Ms Eilis Ryan:

I will pick up where Ms Gold left off by speaking specifically about the situation around debt. I will explain why debt restructuring is critical for developing countries in an international context, with specific reference to the sustainable financing of fair development. Many people here will be familiar with the debt crises of the 1970s and 1980s. This is often seen as an historic issue for the developing world that has been dealt with. Debt will be particularly critical during the Addis Ababa negotiations for three reasons. First, approximately 14 cent of every euro that a developing country receives in aid is spent on repaying debts. That is not a particularly effective use of aid coming from OECD countries such as Ireland. Second, the debt crises in Africa, Asia and Latin America, which had decreased before 2006, have started to increase again since then. As repayments have escalated, the number of countries that cannot afford to made debt repayments has started to grow. Third, many types of new financing will be under discussion in Addis Ababa.

In particular, private financing and public private partnerships will be discussed which, in the long term, will lead to the state taking on more debt because it is effectively the lender of last resort for many essential services.

In terms of civil society's position globally on how debt should be dealt with, a number of key points emerge but I wish to focus on the need for an international mechanism to deal with sovereign debt crises when they happen. At the moment when a country enters a sovereign debt crisis, unlike a private individual or corporation, it does not have a mechanism through which it can negotiate bankruptcy. There is always a scrambling around, with ad hocsolutions proposed to facilitate the debtor and also the creditor, who obviously wants some level of repayment. Civil society organisations contend that the absence of such an international mechanism means that debt crises always escalate beyond what is necessary. Recently an initiative was taken by the Argentinian Government to create a sovereign debt restructuring mechanism at the United Nations which received the overwhelming backing of developing countries, including all of Irish Aid's partner countries. Including that mechanism and backing it up in the outcome document of the financing for development negotiations in Addis Ababa is essential to ensure that developing countries due not suffer under unjust debt crises.

The fact that there is overwhelming backing from developing countries for this mechanism provides a strong impetus for the Irish Government to show its true partnership with the countries it works with in development. The Bolivian Government in its statement on debt in the context of the financing for development negotiations called the establishment of a UN mechanism on debt restructuring key to achieving the Millennium development goals and the sustainable development goals post-2015. That statement was made on behalf of a group of 77 countries which includes Ireland partner countries. In the countries in which Ireland invests the most money, particularly in terms of humanitarian spending, there are growing debt crises. The IMF considers both Zimbabwe and Sudan to already be in a state of debt crisis. Ireland's humanitarian spending is heavily focused on both of these countries but there is strong evidence to suggest that the effectiveness of humanitarian spending is limited when countries are in debt crisis.