Third-world debt relief gets boost

Protestors bent on confrontation with the World Bank and International Monetary Fund (IMF) grabbed global attention in Washington last month, but a less rowdy bunch had pushed their cause one week earlier. Several thousand members of Jubilee 2000 - a diverse but largely "middle-class, middle-aged group of churchgoers" - rallied and lobbied Congress and the financial institutions to cancel the debt owed by the world's poorest nations.

The bid to give a fresh start to those struggling countries - many of which spend more on debt service than on health or education - remains a long way from victory. But the three-year-old international grassroots movement and its allies see the momentum shifting in their favor.

In April, Germany, France, and Japan joined the other Group of Seven wealthy countries in promising "100 percent cancellation." There is some fine print, however, and promises don't always mean delivery. A bill that would cancel some of the debt owed the United States is stalled in the Congress. No promises have been made on debt owed to multilateral banks. But a commission set up by Congress to recommend US policy on the financial institutions has said they should "write in their entirety all claims against heavily indebted poor countries that implement an effective economic and social development strategy."

This week, as President Clinton proclaimed the AIDS crisis a threat to national security, Jubilee 2000 and Harvard University's Center for International Development (CID) gathered representatives of the World Bank and IMF, African countries, US Treasury, and NGOs to consider how to break the logjams that are delaying debt relief at the cost of tremendous suffering.

"The looming health crisis in Africa is the greatest crisis facing the world," says Jeffrey Sachs, director of CID. "People will look back in history and ask how we could sit for 10 years and let this situation develop." Dr. Sachs, who has served as economic adviser to Poland, Bolivia, and other nations, charges that the rich countries have "largely turned their backs on the world's poorest people." For the US to cancel its portions of the debt, he says, would cost each American only 60 cents a year for four years.

But before debt cancellation can occur, the Bank/IMF debt-relief program requires poor countries to go through a controversial set of economic hurdles set by the IMF, some of which worsen social conditions. In three years, only nine of 42 "heavily indebted nations" have gotten any benefit, and only one has completed the program.

Advocates are trying to modify the arduous process to speed relief to more countries and, given current crises, to find ways to skirt the process. Sachs proposes putting the countries' debt-service payments in a fund to be used immediately for health programs. At an April 25 summit, African heads of state committed themselves to "roll back malaria in Africa," and asked for help to strengthen their health systems.

Consensus has emerged that resources freed by debt relief should be directed to basic social needs and that civil-society groups in poor nations help design poverty-reduction strategies. Ann Pettifor, of Jubilee 2000 UK, further proposes developing an independent framework for arbitration of unpayable debts, so both debtors and creditors are disciplined, as in domestic bankruptcy cases. Creditors, she says, have promoted "addictive lending and borrowing habits."

(c) Copyright 2000. The Christian Science Publishing Society

About these ads
Sponsored Content by LockerDome

We want to hear, did we miss an angle we should have covered? Should we come back to this topic? Or just give us a rating for this story. We want to hear from you.

Loading...

Loading...

Loading...

Save for later

Save
Cancel

Saved ( of items)

This item has been saved to read later from any device.
Access saved items through your user name at the top of the page.

View Saved Items

OK

Failed to save

You reached the limit of 20 saved items.
Please visit following link to manage you saved items.

View Saved Items

OK

Failed to save

You have already saved this item.

View Saved Items

OK