Jubilee 2000

September 1998

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The Jubilee 2000 campaign is a global campaign to convince lending nations to cancel the debts of the world's most impoverished countries. Petitions from around the world urging immediate action on this front will be presented to the world's economic leaders at the 1999 G-8 Summit in Germany.

Religious organizations around the world are calling for debt cancellation as the most important moral imperative of our time. Billions of people are enslaved by international debts which continue to grow and which can never be repaid. Struggling nations are forced to cut essential spending on health and education in order to meet debt payments. The Jubilee 2000 campaign challenges us to respond to the hunger, sickness, poverty and ecological degradation that result from exorbitant transfers of wealth from the poorest nations to the rich.

Origins of the Debt
The mountain of debt now borne by poor nations began to accumulate in the 1970s. At that time, a surplus of money on deposit led banks and other lenders to encourage nations to borrow with little regard to how the monies would be spent. Often, loans were given knowingly to corrupt governments and dictators. Ordinary people had no say in how the loans would be used. Some of the money loaned went to buy weapons and to build up military and police forces often used to oppress the poor and voices for freedom and democracy. Some of the money loaned was siphoned off into the pockets of corrupt officials.

In the 1980's, interest rates skyrocketed while prices for the export goods of these poor nations fell dramatically. As unpaid interest accumulated, their loans became unmanageable, indeed, unpayable. Between 1981 and 1997, the poorer nations paid over US$2.9 trillion in interest and principal payments – many times more than the US$568 billion they owed in 1980 – yet their total debt now stands at US$2 trillion.

This means that there is now a huge and continuous net transfer of wealth from the poor nations to the rich. Far more money is paid out to creditors than is received from other sources such as foreign aid. In 1996, for example, the poorer nations paid US$245 billion to creditor nations but received only US$58 billion in development assistance.

What is Structural Adjustment?
While the responsibility for the debt lies largely with both lending institutions and corrupt governments, it is the poor who have been forced to bear most of the debt burden. In response to the debt crisis, institutions like the International Monetary Fund and World Bank imposed stringent austerity measures on poorer nations as a condition for new loans (most of which were used to pay interest on existing loans). These measures ("structural adjustment programmes") have only worsened the debt crisis by forcing nations to focus on production for export while cutting essential services such as health and education, and opening markets to cheaper imports. This in turn has led to higher unemployment, increasing poverty, a widening gap between rich and poor, and ecological degradation.

We do not expect people to sacrifice the health and education of their children to continue paying their debts. And yet millions of children in the poorest nations die each year of poverty-related causes while their governments are forced to make payments to rich countries and other creditors. Women are also forced to bear an unfair burden of the debt crisis since it is they who are expected to make up for the loss of government services in health and education through unpaid work.

A Question of Justice
It is clear that the cancellation of the debt of the world's poorest nations is a question of justice, not charity. It is immoral to force the poor to pay loans from which they received little or no benefit. It is immoral to force those with few resources to carry a burden generated by usurious interest rates. The poor of the world need and deserve a fresh start, a generous new beginning such as that envisioned by the Biblical tradition of Jubilee.

The World Bank and International Monetary Fund have announced plans to reduce the debt obligations of some of the poorest countries, but their initiative falls far short of what these countries need in order to make a fresh start. Their plan, known as the HIPC (Highly Indebted Poor Countries) Initiative will ensure that these countries keep on paying as much debt as they can bear while continuing to force them to adopt severe economic and social measures. In fact, a recent agreement reached in this plan with the world's poorest nation, Mozambique, actually means that it will pay more in debt payments this year than the last while future payments will fall only slightly.

In contrast, the Jubilee 2000 campaign calls for the complete elimination of the debt of the world's poorest nations. Approximately 45 countries would be eligible based on a criteria of high levels of poverty and debt servicing (amount spent on debt payments) and low spending on health and education.

The cost of canceling the debt of these nations is relatively small. Private banks could absorb the share owed to them given the huge profits they have accumulated in recent years. The Canadian government is currently owed about CDN$1.2 billion by the poorest nations, but the actual cost of writing off this debt would actually be considerably lower. The World Bank and International Monetary Fund (IMF) could write off outstanding loans to the poorest by drawing on their vast reserves, and in the case of the IMF, by selling some of its gold.

The Jubilee 2000 campaign envisions giving debtor countries a fresh start towards genuine social, economic, and ecological revitalization. Debt relief and future loans would therefore not be tied to the continued adherence to structural adjustment programmes. As well, a clearer set of rules and mechanisms for international borrowing and lending would be established where borrowers and lenders share responsibility and liability. The poor must not shoulder the burden of risk for the mistakes of others.

After the completion of this first phase aimed at eliminating the debts of the poorest, most highly indebted nations, we will need to broaden our effort to include other nations whose situation is only slightly less serious. New mechanisms must be put in place which will enable all poor nations to work for the timely elimination of their debts without having to endanger the health and well-being of the poor and of ecosystems.

Launching the Debt Campaign
On Sunday, September 27, the Jubilee 2000 Campaign will be launched in churches across Canada. This date roughly coincides with Yom Kippur – the Jewish day of atonement that traditionally marked the start of the Jubilee year – which begins this year on the evening of September 29.

The launch of the Jubilee 2000 campaign provides a wonderful opportunity for local parishes and church congregations to focus their Sunday celebration on Jubilee and on the campaign to cancel the debts of the world's poorest nations. Try to obtain as many signatures as possible for the debt petition (using the copy included here for duplication) and meet to organize how to educate and gather signatures in the wider community. Now is the time for action! Use this opportunity to educate others about this problem and prepare them for follow-up actions aimed at addressing the needs of a broader group of nations which also suffer an intolerable burden of debt.

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