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A Global Year of Jubilee? By Summer Killian We are moving toward a transnational, global economy at this moment, near the end of the 20th century. Nations have come to rely on each each other financially, militarily and politically. A number of years ago more powerful countries began to loan money by the millions to less developed countries, in hopes of strengthening economic ties with them and thereby influencing them in a number of ways. Because many of the nations seemed to have resources such as oil or forests which were improving their economies, both the World Bank and creditor nations were not especially picky about the terms of the loans; the money would somehow come back to them. It could be repaid through the success of national industry or through the better education and health that would surely be a result of more money flowing within these poorer nations. That was in the 1970s, and it seemed like a decent idea. Then came greater economic distress in the 80s, when even the United States began to borrow money for various projects--among them, military strengthening. So when all lending money ended up coming back into the U.S., interest rates all over the world rose dramatically, and the nations who had borrowed money just a few years earlier were now in more serious financial trouble than ever before. . What of these countries? And why is it that we rarely hear of the state of affairs in these nations? The economies of developed nations continue to expand while those of the debtor nations are waning, if not destroyed. Something must be done. And it is being done, slowly but surely. Enter Jubilee 2000 (J2000), an American campaign dedicated to the idea of totally relieving debtor nations of the millions of dollars of debt they have accumulated by the beginning of the new millenium. The brains behind the idea of J2000 recognized that debt relief programs enacted by the International Monetary Fund and the World Bank were working, but they were working too slowly and accomplishing too little. The programs set up by the IMF and the World Bank identified 40 "Highly Indebted Poor Countries" (HIPC), but only two countries of seven declared eligible for debt relief have recieved aid. In the meantime, the IMF and World Bank have declared that they will attempt to help 15 other countries by the year 2000. And the remaining nations must wait until there is money and time for them. How devastating for the 20 countries whose debt loads are "unsustainable" according to the standards of both international financial institutions. How much do these countries actually owe their creditors? The debt owed by the 40 HIPC countries averages about $220 billion. It sounds astronomical, but it is important to take into account the fact that all of the lesser developed nations together owe about $2.3 trillion to creditor nations, financial institutions, and private banks. Countries like Argentina, Mexico, and Brazil owe most of that money though, and they are middle income nations, nowhere near as poor as the HIPC. Considering that the $220 billion is really only about one-tenth of the total debt, it does not seem difficult to relieve the HIPC of the debts they have incurred. The HIPC encounter major problems when dealing with debt servicing, or interest. A brochure published by the Tompkins County J2000 Committee states that developing countries are paying more in debt servicing than they are receiving through both trade and aid. A net $418 billion was paid in debt servicing from the South to the North between 1982 and 1990. And consider this: for every dollar of aid received by Africa in 1996, Africa spent $1.31 in debt servicing. African governments are spending nearly four times more to repay creditors than they spend on education, health, and nutrition; in Mozambique one out of every four children dies before reaching the age of five, and there is no money for health care. One particularly stunning statistic tells us the following: "The cost of providing basic health care and nutrition of all people in developing countries could be achieved by spending an additional $13 billion annually, which is $4 billion less than what Americans and Europeans spend on pet food." Really? Really. Statistics like that let us know that perhaps ideas like J2000 aren't so outlandish. It is feasible to fill in the spaces created by these debts, and the creditors should understand that as well. Because J2000 is aimed at the U.S. government at the moment, let us consider this: the HIPC owe approximately $2.9 billion to the U.S., which is less than the U.S. has repeatedly dished out in aid to countries like Israel and Egypt. The Debt Relief for Poverty Reduction Act of 1999 has been formally introduced in Congress, and it directs the U.S. government to "write off" the debts owed by the poorest nations. Opponents of the legislation and of the project generally agree that the suffering of the people living in these nations should be relieved (and the only way to do so is to write off the debts), yet they remain skeptical--won't the funds be misused again once lending practices resume? One major problem was lack of planning by the creditor nations when the loans were made. These practices will have to be reformed in order to prevent this kind of chaos from happening again--but first the major problem must be attended to, before more people are deprived of food and health while their governments continue to lose power. One reason to advocate J2000 is that the people living in the debtor nations must now suffer, while in fact it was not these same citizens who reaped the benefit of the loans in the first place. Much of the money borrowed went to infrastructure--refining attempts and thoughtless investing. The governments' mistakes have people in many nations living in misery; they deserve some sort of relief. It is easy to live in comfortable America, where our debts seem to be the result of the manufacturing of new B-52 bombers which we need, of course, in mass quantity and our ceaseless generosity to other nations that should be on our side. But there really is no debt, we're told. Rather, it's a surplus! What on earth should we do with all this extra cash? Let's not look to funding the IMF for once. Programs there are not working. It might just be time for some old-fashioned kindness, for a true look at suffering and an understanding of misery and poverty that may be difficult and disheartening to imagine. Instead of setting up rules and regulations, and rates of interest and methods of repayment, Jubilee 2000 aims to help countries in need to avoid creating future chaos and further pitfalls. We're talking human rights here; it doesn't seem like too horrible a plan. Summer Killian is a junior sociology major at Ithaca College. |
