Campaign for debt forgiveness gains momentum
by Gumisai Mutume
Johannesburg, March 22 -- The growing campaign for debt forgiveness in the developing world is gaining momentum.
At a regional conference in Johannesburg over the weekend, Jubilee 2000 said its international campaign to rid the developing world of a crippling debt burden will soon culminate in a South-South summit to push the drive for debt cancellation before the next millennium.
"The Jubilee 2000 Campaign is a call for the cancellation of international debts by 31st December 2000 by the global movement called the Jubilee 2000 Coalition," says Kilron Kembe of the Zimbabwe Council of Churches (ZCC). "The campaign is advocating a debt-free start to the millennium for billions of people in the poor countries," he says.
The campaign is the biggest movement of individuals, churches, non-governmental organisations (ngos), trade unions and student bodies from more than 40 countries organised by nations of the South to push for social justice.
The movement models itself on the 18th Century campaign to abolish slavery. It is among other things seeking 22 million signatures to lobby the Group of 8 (G-8), which comprises the United States, Britain, France, Germany, Japan, Italy, Canada and Russia.
The G-8 meets in Cologne, Germany, in June where Jubilee 2000 is planning a human chain formation to symbolise the global solidarity of the world's developing countries as part of the protest for debt cancellation.
Annually Africa spends more than $13 billion on debt, double the amount it puts into health and primary education.
In 1997, Argentina remitted more than $17 billion to overseas creditors in interest and debt servicing payments, more than 150 times the amount the government spends on education and culture. The figure has doubled over the past seven years. Had Argentina invested the $17 billion in its people, it could have built 600,000 top quality dwellings at $30,000 each, generating 2.4 million jobs. It could have also built 100 public hospitals or 500 schools.
Participants at the Jubilee 2000 conference heard how the concentration of wealth and payment of interests on debt leaves people of the developing world without possibilities and the State without resources.
"The momentum that is building up in our countries is extreme. A New World Moral Order is what we are talking about and will continue talking about. We will be heard," says Alejandro Bendana, an activist from Nicaragua.
Bendana says Jubilee 2000 is not only about debt. "It's about redemption, liberation of the oppressed."
"The debt is more than just financial. There is the moral one owed by the north to the south for oppression, the ecological debt for our forests, the gender debt for the oppression of our women," says Bendana.
Recently world leaders have been falling over each other to show concern about the debt crisis facing the most impoverished economies.
The latest is the proposal of US President Bill Clinton which follows those of Britain, Germany and France. Clinton is offering to slash 70 billion US Dollars worth of debt from the poorest countries in exchange for economic reforms.
"The question must be asked whether the partial debt relief plans promoted so far by Clinton, the International Monetary Fund (IMF) and the World Bank have done any good?" notes Jubilee 2000 in a statement.
"The answer is that the spectacular failure of the Highly Indebted Poor Countries (HIPC) initiative to make even a slight dent onto the debt of poor countries forewarns us to be suspicious," it says.
Economic reforms entail cutting government social spending, raising interest rates, deregulating business, trade and finance and privatising state enterprises which Jubilee 2000 says have already widened the gap between rich and poor in developing countries.
"We support HIPC, the Highly Infuriated People's Coalition, and not the Highly Indebted Poor Countries initiative," says Bendana. "We don't need to give HIPC another 15 years only to realise it is not the solution to the debt crisis."
The debt crisis dates back to the 1970s when the Oil Petroleum Exporting Countries (OPEC) quadrupled the price of oil in the wake of the collapse of the US dollar.
Banks, seeking investments for their new funds, made loans readily available to developing countries often without evaluating the loan requests nor monitoring their use.
But the US Federal Reserve Board raised interest rates above 21% in 1981 in its efforts to attack inflation and protect value of financial assets, creating a corresponding rise in international rates and a turn-around in the capacity of developing countries to service the debts. The 1981/1982 recession reduced demand and prices for the exports of developing countries. Moreover much of the loans had not benefited the poor in these countries but had gone into the purchase of arms, shoring up of oppressive regimes or invested in ill-researched or unrealistic projects.
"It's like asking a man in a hole to try and dig himself out of the hole," says Dennis Brutus, Jubilee 2000 chairman. "Legislation is being designed in America for Africa."
The above article by the Inter Press Service appeared in the South- North Development Monitor (SUNS).