Debt

Fast For Justice

Through the Jubilee USA Congregations program, faith communities across the U.S. plan to engage a powerful Christian tradition—fasting—to bring home the need to release millions more from the captivity of debt. From Sept. 6 to Oct. 15, 2007, the campaign will engage tens of thousands of supporters around the country and the world in the "Cancel Debt Fast." This will culminate in a week of action in Washington, D.C., Oct. 14 to 20, when supporters can participate in a national prayer breakfast and lobby for the Jubilee Act. With the annual meetings of the IMF and World Bank scheduled for Oct. 19 to 21, campaigners can call for justice at these global institutions as well as in the halls of Congress.

Christina Cobourn Herman was anassociate director of the Oblate Justice and Peace/Integrity of Creation Office in Washington, D.C., when this article appeared.

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Sojourners Magazine August 2007
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Corruption: Everybody's Problem

Corruption is a problem in Kenya and many countries. Where corruption is intractable, trust funds can be used to ensure that money freed by debt cancellation is used to benefit the poor. In Uganda, for example, money has been channeled through a Poverty Action Fund, which is overseen by representatives from government, national and international nongovernmental organizations, churches, and unions.

It's important to understand how the international debt system fuels corruption. IMF conditions have forced governments to cut jobs and lower salaries, leading workers to demand bribes. And, in the past, international creditors lent country executives money without their legislatures approving, or even knowing the amount of, the loans. Civil society groups in countries scarred by the debt crisis, such as Zambia and the Philippines, have been advocating for parliamentary oversight of new debts and want greater transparency of information to be able to hold their governments accountable.

Christina Cobourn Herman was an associate director of the Oblate Justice and Peace/Integrity of Creation Office in Washington, D.C., when this article appeared.

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Sojourners Magazine August 2007
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Jubilee: A Sabbath from Suffering

"Every seventh year we will forgo working the land and will cancel all debts." —Nehemiah 10:31

 

In Kenya, 1.3 million people are living with HIV/AIDS, and many lack essential medicine and food. Half the population lives in poverty; 40 percent are unemployed. Yet, in recent years, the Kenyan government has had to pay as much in debt payments to foreign creditors—hundreds of millions a year just in interest—as it has for water, health, agriculture, roads, transport, and the finance ministry combined! With this budget, Kenya attempts to fund HIV/AIDS treatment, meager agricultural extension services for poor farmers, and a deteriorated road network that needs an estimated $1 billion in repairs.

Most of Kenya's external debt of some $10 billion was racked up during the 24-year dictatorship of Daniel Arap Moi, which lasted until 2002. Moi and other corrupt government officials salted away billions in private bank accounts, as Western governments were well aware. Yet, the International Monetary Fund and the World Bank, which are controlled by the United States and other wealthy countries, continued to lend to Kenya until 1997.

As Wangari Maathai, Kenyan environmental activist and Nobel Peace Prize winner, puts it, "The people who are really being punished [for Kenya's debt] are the poor people who never received that money to begin with. ... Those who did business with our leaders knew they were corrupt, that they were not delivering services, that the money was quite often stolen and stashed away. Yet when you request cancellation [of debts], people want to pretend that you got that money."

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Sojourners Magazine August 2007
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Who Owes Whom?

The story of debt in Africa is not pretty. In the late 1960s in many countries, undemocratic governments began borrowing large amounts of money from governments, multilateral institutions, and banks. Much of this money went into boondoggles that benefited transnational corporations or massaged the egos of dictators, some of it went into private bank accounts, and small amounts of it went into real projects that benefited Africans.

In the 1970s and 1980s, when interest rates rose and export commodity prices were low, country after country experienced difficulties in repaying debt. At this stage, creditors invariably sent in the International Monetary Fund to press countries to shift policies toward exports, toward privatization, toward selling off essential services to the highest multinational corporate bidder—all with the goal of getting the loans repaid. The poor and the environment paid a heavy price.

By the late 1990s, under pressure from Jubilee groups in the South and North, governments at G8 meetings and elsewhere devised a debt relief program; however, it was laden with onerous conditions, and brought little meaningful debt cancellation to the African world.

Today, perhaps the most exciting campaigns are emanating from Jubilee South with their calls for debt repudiation and reparations. Campaigners in Kenya, Nigeria, Liberia and elsewhere are demanding their governments stop payments and repudiate the debt.

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Sojourners Magazine August 2007
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Lenders and Illegitimate Debt

Asserting that "it takes two to tango," the Jubilee movement argues that it is high time lenders assume their share of responsibility for the debt crisis. Many projects benefited creditor country firms, but not the people who now have to pay.

The Bataan Nuclear Power Plant in the Philippines is a prime example. Built on an earthquake fault line at the foot of a volcano, the nuclear plant is unsafe and has never been used, but it costs the Philippines $155,000 a day in debt payments to U.S., Swiss, and Japanese banks. Like much of the Philippines' foreign debt, this debt was incurred during the 24-year dictatorship of Ferdinand Marcos, who was supported by successive U.S. administrations eager to maintain two key military bases on Philippine soil.

As a U.S. ally, Marcos was favored with loans from commercial and multilateral lenders, despite clear knowledge of rampant corruption. For instance, Marcos and his close associate Herminio Disini together are said to have personally taken some $80 million from the Bataan nuclear project; Westinghouse, the U.S. firm that won the contract, admitted to having paid Disini $17.3 million in cash as a commission. Today, although the Philippines is considered a middle-income country, 40 percent of Filipinos live in poverty. Like many other countries, it struggles to develop while shouldering the heavy yoke of illegitimate debt.

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Sojourners Magazine August 2007
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New and Noteworthy

Maxed Out
Danny Schechter's In Debt We Trust is a useful—and terrifying—look at how much debt Americans are carrying around (about $30,000 per household) and why. Interviews with credit card junkies, former industry employees, and government leaders reveal a system that specifically targets people least likely to be able to pay off their debts. The 90-minute film also includes strategies for getting out of our financial hole, as individuals and as a nation. Globalvision.

70 x 7
The world was horrified when five Amish girls were killed in Nickel Mines, Pennsylvania, last year. And many were confused—and angry—that the Amish community could forgive the shooter so quickly. Amish Grace: How Forgiveness Transcended Tragedy, by Donald Kraybill, Steven Nolt, and David Weaver-Zercher, looks at this event and its aftermath, but also at how forgiveness, justice, retribution, and grace are understood in the Amish tradition. Jossey-Bass.

Divine Perplexities
Tokens of Trust: An Introduction to Christian Belief, by Archbishop of Canterbury Rowan Williams, is a wise and gentle guide for all who have asked themselves why they should put their trust in God—especially in the midst of so much suffering and evil. Williams uses the Nicene and Apostles' Creeds to discuss why we should take God and the church seriously, how we can understand Jesus' life and ministry, and why God is worthy of our trust. Westminster John Knox Press.

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Sojourners Magazine August 2007
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Celebrity Activists

An aid-worker friend in Darfur has sent e-mail updates during the past year about the escalating crisis there. They often included the worried questions: “Is this on the radar in the States? Does anyone care?”

I always answered, sadly, that despite some notable exceptions (New York Times columnist Nicholas Kristof for one), Sudan largely went unmentioned in the mainstream press—that is, until mid-May of this year, when the issue consistently made it into the headlines. According to the Associated Press, the three network evening newscasts had devoted less than a combined 10 minutes to the conflict in 2006—and in under a week, that airtime skyrocketed. Suddenly, everyone was talking about Darfur.

Why? Certainly years of activist work was finally paying off. But another factor was star power. Actor George Clooney traveled to a Sudanese refugee camp armed with a video camera and his celebrity, then returned to speak at a well-attended rally in Washington, D.C. Meanwhile, NBC’s medical drama ER aired a special episode featuring two attractive doctors getting their hands dirty in the African nation, with the actors appearing on news magazine shows to speak about the crisis.

Clooney and the ER docs aren’t alone. Chances are that by the time you read this, several other international hot spots will have had their moment in the limelight—thanks to a phenomenon Time columnist James Poniewozik calls “charitainment.” In Hollywood, it seems, philanthropy is the new black. From Meg Ryan to Angelina Jolie to the ubiquitous Bono, A-Listers are promoting a slew of humanitarian causes, from the fight against AIDS to the alleviation of Third World debt to trade justice issues, fueled by the knowledge that, as Poniewozik notes wryly, “in this world, nothing matters that does not have a camera pointed at it.”

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Sojourners Magazine July 2006
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Debt Relief at Last?

During the last few months,

During the last few months, desperately needed progress has been made on debt relief for the world’s poorest countries. In the lead-up to October’s World Bank and IMF meetings, the U.S. Treasury floated a plan to cancel 100 percent of the debt owed to those institutions by about 30 extremely poor countries.

The need has never been more urgent. Foreign debt is the gift that keeps on taking—many countries, even faced with runaway rates of AIDS and poverty, are forced to spend more each year on interest payments than on education or health care. African countries pay almost $15 billion a year in interest—one and a half times what the AIDS-ravaged continent receives in foreign aid. And debt relief works; the limited debt relief awarded so far has helped countries put millions of children back in school, vaccinate kids against deadly diseases, and fight HIV infection rates.

The Treasury plan isn’t perfect. At least 20 more countries are in great need of debt relief, and the plan is likely to include harmful demands. At press time, it wasn’t clear whether the G7 finance ministers would accept the U.S. plan, or whether activists will have to focus still more pressure on wealthy governments leading up to the G8 meeting in Scotland in July 2005. But when debt relief happens—and, for the survival of millions of the world’s poor, it must happen—there are several lessons we can learn from the past mistakes.

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Sojourners Magazine November 2004
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Children Lead - Who Follows?

In Nairobi, 700 children walked out of school and through the streets this April, calling for an end to their country's debt burden. The Cancel Debt for Children campaign, organized by the Dutch faith-based organization Plan Nederland, is lobbying Kenya's foreign creditors to write off existing loans on condition that the saved resources are used for free education and health care for children.

David Odhiambo, the children's representative, urged "all the countries, banks, and other institutions, which Kenya owes money, to help us go to school and get quality health care." Kenya's Minister of Home Affairs added, "Meeting our debt obligation is both [a] moral and legal duty, but it raises serious moral and human rights questions, especially when a country has to sacrifice its resources on education and health care of children to meet this obligation."

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Sojourners Magazine September-October 2003
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Educated to Debt

$1,000,000: Amount more a college degree is worth compared to a high school degree across a lifetime in the workforce

$16,928: Average cumulative federal student loan debt (1999-2000)

$9,188: Average cumulative federal student loan debt (1992-1993)

64%: Percentage of students who take out federal loans

40%: Average increase in tuition and fees at a public institution over past decade

32%: Percentage of students who have four or more credit cards

$2,748: Average student credit card debt

10%: Percentage of students who owe more than $7,000 on credit cards

Source: Sallie Mae, Christian Science Monitor

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Sojourners Magazine September-October 2002
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