5 - A Matter of Life and Debt

Summary

Addressing the issue of ‘Third World’ debt was central to Gordon Brown's commitment to eliminate global poverty. The first of many forays into the realm of international development made by the New Labour government upon its arrival into office, it would become a hugely important instrument in freeing up the financial resources urgently required to meet this aim. Alongside the other means of development finance, such as increases in bilateral aid and the Treasury's own proposals for an International Finance Facility (IFF) discussed in Chapter 7, debt relief would provide an important means by which the most heavily indebted of these poor countries could restructure their economies and finance the projects needed for development and growth.

Eligibility for debt relief, like the aid that would be made available through the IFF, would be dependent upon recipient countries meeting a certain set of conditions laid out by the international community. However, where the IFF sought to reconcile the disbursement of aid with the discourse of ‘rights and responsibilities’ articulated by Gordon Brown and his colleagues at home, the approach to debt relief discussed here explores what these global ‘responsibilities’ looked like in practice. This chapter argues that the ‘responsibilities’ laid out by Brown and other New Labour officials were designed to embed the economies of heavily indebted poor countries (HIPCs) into a qualitatively ‘new’ international economic and financial architecture: an arrangement of state–market relations based upon the framework of the ‘post-Washington Consensus’. Although designed principally for the global polity, this new architecture was derived from a similar set of reforms that Gordon Brown as Chancellor of the Exchequer had introduced at home in order to reduce Britain's own exposure to market volatility and global instability.

Indeed, as at home, Gordon Brown's approach to management of the global economy was derived from an almost unwavering belief in market liberalism. Here, he and other Whitehall colleagues time and again reiterated their commitment to open markets and to pursuing policies that facilitated, rather than hindered, the expansion of international market activity. It was widely believed that by opening up the global economy still further, increased flows of international capital could reach developing countries, encouraging growth and reducing poverty.