Jubilee 2000: Paying OUR Debts
by Robert Edgar
The Nation magazine, April 24, 2000
A massive natural disaster reminds us why people worldwide
have been engaged by the issue of debt relief. Mozambique, along
with several Southern African neighbors, faces years of reconstruction
in the wake of recent storms and floods that government officials
say did more damage than sixteen years of civil war. Although
Mozambique has been granted some debt relief in recent years,
when the storms struck it was still paying $1.4 million a week
in interest. Mozambique has been granted a temporary moratorium
on its debt payments, but it will still have to pay its creditors
back. It is due for additional debt relief in April, but this
may be delayed if Congress doesn't contribute.
The reality in highly indebted countries is grim. Half of
Africa's population-about 300 million people-live without access
to basic healthcare or a safe water source. In Tanzania, where
40 percent of the population dies before age 35, the government
spends nine times more on foreign debt payments than on healthcare.
In 1997, before Hurricane Mitch, Nicaragua spent more than half
its revenue on debt payments. Until recently, it has taken countries
in structural adjustment programs six or more years to get debt
relief. For lenders this seems like common sense-make sure the
country has its economic house in order before canceling debts-but
the human cost is tremendous. Six years is a child's entire elementary
school education. If governments are forced to cut subsidies for
public education and charge fees that make schooling too expensive
for the poor, it cheats a whole generation of children.
In contrast, in countries where some debt relief has already
been provided there is evidence of the potential benefits. For
example, Uganda established a Poverty Action Fund, into which
it pledged to deposit all the savings from debt relief. One goal
is achieving universal primary education. With the resources freed
from debt relief, combined with other sources, primary school
enrollment has more than doubled, to 5.3 million children since
Concern about the need to provide deeper and faster debt relief
gave rise to an international movement-under the banner of Jubilee
2000-to cancel the debt of the poorest countries by the end of
this year. Grounded in biblical mandates of jubilee calling for
the forgiveness of debt, the freeing of slaves and the return
of lands so as not to perpetuate generations of impoverishment,
this movement seeks to promote meaningful debt cancellation for
the world's poorest nations in order to reduce poverty and prevent
further environmental degradation. There are now Jubilee 2000
campaigns in more than sixty countries, creditor and debtor alike.
We in the faith community here in the United States have added
our voice to those of other religious leaders, including Pope
John Paul 11 and Bishop Desmond Tutu, who have eloquently stated
the principles being raised by their churches regarding the need
to set economic relations right. Almost all the major religious
bodies in the United States-including Catholic, Protestant, Jewish
and Muslim- are working together on this initiative. This commitment
crosses the spectrum: Even the Revs. Billy Graham and Pat Robertson
have endorsed the need to provide debt relief to poor countries.
Providing debt cancellation also makes good common sense.
For example, there is a direct relationship between the debt and
rampant deforestation, as governments sell off natural resources
and chop down forests to plant cash crops to earn foreign currency.
The drug trade is protected in many countries because it provides
valuable foreign currency for their interest payments. And the
United States is losing out on future markets of hundreds of millions
of people that so far remain unable to afford basic schooling,
much less to buy products made in America.
Jubilee 2000 has placed the issue of debt relief at the forefront
of the international development agenda. The human consequences
of poor countries' debt burden have become a moral concern for
millions of US citizens. Over the past two years, organizations
and individuals across the country have sought to address this
concern through study groups, worship services, local events,
petition campaigns, letters to the editor and contacts with public
officials. All this has brought the debt issue from almost total
obscurity to the level of a national crusade.
Because of this pressure, last summer in Cologne, Germany,
the leaders of the G-7 nations committed to expanding an existing
debt-relief measure and insuring a focus on poverty reduction.
President Clinton subsequently submitted a budget request to Congress
that would provide almost $1 billion for the US share. Congress
approved part of this request last November.
Creditors must take responsibility for being part of the cause
for this crisis. During the cold war our government and other
lenders loaned to many countries for purely political purposes.
Loans went to corrupt leaders for no clear development purpose.
Yes, debt relief comes at a cost to creditors, but perhaps this
is a debt we owe as well. Additionally, because the United States
expects to collect only a fraction of the value of the original
loan, the debts can be written off at a significant discount.
About $ I billion from the United States would leverage nearly
$-100 billion in debt relief for poor countries over the next
It's critically important that Congress appropriate more funding
for debt relief, and soon. There is not enough money in the World
Bank's Highly Indebted Poor Countries Trust Fund to cover the
countries eligible for debt relief this year. Several creditor
nations' pledges are contingent on the US contribution. In order
to make sure that indebted countries don't have to wait until
October 2000 to start getting relief, President Clinton has asked
Congress to include money for debt cancellation in its supplemental
budget. He has also included a request in the FY2001 budget to
cover the additional funds needed until FY2003. Approval of the
full $810 million could bring debt relief to as many as thirty-three
countries by 2003. The ideal would be both to expand this list
and to deepen the level of debt cancellation, but fulfilling the
commitments made in Cologne is a critical first step.
On March 30 the House passed a $12.7 billion emergency supplemental
appropriation with $7.7 billion more than the Administration requested.
It included funding for Colombian drug wars, Kosovo peacekeeping,
North Carolina flood relief and healthcare benefits for military
personnel, but not a dime for debt relief. It does not look like
debt relief will be in the Senate version, either. Some members
of Congress have tried to explain this by questioning whether
it is an emergency. Mozambique's condition certainly refutes that
Further distracting attention from debt relief is debate on
the Congressionally appointed Meltzer commission's recommendations
for major changes to the IMF, World Bank and regional development-banking
system. Congress's focus on reforming the international financial
architecture, while important, comes at the expense of attention
to debt relief. We would remind Congress that one of the commission's
few unanimous recommendations was that debt cancellation for the
world's poorest countries by all the international financial institutions
should be a priority. Eleven countries are expected to be eligible
for debt relief within the next two months, but they won't get
anything until Congress appropriates its share of the package.
The people who suffer the most from this delay are ~e most vulnerable
people in the world- the victims of devastating floods in Mozambique,
rural farmers in Uganda, schoolchildren in Bolivia.
The Rev. Dr. Robert W. Edgar is general secretary of the National
Council of Churches, New York. An ordained United Methodist elder,
he just concluded ten years as president of the Claremont School
of Theology in Claremont, California. He served Pennsylvania s
Seventh District in the US House of Representatives from 1975
Reforming the System