The Group of Eight and Debt - part 2

By Bill Turnbull W.F.

‘ “You will declare this fiftieth year to be sacred and proclaim the liberation of all the country’s inhabitants. You will keep this as a jubilee: each of you will return to his ancestral property, each to his own clan. ... If you buy land from, or sell land to, your fellow countryman, neither of you may exploit the other. ... So you will not exploit one another, but fear your God, for I am Yahweh your God.” ’ (Leviticus 25:10, 13 and 17.)

In the last issue we saw something of the debt situation and the role which the G8 has to play. In the final part of the article we look to the future as the months of this second millennium tick away.

The Heads of State are elected and funded by their people to represent their views at the G8 level. The money with which they hold their Summits and which they dispense in aid comes from the taxpayers of the world’s richest countries. It would appear that a major problem at present is that the electorate do not have a say in how the money is used. It is even questionable if they are listened to! An organisation which is trying to right this and the debt situation is the ‘Jubilee 2000’ Coalition. Their wide support was obvious at the Birmingham G8 Summit in May, and the response of the leaders (see the box on the opposite page) speaks for itself.

‘The Jubilee 2000 Coalition’

The seeds of ‘Jubilee 2000’ were sewn by Martin Dent at Keele University, in the North West of England, in 1990, but the origins of the idea are found in the Jewish concept of the jubilee year - see the quotation above from Leviticus. The new debt campaign was supported by the Keele students and in April, 1996, it was fully launched by Christian Aid, CAFOD and Tearfund and endorsed by many of the major churches in the UK. From this simple beginning ‘Jubilee 2000’ has grown into an international coalition of churches, church organisations, trades union and NGOs. Various International Organisations in the following countries are running, or are in the process of setting up ‘Jubilee 2000’ campaigns: Australia, Austria, Britain, Canada, Denmark, France, Ghana, Germany, Honduras, Hong Kong, India, Ireland, Italy, Kenya, New Zealand, Norway, Philippines, Sweden, Switzerland, Tanzania, USA, Zambia, Zimbabwe.

A basic belief of ‘Jubilee 2000’ is that debt is one of the fundamental causes of serious poverty in developing countries. For example Sub-Saharan Africa alone repays around US$33m. a day to the World Bank, the IMF and Governments, which could be used to help the continent move forward. The Coalition’s aims may be summed up in the following general points: the cancellation of ‘unpayable debts’ which are owed by the world’s poorest countries by the year 2000; that remaining debt should be sustainable; that the whole debt agreement process should be ‘transparent’; and that money saved by debt cancellation should be used to benefit the poor of the debtor country.

A one-off cancellation of unpayable debt is just a first step in the process of setting up a new system of controls so that a similar situation will not arise in the future. Much of the debt crisis can be traced to irresponsible lending which is not often recognised, nor admitted by the donor countries and institutions. This shared responsibility needs to be acknowledged and openness should be followed in debt relief. ‘Jubilee 2000’ wish to restore a balance between creditors and debtors so that both are treated justly and that all have the possibility of economic self-determination. A mutually agreed committee, that would be overseen by the UN, could decide the decisions on debt remission.

At present all debt related negotiations are carried out in private. ‘Jubilee 2000’ calls for the international public lending system to be more transparent and not to be carried out in secret. After all it is the taxpayers’ money from the donor country, or institution (IMF or the World Bank), which goes to a developing country so they should be allowed to have a say in how it is spent. There needs to be openness all round to lessen the possibility for corruption or the chance of funds going to support dictatorships. The Coalition also say that loans and aid should no longer be used to subsidies arms exports.

At present one of the major activities which is under way, and that can involve everyone, is collecting signatures for a ‘Jubilee 2000’ petition which will be delivered to the Heads of State at the G8 Summit in Germany next year (June, 1999). At present ‘The Jubilee 2000 Petition’ is being collected in sixty nine countries and it reads as follows:

‘I believe that the start of the new millennium should be a time to give hope to the impoverished people of the world.

To make a fresh start, I believe it right to put behind us the mistakes made by both lenders and borrowers, and to cancel the backlog of unpayable debts of the most impoverished nations.

I call upon the leaders of lending nations to write off these debts by the year 2000. I ask them to take effective steps to prevent such high levels of debt building up again. We need a new beginning to celebrate the millennium.’

In many countries members of the Coalition have access to Governments and the various financial institutions. Here in the UK they are in dialogue with the Government and many MPs, from all parties, in an attempt to make debt relief a priority. It is extraordinary the success that the campaign has had and the people who are willing to listen. The will to solve the debt problem is there, all that is needed is to form a method which would be suitable and just to all parties concerned.

The Future

If some action is not taken to change the situation in the next year, by the start of the new millennium, the Coalition says that ‘over 1.5bn. people will be in abject poverty and 40% of children in the developing world will be stunted due to malnutrition.’ Debt repayment to the various creditors keeps the poor poorer and gives the creditors control of developing countries’ economies and markets. According to UNDP figures the lives of 21m. children, who will die before the year 2000, could be saved if the equivalent money spent on debt servicing was diverted into health and education.

Even if we do not agree with everything which the ‘Jubilee 2000’ Coalition is campaigning for, it has to be admitted that some action has to be taken on the debts of the world’s most ‘impoverished’ countries. The words of the Chancellor of Gordon Brown, the Exchequer, when he addressed delegates at the Lambeth Conference, further explain the commitment which many people have to improving the situation of developing countries in the new millennium.

“Your vision is of a new climate of justice across the world, a new climate of justice that will eventually liberate nations from debt, people from poverty, and millions of individuals from unfulfilled lives, bringing our global economy and our moral universe into harmony for the benefit of all, transforming not just the politics on one continent but economics society and politics the world over.

One that recognises that by the strong helping the weak it makes us all stronger.

I was taught in church to believe that an injustice anywhere is a threat to justice everywhere.

So today, let us resolve from here in London, within 15 months of a new century, to work together, churches, political leaders, the peoples of the world to: tackle debt, tackle poverty directly, tackle the causes of poverty and the causes of underdevelopment.

So to end the long night of injustice and make the Millennium a new dawn of hope for Africa and the poorest of the developing world.”

(The Chancellor of the Exchequer, Gordon Brown's speech to the
Lambeth Palace International Meeting on Debt, 29th. July, 1998.)

Progress has been made in recent years through the various initiatives - such as the Heavily Indebted Poor Countries Initiative (HIPC) Initiative and the Mauritius Mandate. Let us hope that such a foundation may be built upon and that the new millennium will bring us all a fairer and peaceful world in which debts can be mutually forgiven!

 


Response by the Presidency on Behalf of the G8 to the ‘Jubilee 200’ Petition

On behalf of the G8 Heads of State and Government gathered here in Birmingham, I welcome the commitment so many of you have shown today to help the poorest countries in the world. Your presence here is a truly impressive testimony to the solidarity of people in our own countries with those in the world’s poorest and most indebted. It is also a public acknowledgement of the crucial importance of the question of debt.

I can assure you that all leaders here fully share your concern over the debt burden faced by many poor countries. More than that, we are all committed to helping heavily indebted poor countries free themselves from the burden of their unsustainable debts. This is why over the years we have, where possible, cancelled bilateral aid debt and in the context of the Paris Club rescheduled or cancelled substantial proportions of other bilateral debt. Aware that this still was not enough, we initiated in Lyon two years ago, the Heavily Indebted Poor Countries Initiative designed to ensure a sustainable exit from their debt burden for all the most affected countries. Over the last three years, official creditors in the Paris Club have forgiven in favour of the poorest countries US$8bn. with more than US$5bn. of that relief going to Africa.

Since then we have focused our attention on implementing the Initiative successfully. This requires a partnership between creditors and debtors and effort on both sides. Debt relief in itself is no magic solution; it can only be part of the answer to achieving sustainable development. Where a country shows a real will to pursue policies that will relieve poverty and build a sound economy, we will do our part and contribute the funds necessary to reduce their debt burden to a sustainable level. This will ensure that the resources freed up are put to good, productive use, generating growth and bringing real benefits - in the form of better education, better health, and sound, honest government - to the poorest people. We will continue to support such efforts through our development assistance programmes, through which G8 countries currently deliver some US$10bn. a year to heavily indebted poor countries.

So far six countries have qualified for debt relief from the HIPC initiative totalling around US$5.7bn. Among those six countries, Uganda has been the first to complete the process, recently receiving additional debt relief of nearly US$650m. In addition to these countries, two more countries have already benefited from preliminary positive indications regarding their possible eligibility under the HIPC Initiative.

Our ambition, reaffirmed by all G8 leaders today, is to ensure the speedy and determined implementation of the initiative and encourage all eligible countries to take the policy measures needed to embark on the process as soon as possible, so that all can be in the process by the year 2000. We will work with the others concerned to ensure that all eligible countries get the relief they need to secure a lasting exit from their debt problems. We are keenly aware of the importance of making progress. For the sake of our citizens in our own and all other countries, we must not fail.

The above text was released on Saturday 16th. May, 1998, and was taken from the G8 Summit Web site: http://birmingham.g8summit.gov.uk

 


‘The Guardian’ - Factfile Extracts

* If African countries did not have to pay debt, the money released would save the lives of about 21m. children by the year 2000 and provide 90m. girls and women with access to basic education. (1)

* The cost of meeting basic goals in Africa for health, nutrition, education and family planning would be about US$9bn. a year. (2)

* In 1996, sub-Saharan Africa paid the developed world US$13.4bn., including US$9.5bn. in new loans and US$2.6bn. of its aid (23% of all grants). So nearly a quarter of aid to Africa goes to repay debts. (2)

* Sub-Saharan Africa spends US$11.5 per person on health, US$25.3 per person on education and US$22 per person on servicing its debt. (2)

* Ghana spends an average of US$4 a year on each person on health. In 1996 the country spent US$26 per person on debt service. (3)

* Infant mortality in Zambia in 1970 was 106 per 1,000 live births. In 1996 it had worsened to 112 per 1,000. Since 1990 the country has paid a total of US$4.8bn. in debt service, about one and a half times its total economic output in one year. (4)

* Britain’s contribution to HIPC will be around £2.5bn. - less than has been spent on National Lottery scratchcards and around one-fifth of Britain’s annual cigarette bill. (4)

* Britain spends £579 per person each year on health and £355 on the military; Jamaica spends £30 per person on health, £7 on the military, and £165 on debt service; Malawi spends £2 per person on health, £1 on the military, and £6 on debt service. Neither Malawi nor Jamaica are eligible for relief under HIPC as their debts are not big enough. (4)

Extracts from ‘The Guardian’, ‘Key facts and stats on the debt burden’: (1) ‘Factfile 1’, 11th. May, 1998; (2) ‘2 The Issues’, 12th. May, 1998; (3) ‘3 The Issues’, 13th. May, 1998; (4) ‘4 The Issues’, 14th. May, 1998.

Sources: Information about ‘Jubilee 2000’ is from various sources including, pamphlet, their Web site and evidence to the ‘Select Committee on International Development’ 18th. March, 1998 .

 


Contact addresses for further information about the debt situation:

CAFOD, Romero Close, Stockwell Road, London SW9 9TY.

Tel.: 0171 733 7900 Fax: 0171 274 9630 e-mail: hqcafod@cafod.org.uk

SCIAF, 5 Oswald St., Glasgow G1 4QR. Tel.: 0141 221 4447 Fax: 0141 221 2373

Jubilee 2000 Coalition, PO Box 100, London SE1 7RT.

Tel.: 0171 401 9999 Fax: 0171 401 3999 e-mail: j2000c@gn.apc.org

 


These articles first appeared in "White Fathers - White Sisters" (UK),
issue 343, of December (1998)-January, 1999.

The articles may be published freely with due acknowledgements to the
"White Fathers - White Sisters" magazine.

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