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Introduction to Debt Issues |
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God's laws for the people of Israel included provision for Jubilee, a re-balancing of society at fifty year intervals that prevented over-accumulation on the one hand and abject poverty on the other. By contrast, the debt crisis consigns many countries and their citizens to cycles of disadvantage . . .more >> |
The very name of the Jubilee campaigns indicates their Biblical roots, and many of the debt campaigns have Christian groups as founder members. So worship resources abound in this area. . . . more>> |
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| Campaigns around Debt Issues | What Can I Do? | |||
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The Jubilee 2000 campaign engaged millions of Christians. Find out about that campaign's UK successors and other debt campaigns -- all of which are still working towards forgiveness of unfair and unpayable debt for developing countries. more>> |
Commit to prayer on debt issues? Send an email about illegitimate debt from the Jubilee Debt Campaign site? Write a letter to your local newspaper? Lots of action suggestions for you and your church. more>> |
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| Resources | More Information | |||
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From studies of the impact of debt on individual countries to discussions of the G8 initiatives more>> |
Where to find more information about debt and debt relief more >> |
For several decades, the crisis of developing country debt has been a cause of crippling poverty for many of the poorest countries and people in the world. As of the end of 2005, developing countries owed around $2.8 trillion in foreign debts, and the low income countries were paying about $118 million in debt service a day. In many countries, the amounts paid in debt service dwarfed governmental education and health budgets. As a consequence, millions of people were denied access to schooling or to even the most basic health services.
The debt crisis resulted from a variety of factors. In the early 1970s, a flood of "petro-dollars" made financial institutions eager to lend. The loans -- both from banks and through sovereign governments, the World Bank and IMF -- were often characterised by a lack of concern about the nature of the borrowers (ie whether they were democratic sovereign states or dictators), how the money would actually be used, and whether the borrowers had a reasonable capacity to repay. Indeed, all too often lending by governments was designed to promote markets for their goods abroad, or, during the Cold War, was based on political considerations. The World Bank, for example, loaned large sums to Mobutu Seseko of Zaire -- a dictator who was perceived as a bulwark against communism -- despite the explicit advice of their adviser.
Developing-country governments, meanwhile, borrowed at floating interest rates on the assumption that they would soon be able to repay -- but found that their exports were declining, interest rates were rising sharply, and the dollar, the currency of repayment, was increasing in value relative to their currencies. Particularly when this combined with slow growth in their own economies -- often due largely to the crisis in commodity prices, though governments' economic policies (as in developed countries!) also sometimes played a role-- the debt mountains quickly became unsustainable. The result was that in some of the poorest countries of the world, large sums that were critically needed for human development were, instead, going to repay wealthy countries' governments, the International Financial Institutions (World Bank and IMF), and commercial lenders.
For this reason, starting in the 1980s, there began to be calls for debt cancellation. Then, in the 1990s, as John Goldingay put it "Somebody saw that the Jubilee vision in Leviticus 25 pointed to the cancelling of punitive Third World debts to Western banks and governments, and this caught the imagination of millions of believers and others." The Jubilee campaigns -- in which Churches played a major role -- were large, effective, and bold in their calls.
Initial responses by governments and financial institutions were limited. After various piecemeal initiatives in the 1980s and 1990s, in 1996, major creditors responded to the campaigns and concerns by proposing the HIPC (Heavily Indebted Poor Countries) initiative, designed to reduce the debt burden of some of the poorest countries to "sustainable" levels, with sustainability determined by a ratio of debt stock to exports. The benefits to poor countries of this initiative, however, proved small and slow, and in 1999, the "enhanced HIPC initiative" was created.
Even an enhanced HIPC, however, had many failings. One of these was the often harsh economic policy conditions which the IMF and World Bank imposed on poor countries: in order to stay "on track" with the World Bank and IMF, countries had to adopt the policies they recommended, whether or not they were the policies the countries' governments would actually have chosen. Many of these policies -- including privatisation of resources and services and trade liberalisation -- are controversial. In Zambia, for example, the consequence of trade liberalisation was the destruction of the greater part of Zambian industry.
Another primary problem with HIPC was the fact that it offered debt relief and defined "debt sustainability" in terms relating to what a country could possibly pay its creditors, rather than in terms of what that country needed in order to be able to meet the basic development needs of its citizens. The Jubilee vision, as seen in Leviticus, is not that the poor should limp along, forever poor, paying all they can. It is a vision of a new start -- a release and chance to begin again. For several years, therefore, campaigners have been arguing that countries that need 100% debt relief to meet the Millennium Development Goals, and are prepared to use the funds released by 100% debt relief for human development, should receive it.
As Saul Banda, coordinator of the Lusaka-based Jesuit Centre for Theological Reflection's Provincial Outreach Programme, put it in 2006: “Jubilee Zambia has been campaigning for unconditional and total cancellation of Zambia's and other Low Income Countries' external debts for the last eight years. This was after the realization among campaigners world-wide that external debts were blocking development in the Third World, because resources meant for investment in the social sectors (particularly health and education) and for infrastructural development were being spent on servicing external debts." Banda notes: “At the end of 2004, Zambia's external debt stood at US $7. billion with annual debt service payments of between $150 million and $200 million and accounted for as high as 10% of Gross Domestic Product; health and education accounted for only 2% and 3% respectively."
In recent years, in large part thanks to the efforts of campaigners, the once unthinkable concept of "100% debt relief" has become part of the political landscape. And in 2005, at Gleneagles, the G8 proposed 100% cancellation of World Bank, IMF and African Development Bank debt for countries that reached the HIPC Completion Point. This was a triumph for campaigners -- and for people in developing countries. Thanks to debt relief from the Multilateral Debt Relief Initiative (MDRI), Zambia is employing 4,500 more teachers and has abolished fees for medical care in rural areas. That makes a real difference in terms of lives saved and enriched.
But problems remain. The MDRI still pertains to only a relatively small number of countries; many more need the benefits that relief on their IMF and World Bank debts would offer. The MDRI deals only with debts to the World Bank, IMF, African Development Bank and, as of 2007, Inter-American Development Bank; it doesn't cover debts from the Asian Development Bank or various other lenders. And MDRI relief still comes with harmful conditionalities -- economic policy conditions that countries have to fulfill in order to stay "on track" with the World Bank and IMF. Indeed, generally speaking, the MDRI isn't fully transparent, and the determination of who qualifies and how the process operates still rests almost entirely with a small group of creditors. And no multilateral organisations, and almost no sovereign states and other creditors, are yet willing to take responsibility for their own part in creating the crisis through irresponsible or unfair loans.
So, rejoicing in what has been achieved, the debt campaigns continue to campaign for a true vision of Jubilee. Today their focus is on:
What keeps Christian debt campaigners going? The knowledge that millions of people -- many of them brothers and sisters in Christ -- are suffering and dying because of the effects of debt. The victories that show change can happen -- including the most recent actions by Norway, which has become the first country to renounce an illegitimate debt owed to it. And the theological truths that we are called as Christians to work for love and justice and that, as the Reverend Caroline Dick stated in a Church of England General Synod debate in 2001: our “act of witness for debt relief . . . reveals . . . the God of justice, of love and of peace at work in our world now.”
The very name of the Jubilee campaigns indicates their Biblical origins, and many have Christian groups as founders or core members -- so worship materials in this area abound.
Prayer
Online Resources
God grant me your Spirit . . . .
That I may rest and work in the vision of a new future
Where all are linked by the bonds of humanity,
Not enslaved by the chains of debt.
Extract from "Grant me your spirit," a World Debt Day prayer by Linda Jones of CAFOD
Prayer on debt issues is appropriate at any time -- but especially on or around World Debt Day, celebrated in the UK on 16 May, the anniversary of the Birmingham G8 chain. "Grant me your spirit," a prayer for World Debt Day, can be found in full on the JDC worship resources page.
The JDC worship resources page also contains "Jubilee Worship," a compendium which includes
Another JDC worship resource is a prayer pilgrimage called "Praying in Public Places: A Pilgrimage for Our Time ," put together by JDC Board member Merryn Hellier. "Praying in Public" invites Christians to walk to local places such as hospitals or surgeries, schools and banks to reflect on and pray about debt and the impact that it has on people's access to essential services. A very powerful service -- and act of witness.
Some of the materials on the JDC's worship resources page originally come from Jubilee USA, which published in 2005 its "Jubilee Congregations Handbook." This resource offered at the time everything a [US] church needed to engage with the campaign -- background information, stories about the impact of debt and debt relief, pages explaining the links between debt and other global issues, worship material (including a Roman Catholic liturgy for debt), Bible studies and more. The fact that it was written before the Multilateral Debt Relief Initiative means that some of its background information is now outdated. But the liturgical material and Bible studies remain very helpful.
CAFOD offers a variety of prayers on debt relief.
Preaching
Online Resources
The Jubilee Congregations Handbook contains several suggested sermons, as well as theological reflections designed to inspire sermons. A sermon contributed by by David Golding is also on the JDC worship resources page.
Another invaluable resource is the linked lectionary entitled "Development Matters ," compiled quarterly by Dr. Elizabeth Perry and available on the Diocese of Bath and Wells' website. This resource takes the main lectionary readings for each week and links them with global-justice issues, providing facts, illustrations and quotes that preachers can use in their sermons. There are many illustrations concerning debt, and because the resource is created afresh each quarter, the examples are up to date.
Do you remember the Birmingham Chain in 1998? The sense of excitement as churches and other groups began to recognise that their petitions and postcards were making a difference? The moment when governments and international institutions began to talk about 100% debt relief as a goal?
Campaigning on debt is one of the signal successes of the last decade. The job is far from done and dusted -- what debt cancellation is available is still offered to too few countries, covers too few forms of debt, and comes with too many conditions attached. But if anyone had said fifteen years ago that 100% debt relief would have been offered by any of the international financial institutions to any developing country, they would have been dismissed as dreamers. Jubilee 2000 and the international Jubilee campaigns helped to change the landscape of debate. As Jubilee 2000's final report said "The World Will Never Be the Same Again."
Jubilee 2000's successor campaign, Jubilee Debt Campaign, continues to call for 100% cancellation -- by fair and transparent means -- of unfair and unpayable developing country debts. Organised as a coalition of local/regional groups and national organisations, including CAFOD, Christian Aid, the United Reformed Church and World Vision, Jubilee Debt Campaign focuses its campaigning and advocacy work on UK Government policy, both internal and with respect to the International Financial Institutions (the World Bank and IMF). JDC works in partnership with two other UK-based successors to Jubilee 2000 -- Jubilee Research@nef and Jubilee Scotland -- as well as with other northern and southern debt-related campaigns.
You can find out more about JDC's goals by reading their vision statement "Breaking the Chains," sign up on their website to receive briefings and campaign materials, locate the JDC group nearest you via their listing of groups in the Southeast region), or find out how to become a Jubilee Congregation
NEWSFLASH: JDC now has two ongoing campaigns. The newest is called "Pick up the Pace" It asks the UK government to
1. Deliver the UK multilateral debt relief scheme to all of the poorest countries.
2. Cancel all developing countries' unpayable and unjust debts, including export credit debts.
3. Use the UK's influence to persuade other rich countries, companies and institutions to cancel all unpayable and unjust poor country debts.
Postcards and a petition are available to support this campaign. You can find out more at the "Pick up the Pace" page on the JDC website.
The second campaign on unjust debts -- debts which are illegitimate because they were incurred by dictatorships, used for purposes of oppression (for example, Indonesians are paying the UK £300 million for weapons Suharto used against them) or were granted under unfair terms. For more information, go to the Lift the Lid pages on the JDC website.
JDC's website also has a comprehensive listing of other northern and southern campaigns around debt and economic justice. The Northern campaigns include:
The Southern campaigns include:
Some Suggestions for Personal Action
Do you have other examples of personal action? Email us at maranda@ccow.org.uk and let us know!
Raising Awareness
If your church is new to debt issues -- or if it participated in Jubilee 2000 but thinks that the issue is now resolved -- it might be good to raise awareness of what the ongoing issues are, perhaps through
You can find the resources for all of these in our praying and preaching section or by contacting CCOW or JDC. The prayer page also has a link to Merryn Hellier's "Praying in Public Places," a prayer walk in which church groups visit local surgeries or hospitals, schools and other locations to reflect on and pray about the impacts of debt on people in developing countries. It's a powerful service -- and act of witness.
Jubilee Congregations
If your church is ready to make a commitment to ongoing prayer and action on debt, consider becoming a Jubilee Congregation. Jubilee Congregations agree to "affirm the aims of the Jubilee Debt Campaign in their work to free poor people and countries from the burden of unjust and unpayable debt, pray for justice for the world’s poorest communities, provide a contact person to facilitate education and action on debt, make an appropriate annual donation for the work of the Jubilee Debt Campaign, and take at least one action a year on debt as a congregation." In return, the Jubilee Debt Campaign undertakes to resource the church by sending an action pack and certificate, news updates four to six times a year, and information about worship materials on the JDC website. You can find out more and sign up at the JDC website page on Jubilee Congregations.
Focusing on the Impact of Debt on Partnership Links
Whatever you do, if your church has partnership links with an area that is affected by debt, it may be particularly effective to focus on what is happening in that area. For example:
CCOW also has a more recent piece about debt, the results of debt relief, and the continuing problems with trade that was written by Saul Banda from Jubilee Zambia; portions of this were excerpted in the church materials for Stand Up Against Poverty, and you can receive the full text from CCOW.
Contact CCOW if your church has a link with a particular area and you would like information about debt in that area.
This is a selective list. More resources can be found via ELDIS and through the Choike "external debt" page as well as from individual agencies and coalitions.
Basic Introductions to Debt Issues
"The World Can't Wait for Debt Cancellation" is an accessible powerpoint presentation that reflects the status quo as of 2007.
"Top Line" information about the G8 debt deal and its implementation through 2007 (Eurodad, 2007), an accessible 2 page pdf giving a fine overview of the basics, is also a good entrance point to the present situation.
There is also a lot of good introductory material in "Jubilee Worship" and the Jubilee Congregations Handbook (see below) -- all of it compiled with specific reference to churches. Like the accessible and thorough "Rough Guide to Debt," (CAFOD, 2002) however, much of it doesn't reflect the most recent realities.
Theological and Worship Resources
Church Statements Online
The MDRI
World Bank and IMF Conditionality
Debt and the MDGs
Debt and Particular Regions/Countries
If not now, when? JDC and All Party Parliamentary Group on HIPCs, 2005 -- recommends debt relief as necessary for a strong, prospeous Africa
A Case for Debt Relief for Kenya (Justice and Peace Commission, St Paul's Church, Nairobi University, 2005) -- argues that Kenya's debt burden should be relieved as much of it is illegitimate, it is a major factor promoting dependence and impeding development, and most of the burden relates to interest not principal
Zambia after the HIPC "Surgery" and the Completion Point (Jesuit Centre for Theological Reflection, 2006 ) -- A clear overview of the impact of the HIPC and MDRI on Zambia that also makes recommendations on the process for further debt cancellation and on the Zambian government's strategy for contracting new loans.
Comments from Antonio Gumende, Mozambique's High Commissioner to the UK (2005) -- brief statement of impact of debt relief on Mozambique
Governance
How to fit 27 elephants in a single chair (Eurodad, 2007) -- Suggests progressive positions European governments might take on reform at the World Bank and IMF.
Debt Sustainability, Transparency of Process and New Lending
Repudiation and other options
The Repudiation Option: Southern Government Debt Strategies (Christian Aid, 2007 ) -- argues that Southern governments should refuse to pay their debts in order to free resources for pro-poor human development
Debt Campaigning
A Timeline in Reports
Debt is unusual among the issues that we cover in that there has actually been a fair amount of change over the past decade. The section below, therefore, offers some "historical" background to the more recent papers above, showing "where we have come from" . . . and where the current plans and programmes reflect (or in the case of governance, conditionality, and transparency of process, have yet to reflect) the proposals put forward in the Jubilee campaigns.
2005
Do the Deal. The G7 Must Act Now to Cancel Poor Country Debts (Action Aid UK, CAFOD, Oxfam GB, Feb 2005) -- a paper submitted before the G7 finance ministers meeting, setting out the case for debt relief and making recommendations for how it should be accomplished.
2004
Fool's Gold: The Case for 100% Multilateral Debt Cancellation for the Poorest Countries (Action Aid UK, CAFOD, Oxfam GB, 2004) -- a good summary of the case for debt relief, looking in depth at five specific reasons for debt cancellation, exploring sources for financing debt relief, and calling for an end to harmful conditionalities.
2003
Did the G8 Drop the Debt? (Jubilee Research, CAFOD, JDC) -- an analysis of what had happened in the five years since the Birmingham chain, and what needed yet to be done
2002
A Joint Submission to the World Bank and IMF Review of HIPC and Debt Sustainability (CAFOD, Christian Aid, Oxfam GB, Eurodad, 2002) -- wide-ranging discussion of debt issues as they then stood
2001
From Debt to Poverty Eradication: What Role for Poverty Reduction Strategies? (CIDSE-Caritas, 2001) -- a lengthy (but with a good summary) paper analysing the strengths and weaknesses of the PRSP from the perspective of Catholic social teaching.
2000
Still Waiting: Time for a New Deal on Third World Debt (Christian Aid, 2000)
1999
Beyond Cologne, Towards Jubilee (CIDSE-Caritas, 1999) -- The Catholic agencies' clear, succinct (4 pg) response to the Cologne G8 initiatives.
Campaigning Groups
The Jubilee Debt Campaign website offers information about the latest issues and events, including a newslettercountry reports -- at present these cover Haiti, Indonesia, Kenya and Liberia. page, worship resources, and reports. JDC is also building a series of
Many Christian and secular agencies who were and are part of the Jubilee coalitions have their own websites with materials on debt. Some of the most well-resourced are:
The Eurodad website offers brief overviews of key areas (the debt situation as a whole, multilateral debt, bilateral debt, illegitimate debt, debt sustainability etc) . . . but is unusually helpful in that at the end of the brief articles, you get a list of the most recent news items on that particular area, coupled with a list of the latest reports on general and specific topics. If you want to keep up to date on debt and aid, you can also subscribe on the website to Eurodad's e-newsletters, which provide up-to-date news and analysis on these issues. Eurodad also has a list of its members with links to their websites, so that you can find out more about what is happening in other countries.
Jubilee USA Network is a good source of up-to-date news on the latest developments in debt and debt campaigning. The network also has a wide variety of resources, and is particularly strong on resources for churches.
The website for Afrodad, the African Forum and Network on Debt and Development, offers many resources, including recent articles from various media about current debt issues and some publications on illegitimate debt in the DRC and Malawi. Please note, however, that many areas of the site are not accessible even to the registered user.
Jubilee South, a network of 85 anti-debt groups from over 40 countries in the Africa, Asia/Pacific, and Latin American regions, has a website which contains numerous resources from member groups on privatisation and conditionality, illegitimate debt and ecological debt, in which the South are the creditors. In addition, if you read Spanish and want to get a really good sense of where the Latin American campaigns are going, go to the Jubileo-Sur email archives.
Jubilee Zambia's website contains many country-specific resources showing the impact of debt in that country. If you are looking for up-to-date resources, however, they are not as helpful, as they are all pre-2006 and hence do not take into account the G8 debt relief programme.
The Bretton Woods Project, offers a critique of the International Financial Institutions and includes up-to-the-minute news and analysis of their actions.
Government and IFI Resources
The World Bank's Economic Policy and Debt page offers links to the large number of materials that document the Bank's involvement with debt issues. Resources range from an overview of debt relief in general, a fact sheet on the Multilateral Debt Relief Initiative and the "HIPC at a Glance Guide" to full volumes on how recommendations are implemented and the implications for various countries.
The IMF's resources include a fact sheet on HIPCs which has links to publications, including "Can Debt Relief Boost Growth in Poor Countries" (while some would take issue with aspects of this paper, it points out quite clearly that debt relief can boost growth, and that debt servicing discourages public investment -- not surprising, but handy to have the confirmation from the IMF itself) and country documents for HIPC.
The UK Government's work on debt relief can be accessed on a very clear and full page on the Treasury website entitled Debt Relief for Poverty Reduction and through DFID.
Databases, Think Tanks and More . . . .
If you're looking for comprehensive coverage of a particular area, such as debt relief for a particular country, try ELDIS, the University of Sussex's magnificent database of reports from around the world on development issues. You can also sign up for ELDIS's "Aid and Debt Reporter," an email newsletter with summaries of reports in the area.
Choike, a "portal on Southern civil societies" has an "external debt" page with links to organisations, reports and resources. The focus of the coverage is on institutions themselves (IFIs, etc) and both Northern and Southern campaigns and coalitions.
Jubilee Research at nef has a very valuable archive, as well as good short articles and responses to current stories and issues.
Debt isn't one of the primary foci of the Overseas Development Institute's work, but their panel evaluating the HIPC initiative (July 2006) raises many key issues and has an interesting mix of panelists from the World Bank, Jubilee Debt Campaign, and the academy. Audio and powerpoints from the meeting are available on the website.