You shall hallow the fiftieth year and proclaim liberation in the land for all its inhabitants. You shall make this your year of Jubilee.
(Leviticus 24:10) The year 2000 was to be a year of Jubilee. However, the ambitious worldwide campaign has failed to convince the leaders of the First World to cancel outright the massive and debilitating debts of their poor cousins in the Third World. Is Jubilee a failure then? Did the 640,000 Canadians who signed a debt cancellation petition and the countless parishioners who pestered politicians on the issue delude themselves with a naive, unattainable vision? Not according to Sara Stratton, communications co-ordinator of the Canadian Ecumenical Jubilee Initiative. “We don’t have a jubilee,” Ms. Stratton said flatly during a summer interview in her Toronto office, crammed with Jubilee posters and literature. “I mean, we don’t. But we have accomplished things that three years ago people wouldn’t have believed we could have done.” Getting debt relief firmly onto the politicial agenda, both in Canada and worldwide, is one sure sign of success, Ms. Stratton, said. Canadian Finance Minister Paul Martin has been under constant pressure from the campaign, she said, including being deluged with petitions, letters and visits. He reportedly received more mail last fall on the debt issue than on anything else. And Mr. Martin declared the campaign a “phenomenal success,” according to Jubilee campaigners who met with him. Indeed, the CEJI was awarded the International Co-operation Award for Influencing Public Policy this year. Financial commitments made in response to the debt relief campaign have, however, disappointed Jubilee supporters. The Group of Seven countries’ meeting in Cologne, Germany in June 1999, produced an agreement for up to $100 US million in debt relief but stringent conditions were attached that some critics say make the commitment worthless. Moreover, very little of that promised relief has materialized to date. Jubilee supporters’ hopes were dashed again in July in Okinawa, Japan, when the leaders of the world’s richest countries refused to commit to any meaningful new measures further to last year’s promises. Canada has agreed to cancel bilateral debts owed to it by heavily indebted poor countries, with conditions attached, as have the other wealthy countries. Again, little of the relief has been given out yet. Laurette Bergeron, a spokesperson in Canada’s Finance Department, disagrees that the recent G7 meeting was a disappointment. She noted that 20 countries were to be involved in debt relief by the end of the year. Canada has made a $215 million contribution to an international debt relief trust fund, she said. “We’re trying to do the best we can,” she said. The debt issue is complex and many-faceted. Jubilee organizers can’t be accused of unnecessarily simplifying the issues and not doing the research. They have considered and responded to many of the possible objections to debt relief (see excerpts in sidebar) and put together a number of fact sheets. Ms. Stratton explained how the 50 or so countries for which they are advocating debt relief got into trouble in the first place. In the 1970s, the wealthier countries and international banks were awash in cash and eager to lend it out. Developing countries (many of which were ruled by dictators) grabbed the money at floating interest rates and in many cases spent it building monuments to their leaders, buying arms or socking it away in foreign banks. In the 1980s, prices plunged for commodities sold by these countries, leaving them less money to repay their debts. At the same time, interest rates soared and the cost of repayment increased exponentially. The Jubilee campaign considers these debts to be illegitimate, in that the people who are suffering now to repay them had no role in the borrowing, nor did they benefit from the loaned cash. In most countries, the initial loans have been paid back, sometimes many times over. At the same time, the stringent conditions placed on many countries by lenders have made the situation many times worse, Ms. Stratton said. Structural adjustment programs have required indebted countries to cut government spending, typically on education and health care, and move production into exports, leaving them unable to feed their people. Jubilee is calling for an end to these adjustment programs, but the Group of Seven, the International Monetary Fund and the World Bank continue to insist on restructuring as a condition of debt relief. Indeed, under the Heavily Indebted Poor Countries Initiative supported by the G7, countries have to suffer under three to six years of structural adjustment before being offered any debt relief. And the relief that’s offered is only on the debt those countries are already unable to pay, it’s not total debt cancellation. The plan “is designed to keep debt at a ‘sustainable’ level so countries can keep paying it,” Ms. Stratton said. Jubilee campaigners in the Philippines say the small amount of debt relief available under the initiative is not worth the pain of structural adjustment. Ms. Stratton sums up the debt cancellation campaign thus, “We’ve walked a long road. We have won small victories. But we don’t have the big prize.” In the final year of the three-year Jubilee campaign, the theme shifts to include renewal of the Earth. Jubilee will continue to work on debt but will also lobby on land-based issues, including climate change, and land rights of aboriginal people. “Jubilee doesn’t just talk about restoring economic quality but about restoring land to its inhabitants and restoring it to its health,” Ms. Stratton said. It’s all a part of the biblical theme of restoring right relationships. For anyone disappointed with the results of Jubilee to date, Ms. Stratton repeats the adage, “Jubilee is a journey of many steps.” And this woman with the PhD in American history, whose contract ends in March, is in it for the long haul. “However the work continues, I’ll be a part of it.” HERE ARE excerpts from questions and answers on the CEJI Web site, www.web.net/~jubilee Why should these debts be cancelled? Between 1981 and 1997 the less developed countries paid over $2.9 trillion US in interest and principal payments (on debt servicing). This is about $1.5 trillion US more, or double, what they received in new loans. For every $1 that Northern countries provide in aid, over $3 comes back in debt servicing. Circumstances have changed dramatically since the original loans were made. Borrowers had no control over the skyrocketing interest rates and plummeting commodity prices which have pushed many of them to the brink of collapse. The costs of paying the debt have been primarily borne by ordinary people who had very little say in either borrowing or spending the money. How much would it cost to cancel the debts of the most severely indebted poor countries? There are three kinds of debt: commercial debt which is owed to banks and other private lenders, bilateral debt which is debt owed to countries and multilateral debt which is debt owed to international financial institutions such as the World Bank and International Monetary Fund. The commercial debt owed could easily be absorbed with little effect on the banks’ balance sheets. The World Bank and International Monetary Fund could easily write off outstanding loans to the poorest by drawing on their vast reserves, and in the case of the IMF, by selling off some of its gold. What will ensure that corrupt leaders do not siphon off the benefits of debt cancellation for themselves? There must be an internationally agreed mechanism for monitoring debt relief and making sure the benefits reach the most needy. This would be most effectively carried out by convening a conference under the auspices of the United Nations. Withholding debt cancellation will only penalize ordinary people, not the corrupt leaders. It is our responsibility to support the efforts of civic movements towards greater democracy, respect for human rights and transparency that will ensure that resources available from debt relief are used for genuine social development. In cases of countries known for their abuse of human rights and corrupt practices among government officials, our first step is to establish a dialogue with religious and civic groups within those countries. How can we help prevent this from happening again? Austerity and structural adjustment policies are currently imposed on indebted countries as a condition for new loans. These have only worsened the debt crisis. Debt relief and future lending must not be tied to the continued adherence to structural adjustment programs. A clearer set of rules and mechanisms for international borrowing and lending must be established where borrowers and lenders share responsibility and liability. CASE STUDY ZAMBIA At independence in 1964, Zambia had the third highest per capita income in Africa. Now it is among the continent’s lowest and is one of the most indebted nations in the world relative to its wealth. In 1964, Zambia was receiving high prices for its primary export, copper, and was able to import oil at relatively cheap prices. The government of Kenneth Kaunda invested in schools, clinics, hospitals and roads. By the 1970s, oil prices were rising dramatically, copper prices began to fall and Zambia faced military aggression from its neighbours. Zambia borrowed money to meet its oil and food needs as interest rates were increasing. In the 1980s it accepted loans from the World Bank and International Monetary Fund on the condition that it would restructure its economy. It began to do so, increasing interest rates, cutting public expenditures and devaluing its curency. Amid rising opposition, the Kaunda government abandoned the reforms. In 1991, a new government fully implemented a structural adjustment program. It sold off public enterprises, laid off workers, cut expenditures on health care, education and infrastructure. Today, just 27 per cent of the 8 million people in the country have access to safe water, there is one doctor for every 7,150 patients and 42 per cent of the population is not expected to survive to age 40. Eighty-six per cent live below the national poverty line. School fees have risen and many children can no longer afford to attend. Nor is there money to hire teachers or build schools. In one urban community 2,000 children applied to Grade 1 in 1994 but only 160 spots were vacant. Zambia’s external debt has risen from $654 million US in 1970 to $4 billion US in 1985, $6.3 billion US in 1995 and $7.1 billion US in 1998. From a fact sheet on Zambia produced by the Inter-Church Coalition on Africa.
