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UK pushes Pakistan, Indonesia and the Gambia into more debt

The UK government has backed loans to Pakistan, Indonesia and the Gambia without conducting any assessment of their impact, or the ability of the countries to repay. The revelations come in documents released to Jubilee Debt Campaign under the freedom of information act.

British military hovercraft landing on a Cornish beach. We don't know if this is the type sold to Pakistan, as the Department for Dodgy Deals on't tell us. (Flickr / UK Ministry of Defence)

British military hovercraft landing on a Cornish beach. We don’t know if this is the type sold to Pakistan, as the Department for Dodgy Deals won’t tell us. (Flickr / UK Ministry of Defence)

Vince Cable’s Department for Dodgy Deals (UK Export Finance) guaranteed £2.6 million of loans to Pakistan last year, including for a military hovercraft. The Pakistan government is already very heavily indebted, spending over 20 per cent of government revenue on foreign debt payments this year, more than on health and education. In September, yet another IMF bailout loan was agreed for the country. The IMF has now been giving ‘temporary’ loans to Pakistan for 32 of the last 40 years.

Yet the UK government is increasing this debt further, through funding the purchase of military equipment. In a response received today, UK Export Finance says the loan is a ‘bond’ rather than a ‘credit’ so the UK’s ‘sustainable lending practises’ (sic) don’t apply. It’s like renaming chocolate as confectionary, and saying it isn’t part of the calorie count.

Over the last year, just 3 per cent of loans backed by the Department for Dodgy Deals had any assessment of their human rights, social and environmental impact. For the other 97 per cent, the UK government shows no interest at all in what they are funding.

The UK government backed loans to the Gambia last year for ‘Transport Consultancy’. Despite getting some debt cancelled in 2007, the Gambia is still heavily indebted and spending 14 per cent of government revenue on debt payments in 2013. Again UK Export Finance neither assessed Gambia’s debt, or talked to the Department for International Development about the loan, because it is a ‘bond’ not a credit. Even the IMF and World Bank, themselves large lenders to Gambia, say there is a moderate risk the West African country won’t be able to repay.

Finally, the Department for Dodgy Deals use the same excuse about not conducting any assessment of a loan to the Indonesian military for ‘intelligence equipment’. The Indonesian people are still paying off UK loans to former dictator General Suharto for fighter aircraft and tanks, which were used against them. Update September 25th: Andreas Harsono from Human Rights Watch in Indonesia has said:

“I’m afraid there’s not enough mechanisms and self-control to ensure that this technology is not abused. Indonesia has no third-party intelligence gathering mechanism — be [it] a court or a legislative mechanism — to approve wiretapping. The Gamma equipment is a nightmare.”

Vince Cable’s loan-pushers are out of control.

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Gambia, Indonesia, Pakistan, United Kingdom
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