Neil Watkins is national coordinator of Jubilee USA Network, the U.S. arm of the global debt cancellation campaign. Steve Kretzmann is executive drector of Oil Change International , an organization dedicated to identifying and overcoming political barriers to the coming global clean energy transition.
When the G-8 met in Gleneagles last year, global poverty and climate change headlined the agenda. This weekend in St. Petersburg, energy security tops the list, and last year's priorities seem forgotten. The G-8 appears to define energy security primarily as promoting the expansion of oil production worldwide, which will only further increase oil dependence, exacerbate climate change and drive countries deeper into debt.
Impoverished countries are not only drowning in debt, but they are drowning in oil and could soon be literally drowning in rising seas. Those that import oil are beholden to skyrocketing prices. These increased prices threaten to erase the limited gains made last year at the Gleneagles summit. Moreover, poor countries are hit hardest by the growing catastrophe of climate change, driven by our addiction to oil and other fossil fuels. These connections between poverty and energy have become increasingly clear to our organizations and must be recognized by the G-8.
For those countries that import oil from abroad, higher oil prices are literally lethal. According to figures compiled by the Center for American Progress, the cost of Tanzania's oil imports rose from roughly $190 million in 2002 to about $480 million in 2006, representing an additional $290 million in payments each year for approximately the same amount of oil. Conversely, debt cancellation is expected to free up roughly $140 million in Tanzania in 2006, less than half of the additional amount that the country is paying for oil imports each year.
Similar trends on the impact of rising oil prices can be detected in a variety of countries around the world. Research conducted by the Mali Folkecenter estimates that Mali has gone from spending $100 million per year on oil imports in 1998 to almost $400 million in 2005. This increase dwarfs the $28 million in debt relief it will see in 2006 from last year’s G-8 commitment on debt cancellation. This money was supposed to be used for healthcare and clean water, not oil. How will these countries pay for their increasing oil bills? Deeper into debt they go.
Tanzania and Mali are not alone. International Energy Agency officials estimated that the cost of oil for all of sub-Saharan Africa would rise by $10.5 billion in 2005. This is more than 10 times the annual debt relief received by all 14 African countries included in the 2005 G-8 debt deal. Moreover, there are dozens of impoverished countries not receiving debt cancellation that are also hurt by rising oil costs. These include Kenya and the Philippines, which have large impoverished populations and a history of odious debts.
Impoverished countries that produce oil also suffer despite the promise of prosperity that comes with black gold. Consider this: Ecuador spends the majority of its oil revenues on repaying rich country creditors, including the International Monetary Fund and private banks. And Nigeria spent $12 billion in oil reserves this past year, paying off its balance to another rich country creditor grouping, the Paris Club. In both cases this money could have been better spent combating child poverty and HIV/AIDS. Instead it is only continuing to serve the interests of rich country governments and consumers and oil companies.
Add to this dismal picture the effects of climate change—fueled largely by emissions from oil and other fossil fuels—which will further undermine efforts to fight poverty. Christian Aid estimates an astonishing 182 million people in sub-Saharan Africa alone could die of diseases attributable to climate change by century’s end. Climate-induced floods, famine, drought and conflict threaten the existence of millions more worldwide. The G-8 should view the issues of poverty, energy security and global warming as intrinsically linked.
It is not too late. Ahead of next year’s G-8 summit, to be held in Germany, Jubilee USA Network—of which Oil Change International is a member—is mobilizing for 2007 as a Sabbath Year, seven years after the historic Jubilee 2000 campaign. Together with the ONE campaign, the Global Call to Action Against Poverty and other networks, we will be calling on the G-8 to enact broader anti-poverty initiatives including cancellation of all unjust debts that stand in the way of impoverished nations meeting the needs of their citizens. Instead of subsidizing big oil, they must make large investments in sustainable energy alternatives. It is not possible to separate efforts to address poverty from energy issues. We cannot remain dependent on oil and expect to make gains against the interconnected scourges of debt, global poverty and climate change.
