Freeing Poor Nations from $220B Burden Debt-Free in 2000?; Faith-Based Movement Calls for Relief. but Critics Warn Erasing Debt May Set the Wrong Example

By Jane Lampman, writer of The Christian Science Monitor | The Christian Science Monitor, December 23, 1998 | Go to article overview

Freeing Poor Nations from $220B Burden Debt-Free in 2000?; Faith-Based Movement Calls for Relief. but Critics Warn Erasing Debt May Set the Wrong Example


Jane Lampman, writer of The Christian Science Monitor, The Christian Science Monitor


A book of the Old Testament is inspiring a global grass-roots movement aimed at giving a fresh start to the world's most impoverished countries by the year 2000.

Taking its lead from the "year of jubilee" proclaimed in Leviticus, a coalition led by faith-based organizations - Jubilee 2000 - is now active in 45 nations pressing for cancellation of the poor nations' international debt.

"People are motivated and moved by the biblical roots of this campaign," says Carole Collins, US coordinator for the effort. "In the vision of Jubilee," says an Episcopal Church paper on the subject, every 50 years, "'right relationships' are restored, social inequalities are rectified, slaves are freed, and debts are canceled," in recognition of God as the provider of all. As disparities between rich and poor countries widen, social conditions in the poorest nations are deteriorating. The World Bank identifies 41 "heavily indebted poor countries" (HIPCs), and they are paying an average of 40 percent of revenues for debt service. Many are diverting scarce resources from education, health, and infrastructure programs, often with devastating consequences. Development aid, meanwhile, is at the lowest rate in a half century. The question is whether the Jubilee movement can persuade wealthy creditor nations to cancel the debt - or at least to offer "faster and deeper" relief than is available under current-debt reduction programs. Ninety percent of the approximately $220 billion debt is owed to individual governments and the multilateral institutions (World Bank and International Monetary Fund) where industrialized nations hold control. "We still have a year and a half and this campaign is really snowballing," says Justin Forsyth of Oxfam International, which is active in the coalition, "but we're a long way away from a huge breakthrough on this issue." Many in the movement are upbeat about prospects, both because of mushrooming grass-roots enthusiasm and what they see as a new international mood. They see the next six months leading up to the summit of the Group of 8 industrialized nations (G-8) in Cologne, Germany, next June as crucial. Calls for change Jubilee 2000 got its start in 1996 in Britain, where it mobilized 50,000 people for a show of support last May at the Birmingham G-8 summit. The British government's bid to spur changes on debt at that meeting was rebuffed, however - most vigorously by Germany. But a new center-left German government has since been elected, and its minister for international development in a recent interview indicated an intent to propose changes that would be presented at Cologne to speed and broaden relief. If this becomes official policy, it would be a significant shift. Germany and Japan have long opposed debt cancellation, says John Sewell, president of Overseas Development Council in Washington, and other countries aren't far behind. "There's an ingrained reluctance to forgive debt." Cancellation isn't in the interests of debtors, some say, because it would harm their capacity to borrow in the future. It could also pose a "moral hazard," rewarding cases of irresponsible management at the expense of others who have done a good job and creating expectations that future debts might be forgiven. Advocates say there's an element, too, of creditors wanting to maintain leverage over economic policies. "What we are trying to achieve," says a senior United States Treasury official, "is to reduce the debt to the point where the country can afford to service it and still have adequate capacity to grow in the future, yet get out from under the burden." There is a growing recognition that the situation is dire. In a meeting with Anglican bishops in July, World Bank President James Wolfensohn acknowledged that "we are losing the battle" against poverty, and that debt repayment was "a principal reason" social and other services cannot be provided in the poorest countries. …

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