Andrew Mitchell and Justine Greening back calls for foreign loan transparency

https://www.theguardian.com/global-development/2019/may/30/andrew-mitchell-and-justine-greening-back-calls-for-foreign-loan-transparency

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Three former international development secretaries are among 50 British MPs urging the British chancellor to take “strong action” to increase transparency on loans to governments, in advance of next month’s G20 meeting.

Citing the alleged involvement of UK-based companies in secret loans to Mozambique, Andrew Mitchell, Justine Greening and Hilary Benn joined parliamentarians from every party in calling for regulations to ensure loans to governments are publicly disclosed.

Britain should take a leading role in increasing transparency, the MPs said in a letter, holding governments to account for the way loans are spent. This should also give borrowers lower interest rates, they said, because lenders can be more confident about the size of risk they are taking on.

The International Monetary Fund warned of a mounting debt crisis in the world’s poorest countries last year. Recent figures, published by the Jubilee Dept Campaign, show debt payments in developing countries increased by 85% between 2010 and 2018.

“Given the City of London’s role as a major global financial centre, a large number of international debt contracts are owned under UK law, and it is therefore of urgent importance that the UK government take a lead on this agenda,” MPs wrote.

The letter called on Hammond to secure agreement on the creation of a publicly accessible registry of loans to governments, and a commitment by governments and multilateral institutions at the G20 to disclose the loans on the registry.

“We hope you will make the UK a world leader in improving the transparency of loans to governments, in the interest of good governance around the world,” the MPs told Hammond.

Signatories to the letter include former Conservative cabinet minister Caroline Spelman, Labour MPs Margaret Hodge, Stephen Twigg, the chair of the international development committee, and Caroline Flint, deputy Liberal Democrat leader Jo Swinson, Green party MP Caroline Lucas,and SNP shadow treasury spokesperson Alison Thewlis.

Sarah-Jayne Clifton, director of Jubilee Debt Campaign, said the government had done little so far to ensure public disclosure of loans. “It is brilliant that MPs from all parties in the UK parliament are calling for action to strengthen transparency around loans to governments,” she said.

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“The UK government and G20 need to act now to ensure civil society, media and parliamentarians can get access to information on debts taken out by governments on behalf of the public.”

Earlier this month, Detelina Subeva, 37, a former Credit Suisse AP banker, based in London, pleaded guilty in a US court to a charge that she helped launder money from a kickback scheme involving $2bn (£1.6bn) in loans to state-owned companies in Mozambique.

Two other former Credit Suisse bankers have been charged in the case, both of whom are fighting extradition from London to New York. Mozambique’s former finance minister, Manuel Chang, also charged in the case, is fighting extradition from South Africa. Credit Suisse said the bank had been unaware of any illegality.