In the wake of the “debt crisis” of the early 1980s, creditor institutions put Third World debtors through a series of debt workouts and economic adjustments so draconic that by the early 1990s, debt service had replaced economic development as a Southern budgetary priority. The developed world’s “crisis” of nonrepayment quickly abated, and the debt crisis disappeared from view—for the creditors. Two years ago, frustrated Latin American Parliamentarians, concerned that their countries’ enormous debt-service obligations were crippling their attempts to develop, met in Caracas to map out ways of putting the issue back on the global agenda. But while their efforts succeeded in mobilizing a great deal of grassroots support, they were largely ignored by international media and, even in their own countries, given scant coverage.[1]
Now, in a rapid-fire change of fortune, a well-funded campaign by a coalition of religious organizations coming from North and South alike seems to be succeeding where the parliamentarians failed. Using its church-based legitimacy to gain the ear of policymakers and “opinion leaders,” the campaign has brought the issue of debt relief—at least for the very poorest countries—once again up for serious discussion. The coalition, evoking a biblical injuction of debt forgiveness, calls itself Jubilee 2000. It was founded in Great Britain in 1996, and has staked out a working presence throughout Europe, Africa and the Americas. In its various national and regional campaigns, as well as in its role as an international coalition, it has emerged as the anti-debt movement’s most visible institutional embodiment at the close of the 1990s.
“The Biblical tradition calls for a Jubilee year, when slaves are set free and debts cancelled,” reads the group’s statement of purpose. “As the new millenium approaches, we are faced with a particularly significant time for such a Jubilee.” The group accordingly advocates—and energetically lobbies for—the “definitive cancellation” of the foreign debt for countries “unable to meet the basic needs of their people or achieve a level of sustainable development that ensures a decent quality of life.” It further advocates debt cancellation that is not conditioned on IMF-style policy reforms, that “benefits ordinary people and facilitates their participation” in the cancellation process, that acknowledges the “responsibility of both borrowers and lenders” and that is accompanied by reforms that “prevent destructive cycles of indebtedness.”[2]
The Christian presence seems to have lent added effectiveness and legitimacy to the movement, allowing it to get at least one foot in the creditors’ door. It even allows for civil disobedience and dialogue to take place at the same time. This past Good Friday, for example, 120 members of the Religious Working Group on the World Bank and the IMF, the group out of which Jubilee 2000’s U.S. campaign was formed two years ago, held their fourth annual “Economic Way of the Cross” in Washington, D.C., a pilgrimage through 14 sites of wealth and power to pray for the victims of economic injustice, force a dialogue with multilateral financial officials and galvanize a movement for global economic justice. On this most recent pilgrimage, seven members of the group decided, in the words of Marie Dennis of the Maryknoll Peace and Justice Office, “to extend and intensify the prayer that we were doing,” by getting arrested. Dennis and six other protesters, carrying paper “chains of debt,” blocked the doorways at the IMF, refusing to leave until taken away in handcuffs. The IMF, wary of public confrontation, says it will not press charges, but rather, that it looks forward to a “fruitful dialogue” with the protesters.[3]
And at the Washington, D.C. meetings of the world’s leading industrial powers—the G7—just a few days before the seven Good Friday pilgrims got arrested, the coalition’s lobbying was so effective that it gained the attention of the mainstream press. The call for debt relief was once “the lonely domain of religious leaders and the starry-eyed political fringe,” wrote the Wall Street Journal, covering the G7 discussions, but now, “the debt-relief movement, particularly the faith-based Jubilee 2000 coalition, has jarred the highest levels of power.”[4]
Indeed, the movement’s lobbying among the leaders of the major industrial nations played a part in the G7’s June 18 announcement in Cologne, Germany that it is disposed to forgive up to $60 billion of the foreign debt of 33 poor “qualifying” countries. When the one-on-one lobbying was done, the coalition brought some 35,000 people to greet the G7 representatives in Cologne. In what has become a Jubilee 2000 trademark event, demonstrators made a human chain around the center of the city, carrying placards calling for an end to “chains of debt.” And mirroring the human chain in Cologne, Jubilee 2000 demonstrations took place in at least 35 other countries around the world. Argentines held an ecumenical debt-forgiveness service at the the Plaza de Mayo, and over a thousand Peruvians formed the familiar human chain around the German Embassy in Lima, handing 15,000 signatures calling for debt forgiveness to the German Ambassador for immediate delivery to Cologne.
The U.S. campaign has support from many of Washington’s progressive policy groups, and has been endorsed by AFL-CIO chief John Sweeney, but like the international campaign, it is principally funded and inspired by religious organizations. Calls for debt relief have come from the Vatican, the U.S. Catholic Bishops and the Protestant World Council of Churches, all citing scripture. Catholic theologian and Jubilee 2000 supporter Thomas E. Ambrogi, drawing on the Jubilee principle of forgiveness, defines an unpayable debt as a “debt whose repayment would cost such human suffering that no honorable creditor would seek to exact it.”[5] Clearly, say the U.S. bishops, we are in such a situation “when a country cannot repay its debt without critical reductions in spending for health, education, food, housing and other basic needs, and when the debt has become a serious obstacle to development.”[6]
Interestingly, says Carole Collins, coordinator of the U.S. campaign, “churches are always asked to pick up the tab for education and health care when they are cut under structural adjustment. Churches from the South have turned to their counterparts in the North. So U.S. churches have joined the campaign not only because of the moral issue but because their Southern counterparts are pressuring them.”[7]
The total foreign debt in Latin America and the Caribbean has now topped the $700 billion mark. It stood at $698 billion in 1998, up from $650 in 1997.[8] Brazil, Mexico and Argentina stand out for the absolute size of their foreign debts, owing over two-thirds of the collective total, while Honduras, Nicaragua, Bolivia and Guyana, “heavily indebted poor countries,” stand out for the desperation and impoverishment exacerbated by their hefty debt-service payments. The region as a whole pays one-third of its export earnings to service those debts, and owes over 40% of its combined gross domestic product (GDP) to foreign creditors.[9]
It is this drain on resources that feeds the growing social dislocation of so much of the continent and eats away at the ability of countries to enter a process of viable development. Jubilee 2000 groups are now active in about a dozen Latin American countries, and a Latin American and Caribbean Coalition was officially formed this past January in Tegucigalpa, Honduras, with financial and organizational assistance from the British campaign, the oldest and best-funded of the national and regional organizations.
The British campaign, still the movement’s flagship, was launched in 1996. “We tend to take the lead,” says Ann Pettifor, Director of the Jubilee 2000 Coalition in Britain, “but we don’t have an explicit leadership role. Jubilee 2000 is an informal international network. The British may be the oldest and best funded but it is not the coordinating body. There is no coordinating body.” The campaign has grown very quickly. After the UK staff was hired in early 1996, says Pettifor, “we sent out membership forms. The first groups to take it up were the evangelical aid agencies. We sent out about 100,000 leaflets to their membership and to our astonishment money and members just rolled in. The evangelical constituency in the UK is known to be very conservative so we didn’t expect it. While I am determined to bring secular voices into the movement, church groups were the initiators of the campaign and this has allowed it to spread very rapidly.”[10]
In March and April 1998, the U.S. campaign hired two staff members, opened a national office in Washington, D.C. and set up its Web site. Two months later, in May, 70,000 people marched at the G7 meetings in Birmingham, England, demanding the annulment of poor-country debt by the year 2000. This was the international coalition’s first major event. In October, 200 activists took part in the first national U.S. conference in Washington. In November, Jubilee 2000 held its first international conference in Rome, Italy, and in January 1999, the launch of the Latin American Jubilee 2000 took place in Tegucigalpa.
Putting the debt on the agenda, of course, means calling the very relationship between North and South into question—especially the relationship between Northern finance and Southern investment opportunities. Not only is the debt a brake on development, but it has become an instrument of control over the South’s sovereign governments, playing a key role in the political-economic process which has been defining both the nature and the limits of economic development—especially in Africa and Latin America—over the past two decades.
With an eye toward achieving some concrete results before raising longer-term radical demands, the campaign has tried to find some common ground with the creditor institutions. The coalition has therefore focused its energies on the world’s poorest countries—basically the same 40 or so countries already recognized by the multilateral lenders in the IMF’s Heavily Indebted Poor Countries (HIPC) initiative. The HIPC countries are eligible for debt-relief consideration if they comply with IMF-style austerity measures for three to six years.[11]
While rejecting the IMF conditions, Jubilee 2000 has targetted the same 40 countries for immediate debt relief, thereby creating some space for dialogue with the lenders. “We know we will have been successful,” says Carole Collins, National Coordinator of the Jubilee 2000/USA campaign, “if we have significantly reduced or cancelled the foreign debts of the world’s poorest countries. We will also have to ask ourselves some significant questions. Do we have a process in place that puts debtor countries and civil society in a more equitable position with the creditors? Do they have a say in how the proceeds from debt relief are used? Do they have a say in future borrowing? Those are the basic issues on which we have consensus in the coalition.”[12]
Collins is less certain that a consensus exists to work together on some of the more complicated cases of middle-income countries like Brazil and Mexico, countries with huge internal debts and with foreign debts that are increasingly owed not to accessible public bodies, but to unforgiving private lenders. Debt forgiveness for a country like Mexico, for example, would most likely require the public subsidy of wealthy lenders and bondholders—a hard sell to the community of faith.
One proposal on which a great deal of consensus seems to exist is on the establishment of an independent arbitration process to judge public insolvency. Such a process would be like the “Chapter 9” process in the United States which gives some additional protections to bankrupt municipalities, and which allows a variety of civic organizations to intervene in deciding how much of a public body’s debt goes to basic services and how much goes to creditors. Such a “neutral” process “would remove the plaintiff-judge-jury role of the IMF in the whole business of international capital flows,” says Collins. It would transfer enforcement power from the creditors themselves to an independent judiciary within an international framework. “Creditors now decide everything,” says Collins. This proposal would transform a system that is now “run by bankers for bankers.”[13]
Up until now, the strength of the coalition has been its very broad base, a strength which obviously limits the number of issues on which consensus can be found. Some parts of the coalition do indeed challenge the whole idea of debt-led growth. Others, however, accept the process but want to make it more equitable. The U.S. coalition, for example, has been supportive of Congressional debt-relief efforts, including a recent bill introduced by Republican James Leach of Iowa that would link U.S. bilateral debt forgiveness to monitored educational reform in the poorest countries.
The coalition’s support for the legislative path has led some of its radical members—based mainly in southern Africa and Central America—to argue that attempts to loosen the IMF’s stringent HIPC guidelines amount to a tacit acceptance of the HIPC process itself.[14] The radicals, however, are in a bind. On the one hand, they acknowledge the difficulty of confronting the debt without broad active participation. On the other hand, they know that such broad-based participation can be obtained only on the basis of a fairly explicit agreement not to raise fundamental disagreements. Broad participation, that is, seems to preclude a radical agenda. That dilemma pervades the movement, appearing frequently as a conflict between the movement’s Northern and Southern contingents, and is frankly recognized by most of the movement’s principal organizers. The UK’s Ann Pettifor, for example, despite her mandate to reach out to sympathetic members of the financial establishment, acknowledges how important the radical Southern voices are to the movement.
“There’s a tension we are trying to avoid,” she says, “but it grows up because many people in the North are so tied into the legislative process that all they can think of is lobbying the powerful and drafting legislation. Voices from the South, on the other hand, have been raising more all-encompassing demands. And what many of us are affirming is that the voice of the South must be integrated into what we are saying. We can’t speak for them or speak at all without integrating them into the project.” Pettifor goes on to speak of the campaign as “a progressive radical movement,” even though it has a membership of widely diverse points of view. “Neoliberalism,” she says, “is based on the absolute freedom of capital to go wherever it wants and do what it wishes. What cancellation of debts would do is curtail those freedoms. It would make borrowing and lending more difficult.”[15]
Meanwhile, a larger vision may be developing. “There is beginning to be an international recognition of the debt as a human rights issue,” says Collins. “The UN Commission on Human Rights has even designated a special rapporteur on the debt.” Beyond that, she says, “there are efforts to recover what some people call ‘stolen wealth’—public sector resources siphoned off by dictators and their cronies. But the dictators all had collaborators and this leads to the question of coresponsibility. Creditors are culpable if they knew full well that funds were going to be siphoned off. If you want to counter a culture of corruption, you have to look at all the forces that have nurtured that corruption, like the buying off of dictatorships during the Cold War.”[16]
And writing in the National Catholic Reporter this past March, theologian Thomas Ambrogi remarks that “the hidden blessing of the debt crisis may be that it will force the world toward a new global order, and there is more than a hint of this vision in the realistically ambitious goals of Jubilee 2000.”[17]
ABOUT THE AUTHOR
Fred Rosen is publisher of NACLA Report on the Americas.
NOTES
1. See Fred Rosen, “Back on the Agenda: Ten Years after the Debt Crisis,” NACLA Report on the Americas, Vol. XXXI, No. 3 (November/December, 1997), pp. 21-24.
2. The Jubilee 2000 platform can be found on the group’s Website: .
3. Jerry Filteau, “Debt Protesters Arrested on Good Friday,” National Catholic Reporter, April 16, 1999.
4. Michael M. Phillips, “Debt Relief, Long Ignored, Gets Spotlight,” Wall Street Journal, April 26, 1999.
5. Thomas E. Ambrogi, “Goal for 2000: Unchaining Slaves of National Debt,” National Catholic Reporter, March 26, 1999.
6. Gustav Niebuhr, “Bishops Urge Rich to Grant Debt Relief to Poor Nations,” New York Times, April 25, 1999.
7. Author’s telephone interview with Carole Collins, May 31, 1999.
8. This is the “total disbursed external debt.” See Economic Commission on Latin America and the Caribbean, “Preliminary Overview of the Economy of Latin America and the Caribbean, 1998,” CEPAL News (January 1999). The total long-term debt stood at just over $586 billion, up from $380 billion in 1990. See the World Bank tables cited by Doug Henwood, p. 18, in this issue.
9. Doug Henwood, “The Americanization of Global Finance,” in this issue.
10. Author’s interview with Ann Pettifor, Tegucigalpa, Honduras, January 27, 1999.
11. For the details of the HIPC initiative see the designated page at the World Bank Website: . The Jubilee 2000 Website also has a useful discussion of the HIPC initiative: .
12. Author’s telephone interview with Carole Collins, May 31, 1999.
13. Author’s telephone interview with Carole Collins, May 31, 1999.
14. Southern positions and complaints have been circulating somewhat haphazardly by Email over the past year. This finally led to the convening of a Jubilee South Summit at the Cologne, Germany meetings of the G7, June 16-21, 1999.
15. Author’s interview with Ann Pettifor, Tegucigalpa, Honduras, January 27, 1999.
16. Author’s telephone interview with Carole Collins, May 31, 1999.
17. Thomas E. Ambrogi, “Goal for 2000: Unchaining Slaves of National Debt,” National Catholic Reporter, March 26, 1999.
