Daniel Thwaites
THE OVERALL progress of the Jubilee 2000 campaign for debt relief is far too slow and the results are so far unsatisfactory. It remains the case that the poor of the earth are being forced to cough up huge globs of money to subsidise First World economies. The history of this outrage is quite straightforward, granted a little simplification for ease of exposition and clarity.
During the 1970s, the OPEC oil cartel earned tons of money that it didn't know how to spend. The sheiks lodged their loot into banks in the developed countries that then went on lending sprees while governments in the Third World went on spending sprees. By the late 70s, skyrocketing interest rates in the United States pushed interest payments on Third World debt to dizzying heights, even as a worldwide recession decreased demand for their exports. Thus as the debt soared, the ability to pay tanked.
Into this unholy mess stepped multilateral institutions like the IMF and the World Bank, often making loans to countries that had the effect of bailing out the First World banks - making their bottom-line impervious to their imprudent or reckless lending - while leaving Third World countries in the lurch.
In the 1980s a massive silent bailout of banks like Chase and Citicorp (now Citigroup) was engineered, representing a transfer of wealth from the poor to the rich of some US$116 billion. Just recently there was the US$50 billion bailout of the likes of Merrill Lynch and Goldman Sachs in Mexico. More again was poured into Asia and Russia. It was the usual: socialism for the rich and capitalistic market-discipline for the poor. These transfers are part of why developing country debt to multilateral institutions rose from US$61.6 billion in 1980 to US$313 billion in 1994. Certainly by the mid-80s Reagan's unhelpful "generosity" to Mr. Seaga ensured that Jamaica had become seriously entangled and compromised by debt servicing.
For those of you with short memories, start with "The debt problem in Jamaica", edited by Dr. Omar Davies in 1986. Now when lender and debtor enter an agreement for mutual benefit, it is unjust that at the breakdown of that relationship the debtor should alone suffer the consequences. Furthermore, it is not merely unjust, but plain wicked when the costs to the debtor are to be paid by people who are essentially third parties to the initial deal. Yet this is what is happening when in 1995 Mozambique spent 3.3 per cent of its budget on health care but 33 per cent on debt service.
Here are some more figures that may be of interest: each year developing countries pay the West nine times more in debt repayments than they receive in grants. The African continent spends four times as much on debt repayment than it does on health care. Half of Africa's population - about 300 million people - live without access to basic health care or a safe water source. About one-fifth of the world's population lives on less than US$1 per day. There is a Heavily Indebted Poor Country initiative that has hardly been a success. Because as Jubilee 2000 campaigners point out, the process is far too slow, with only Uganda reaching "completion point" when debt is actually cancelled.
It is not deep enough, as countries will still be left with crushing debt burdens. It is not broad enough, as the criteria for relief is far too restrictive. In Pope John Paul II's words: "We have to ask why progress in resolving the debt problem is still so slow. Why so many hesitations? Why the difficulty in providing the funds needed even for the already agreed initiatives? It is the poor who pay the cost of the indecision and delay".
Bishop Desmond Tutu and the Archbishop of Canterbury, along with many other persons of conscience have made the call for fundamental change. We should also ask: Would the rich world be as cavalier about the poverty if it were white people suffering so? Are we to fool ourselves and think that historical relations of dominance and subservience between peoples and nations (Mr. Patterson's "past transgressions") have nothing to do with the current situation? At least the ordinary people, the wretched of the earth, would not believe that for a minute.
The debt crisis is but one gaping sore wound on an international system that enforces unacceptable levels of inequity between countries. It has been there for a long time, but until recently, the threat of communism stood like a policing shadow stalling serious reform of the international system. Now with the removal of that threat, it is time to re-launch serious initiatives for reforming and revolutionising the architecture of international finance.
After meltdowns in Mexico and Asia in '95 and '97 respectively, President Clinton and Tony Blair made comments about the inherent instability in the current system. The IMF and the World Bank have themselves recognised that serious reform is needed. Luckily these men and those institutions are not being advised by the reactionary dum-dums who pose as opinion leaders here who have vented their pent-up spleens because of some rather mild words (at least as reported) by P.J. Patterson in Cairo regarding this same business. Prime Minister Patterson should be criticised for not making these points frequently and trenchantly enough.
Instead it is the good people of America and Europe who are taking to the streets to protest the impoverishment that the multilateral rule-makers are imposing on the rest of the world. In all the circumstances, the slant of critique given to Mr. Patterson's speech by editorials and commentators, which is that criticism of the international system is useless rhetorical reminiscence from the 1970s strikes me as so much more banal bunkum from uninformed drivelling jackasses.
Daniel Thwaites is involved in teaching and writing.
