The debt offensive

Examining debt as the cause of global injustices



Editor’s Note: This is the second in a series of articles about speakers to be featured at the upcoming Global Justice Action Summit in Missoula June 20–24.

Forget that impoverished countries turn to deforestation, overgrazing, and dam building in desperate attempts to “develop” their own economies.

Forget that fair trade becomes lopsided when third world countries cannot afford to buy manufactured goods yet provide the cheap labor and resources necessary to make them.

Don’t mention that when the economies of those nations fail, selling narcotics to the first world becomes a more and more attractive way to earn foreign cash. Or that when accumulated interest dwarfs the original loan, banks claim losses while money continues to flow from the poor to the rich.

And finally, ignore the role that poverty plays in corruption, human rights abuses, violence, and war.

For Njoki Njoroge Njehu, director of the nonprofit group “50 Years is Enough,” the reason to cancel global debt cannot be found in rational arguments about what is best for the world at large, but within a simple philosophy.

“It’s not about charity,” Njoki says. “It’s not about self-interest. It’s about justice.”

Or perhaps the reason can be found in a simple theology, as noted by Marie Clarke, national coordinator of Jubilee USA, another nonprofit group dedicated to the cancellation of third world debt.

The name Jubilee comes from a passage in Leviticus which proclaims that debts are to be erased and land redistributed every 50 years: “It shall be a jubilee for you; each one of you is to return to his family property and each to his own clan.”

“It’s about shaking up the world periodically,” says Clarke. Both women are scheduled to speak at the Global Justice Action Summit in Missoula June 20–24 just before members of the most wealthy nations of the world meet in a secluded alpine retreat in Alberta for the G-8 Summit.

The strategy, according to Njehu, is to persuade the citizens of the wealthiest countries to use their proportional strength with the World Bank and International Monetary Fund (IMF) to change international lending and development policy.

“If people in the G7 countries knew what was going on, they would demand changes and deal with this problem once and for all,” says Njehu. “People understand the role of the government, to protect the weakest.”

The primary problem with the amount of debt owed by the poorest countries to the richest, says Njehu, is that it overwhelms government spending in countries like Argentina, which owes some $120 billion. Funds for education and health care, for instance, must be diverted to loan payments, which do nothing to improve their citizens’ quality of life or break the cycle of debt.

In addition to debt cancellation, both 50 Years is Enough and Jubilee call for an end to so-called Structural Adjustment Programs, which demand that countries open their markets to the global economy in order to earn hard currency and pay off their loans. But opening their markets usually means whole industries are sold off to foreign investors.

“So the profits and resources are funneled out of the country,” Clarke says. “It’s colonialism.”

Fifty Years is Enough was founded in 1994 on the 50th anniversary of the founding of the World Bank and the IMF. At that time, the debt carried by developing countries had doubled since the introduction of Structural Adjustment Programs in the early 1980s, and many people were beginning to recognize a global financial crisis in the often overlooked southern hemisphere.

“The institutions were really blowing their own horn about how great they were for the poor,” Njehu says.

Not surprisingly, the poor disagreed. In sub-Saharan Africa, for example, the debt burden had increased 400 percent and countries like Uganda found themselves paying $17 to first-world banks for every $3 spent on health care for their citizens, a bad arrangement made tragic when combined with that nation’s AIDS epidemic.

“That was a story people wanted to tell,” says Njehu, who grew up in a small village in rural Kenya on a farm as the eldest child of six. Njehu’s mother, prodded into politics by her own mother’s insistence on an education, sent her daughter to the meetings of local activist women, where discussions ranged from women’s issues to ecology to the production and marketing of handicrafts.

“I don’t know what else I could have been,” Njehu says. “And I got a great education.”

Still farming, Njehu’s mother continues to be active in local and international politics. Recently Njehu joined her mother in Haiti, where they engaged in globalization of sorts on a person-to-person level. With women from all over the world, they discussed how the landless poor can stabilize their personal food supply by growing vegetables in whatever space is available, even in bags of soil and manure propped against a house.

“You hear about the North teaching the South, but you don’t hear about the South teaching the South,” Njehu says.

Jubilee was founded in 1997 as Jubilee 2000/USA, a campaign to get industrialized nations to cancel their debt to developing nations for the millennium. The millennium came and went and Congress cancelled some $34 billion in outstanding loans. One consequence, for example, was that school enrollment in Tanzania and Honduras went up. However, the underlying mechanism of debt was left in place. So Jubilee 2000 USA became the Jubilee USA Network and the work went on.

One important step in correcting the problem will be balancing the power relationship between countries that need money and those that have money and set the terms of the loans, says Clarke. To do this, the language of global debt must be reexamined.

For instance, Jubilee and 50 Years is Enough insist on using the phrase “debt cancellation.” Using the word “forgiveness” implies an act charity extended by the First World. Or worse, says Clarke, it connotes a sin has been committed by the Third World.

“We begin to question the basic legitimacy of the debt,” Clarke says. “We have to ask, who really owes whom here?”


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