A/HRC/11/10 page 9 measures appears to be limited and of short duration. Furthermore, debt service reductions are offset by an equivalent reduction in future concessional loans from the International Development Association (IDA). 26. The gains from debt relief are often diluted by other factors, including conditions8 attached to debt relief and the lack of competitiveness of developing countries in an unequal global trading environment.9 High debt repayments and the conditions attached to debt relief and new loans - which typically limit public spending (even at the expense of funding essential public services, such as education and health care), promote economic liberalization (including privatization of public enterprises, investment deregulation and the introduction of user fees for access to public services) and prioritize debt service over fulfilment of basic needs - have not only exacerbated poverty, they have also had a particularly severe impact on access to education and health care in developing countries. 27. Debt relief conditions limit investment in education and health in many low-income countries. For example, in 2004, the IMF condition that Zambia should freeze public sector wages resulted in the Government’s failure to address the massive shortage of teachers through the recruitment of 9,000 newly qualified teachers. Similarly, a 2006 study by the United Nations Development Programme (UNDP) International Poverty Centre, which examined the effect of debt relief on “fiscal space” in Zambia, found that “the net fiscal gain from debt relief had been marginal because of the external policy conditionalities linked to the relief and associated ODA”.10 Thus, even after receiving debt cancellation, Zambia will still not be able to significantly scale-up public spending or investment owing to the continuing demands for “excessively tight fiscal and monetary policies in its IMF loan arrangements”.11 8 For example, according to a recent study by Eurodad, the IMF imposes an average of 13 conditions per low-income loan; most of these conditions entail privatization and liberalization with serious consequences for the poor in the borrower countries; see Eurodad, “Critical conditions: the IMF maintains its grip on low-income governments” (April 2008). 9 A recent World Bank report notes: “[M]ost policy advice given to poor countries over the last several decades - including by the World Bank - has emphasized the advantages of participating in the global economy. But global markets are far from equitable, and the rules governing their functioning have a disproportionately negative effect on developing countries. These rules are the outcome of complex negotiating processes in which developing countries have less voice” (emphasis added). World Bank, World Development Report 2006: Equity and Development (New York: Oxford University Press, 2006). 10 J. Weeks and T. McKinley, Does Debt Relief Increase Fiscal Space in Zambia? The MDG Implications, Country Study No. 5 (Brasilia: UNDP International Poverty Centre, 2006). 11 Action Aid International, “Overview: Changing IMF Policies to get More Doctors, Nurses and Teachers Hired in Developing Countries” (March 2008) (available at http://www.actionaidusa.org/assets/pdfs/imf_project/IMF_and_health.pdf (accessed 8/3/09)).