attend school. 65% of girls do not attend primary school in parts of the poorer north.

You may like to be aware that DFID is providing £26m between 2005 and 2007 to help the Governments of six northern Nigerian states get more girls into school. The project is implemented by UNICEF. An independent review in 2006 found that girls' attendance had risen by 25% in the Local Government Areas supported by the project. DFID is also supporting three other northern states (including the high-population states of Kano and Kaduna) to prepare prioritized, fully costed education sector plans that will improve access, quality and equity throughout the education sector. This is enabling them to access an additional $50m of World Bank financing, as well as using their own resources much more effectively. DFID is also providing critical technical support to the Federal Minister of Education, Dr.Obiageli Ezekwesili, as she undertakes a major reform of the entire Nigerian education sector.

I have noted your strong concerns about illegal immigration to the UK. This Government has put in place policies to protect people from being exploited, such as the National Minimum Wage and Gangmaster legislation. The Government's policy in relation to amnesties is that they can act as a pull-factor and should not be used to reward those who are working illegally.

The Government is taking steps to strengthen its response to illegal working, focusing on the responsibility of employers to only employ legal workers and will be targeting rogue employers who deliberately use illegal immigrants, often with little regard for their health and safety.

I hope that you will find this reply helpful.

Yours Sincerely,

Bruce Ridewood

International Poverty Reduction Team

 

 

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RobotRobot is offline 
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...Read the full article.

Posted by Robot| 14.02.2007 10:29

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EyesWideOpenEyesWideOpen is offline 
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I wonder whether the fact that this reply makes OBJ look good has anything to do with no one responding to it........ hmmmm

Posted by EyesWideOpen| 15.02.2007 03:56

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Son of the DeltaSon of the Delta is offline 
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The business partners of the politicians from the rich and poor countries exposed!



'Vulture funds' threat to developing world
Meirion Jones
BBC Newsnight


Child in Zambia
Zambia's infrastructure plans could be threatened

Vulture funds report
On Thursday 15 February a high court judge in London will rule whether so-called vulture fund can extract more than $40m from Zambia for a debt which it bought for less than $4m.

There are concerns that such funds are wiping out the benefits which international debt relief was supposed to bring to poor countries.

Martin Kalunga-Banda, Zambian presidential adviser and a consultant to Oxfam told Newsnight, "That $40m is equal to the value of all the debt relief we received last year."

Vulture funds - as defined by the International Monetary Fund and Gordon Brown amongst others - are companies which buy up the debt of poor nations cheaply when it is about to be written off and then sue for the full value of the debt plus interest - which might be ten times what they paid for it.

Mockery

Caroline Pearce from the Jubilee Debt campaign told Newsnight it makes a mockery of all the work done by governments to write off the debts of the poorest.

"Profiteering doesn't get any more cynical than this. Zambia has been planning to spend the money released from debt cancellation on much-needed nurses, teachers and infrastructure: this is what debt cancellation is intended for not to line the pockets of businessmen based in rich countries."

Martin Kalunga-Banda
Martin Kalunga-Banda says $40m is equivalent to Zambia's annual debt relief
Debt Advisory International (DAI) manages a number of vulture funds which buy up the debts of highly indebted poor countries cheaply and then sue for the original value of the debt plus interest. Zambia - where the average wage is just over a dollar a day - is one of the highly indebted poor countries which the world's governments agreed needed debt relief.

Suing

In 1979 the Romanian government lent Zambia money to buy Romanian tractors. Zambia was unable to keep up the payments and in 1999 Romania and Zambia negotiated to liquidate the debt for $3m.

Before the deal could be finalised one of DAI's vulture funds stepped in and bought the debt from Romania for less than $4m. They are now suing the Zambian government for the original debt plus interest which they calculate at over $40m and they expect to win.

Like the other vulture funds DAI refuse to do interviews but reporter Greg Palast caught up with the company founder Michael Sheehan outside his home in Virginia.

Greg Palast (right) and Michael Sheehan
Greg Palast (right) tracked down DAI's Michael Sheehan
Greg Palast: "I just want to ask you Mr Sheehan - why are you squeezing the poor nation of Zambia for $40 million - doesn't that make you a vulture?

Michael Sheehan: "No comment I'm in litigation. It's not my debt."

Greg Palast: Aren't you just profiteering from the work of good people who are trying to save lives by cutting the debt of these poor nations?

Michael Sheehan: Well there was a proposal for investment. That's all I can talk about right now.

Five years ago Gordon Brown told the United Nations that the vulture funds were perverse and immoral: "We particularly condemn the perversity where Vulture Funds purchase debt at a reduced price and make a profit from suing the debtor country to recover the full amount owed - a morally outrageous outcome". But the vulture funds are still operating.

'We don't do interviews'

The London case is just one of many which are running around the world.

Newsnight went to New York to try to interview Paul Singer - the reclusive billionaire who virtually invented vulture funds.

In 1996 his company they paid $11m for some discounted Peruvian debt and then threatened to bankrupt the country unless they paid $58m. They got their $58m.

Now they're suing Congo Brazzaville for $400m for a debt they bought for $10m.

We didn't get our interview. His spokesman told us, "We have nothing to hide; we just don't do interviews".

US courts


Jubilee Debt Campaign told Newsnight that they are calling on Gordon Brown to turn his moral outrage about vulture funds into action

Watch more of Greg Palast's Newsnight reports
The vulture funds raise most of their money through legal actions in US courts. Those actions against foreign governments can be stayed by the word of the US President and that is where lobbying and political influence becomes important.

Debt Advisory International are very generous to their lobbyists in Washington. They have been paying $240,000 a year to the lobby firm Greenberg Traurig - although recently they jumped ship to another firm after Greenberg Traurig's top lobbyist was put in jail.

Paul Singer has more direct political connections. He was the biggest donor to George Bush and the Republican cause in New York City - giving $1.7m since Bush started his first presidential campaign.

Rudi Guiliani is the favourite to be the next Republican presidential candidate and a leaked memo from his campaign shows that Paul Singer has pledged to raise $15m for Guiliani's campaign.

Tactics

The vulture funds have teams of lawyers combing the world for assets which can be seized to settle their claims. There have also been claims of dubious tactics.

Back in Britain the Zambian case has seen much legal discussion about allegations of bribery. The Zambian legal team - led by William Blair QC - Tony Blair's brother, has argued that a $2m bribe was offered to the former Zambian President to make it easier for the vulture funds to claim their money.

They showed the court an email disclosed in the Zambia case saying that a payment to the "President's favourite charity" had allowed them to do a more favourable deal.

When we caught up with Michael Sheehan outside his house in Virginia he told us it was not a bribe but a charitable donation.

He told us, "We offered to donate debt to a low income housing initiative which was a charitable initiative which did end up building several thousand houses" before adding "you're contorting the facts, you're on my property and I would ask you to step off".

The Jubilee Debt Campaign told Newsnight that they are calling on Gordon Brown to turn his moral outrage about vulture funds into action if he becomes Prime Minister and change the law to make the Zambian case the last to appear in a British court.


Posted by Son of the Delta| 15.02.2007 07:50

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Last Updated ( Thursday, 24 April 2008 )
 
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