The Campaign to Cancel The Debt – A Progress Report

This time last year was a particularly busy period for us at the Social Justice Committee, as it was for many organizations involved in the international Jubilee debt cancellation campaign. We were in the midst of a mad race to garner as many signatures as possible to the petition calling on the leaders of the G–7 (G–8?) to cancel the foreign debts of the poorer countries and to set in motion reforms of the international economic systems so that similar debts would not arise once again. We at the SJC were determined to explain the issues to the best of our ability to those whom we were inviting to sign the petition and so, our debt kits were in heavy demand. We had four of them and on some weekends all four were in use as a team of staff and volunteers criss–crossed Quebec and southern Ontario giving presentations in both English and French.

As most of you know, in terms of numbers the international campaign or, to be more correct, campaigns, were quite successful and petitions signed by over 17 million people from around the world were presented to the G–7 last June in Köln (Cologne), Germany. Now that a year has passed since those heady days, it is time for us to take a look at what has happened since and to indicate to our readers where this issue appears to be going now. The 17 million signatures on the petitions and the publicity surrounding this Jubilee Initiative placed the leaders of the G–7 in a position of having to respond. As you may have read in previous editions of the Upstream Journal and elsewhere, this response was really quite muted. Oh, it did not appear that way, as the mainstream press announced cancellations of multilateral debts to the tune of hundreds of billions of dollars. In effect, the amounts were much less and far from the amounts called for in the Jubilee petition. The most significant result was probably the announcement that the reduction of poverty would henceforth become a main theme in future debt reduction programmes. Moreover, the Heavily Indebted Poor Countries (HIPC) Initiative would in future encompass more poor countries, offering them a bit more relief and somewhat quicker. However, the structural adjustment programmes, so greatly detested by popular organizations in both the North and the South were to remain in place. Since then, however, there has been some movement on the part of the IMF. Enhanced Structural Adjustment Facilities (ESAFs), the more formal name of the SAPs, have now been replaced by the Poverty Reduction Growth Facility (PRGF). Whether this will actually be good news for the world's poor or just a cynical attempt to camouflage the status quo by using a better sounding name is yet to be seen.

Both before and after Köln a number of the G–7 countries also announced bilateral debt cancellation programs for some of the poorest countries. How much of this is real debt relief as opposed to empty rhetoric is also unknown at the moment. Canada, for instance, in March '99 announced the cancellation of the bilateral debt of a number of the poorest countries. It appeared as if this was immediate but in fact only one country, Bangladesh in December, has so far actually experienced the cancellation of debt. Even Honduras, one of the most heavily afflicted victims of Hurricane Mitch, will likely have to wait years before the cancellation of its debt to Canada finally kicks in.

Meanwhile, the proponents of debt cancellation have also been busy. The Jubilee petition was not our sole activity even–if it has been the most publicized. A note of caution here. The Jubilee campaign so successfully attracted media attention and public imagination that it led some people to believe that Jubilee is the only game in town. We must remember that Jubilee, especially in Canada but elsewhere as well, has been a Christian Church–related initiative. There are other organizations (in Canada, many members of the Halifax Initiative, for example) not connected with Jubilee also calling for major debt relief for the world's poor.

Jubilee – Internationally

While Köln marked a high point in the life of the international Jubilee Initiative, it also revealed some major differences of opinion between, generally speaking, the Northern and Southern Jubilee organizations. Prior to Köln, the leadership of the Initiative lay in the hands of Northern countries, particularly the British. Thus, by and large, it was Northerners who decided which countries should be included in the list of nations destined to have their debts canceled, under what conditions and the strategy for the campaign. A major reason for this was that it is the more important Northern countries who are the creditor nations and who have by far the greatest influence in the International Financial Institutions (IFIs) such as the IMF and the World Bank.

Both at Köln and ever since, many southern Jubilee organizations have made it clear that they do not see themselves as the proverbial dog's tail. They see themselves as playing a major, if not the major role in determining where Jubilee goes from here. As readers of the Latin–American 2000 Agenda can attest, many people in the South look at the question of the debt differently from many Northerners. At the very least, they see the North as bearing the major responsibility for the debts. Five hundred or more years of colonial exploitation; the destruction of much of the world's natural environment; totally unfair rules of trade; support for Southern dictators; involving the South in Northern wars; and control of the international banking system place the North at the heart of the problem. In fact, as far as many Southerners and some Northerners are concerned, the South does not owe anything to the North, whatever Northern bankers' books might say. It is the North that owes the South compensation for all the damage that we have done. So, why should it be Northerners, even those of good will, who decide which countries should have their debts canceled and under what conditions? Why should we pay any attention at all to the IMF's new poverty reduction facility which still sees the South as responsible for its debts to the North?

In November 1999, representatives of 35 Southern Jubilee campaigns met in Johannesburg, South Africa, and formed Jubilee South. Among Jubilee South's strategic goals are:

• the collective repudiation by South Governments of odious, onerous, criminal, fraudulent and all illegitimate debts;
• the rechanneling of public funds away from debt service and towards people's welfare and basic services, and equitable and sustainable development;
• total debt cancellation without conditionalities by creditors;
• the end to SAPs and the shutdown of the IMF, the World Bank and other similar multilateral institutions;

Jubilee – Canada

As already mentioned, the Canadian Ecumenical Jubilee Initiative (CEJI) is a product of a number of Christian Churches and organizations (the SJC, a secular organization, is an exception to the rule). From its inception it has been somewhat different from other national Jubilee programmes in that it has never seen the foreign debt of poorer countries as being the sole focus of its attention. Drawing its inspiration from the Book of Leviticus in the Jewish Scriptures, CEJI has a three-pronged program. The first has been the debt; the second – launched in September 1999 – has as its theme the Redistribution of Wealth and looks at Canada as well as the South; and the third, to come later this year, is concerned with care for our natural environment. These are not three one–year campaigns but rather ongoing programs launched over a period of three years.

As concerns its work on the debt, CEJI has taken great pains to work closely with its Southern partners and to understand their points of view. Accordingly, CEJI and its members, including the SJC, waited to see what positions and strategies would be adopted by Southern campaigns at Johannesburg. In the meantime CEJI has encouraged people to send postcards to the Canadian government asking that Canada fulfill the promise made last March to cancel the bilateral debt owed it by the poorest countries.

The Halifax Initiative

Our work in partnership with the other organizations of the Halifax Initiative Coalition – development, human rights, labour, environmental, church – comes from our desire to change the institutions that dominate world finance, to achieve a more equitable global order.

The SJC is deeply involved in several aspects: debt relief provided by the World Bank, IMF and other institutions; the evolving new framework for poverty reduction at these institutions; the reform of the Canadian Export Development Corporation (EDC), which is responsible for almost all debt to Canada by poor countries.

This is very much as nuts–and–bolts approach. For example, the Halifax Initiative has just released a comprehensive paper specifying what we want in EDC reform. The section on debt, authored by the SJC, calls for special considerations for indebted poor countries. The EDC should, for example, demonstrate that its loans contribute to quality growth, social progress, and economic stability in these countries. There should be no expectation of a bail–out by the government of Canada if a loan becomes uncollectable, as is now the case.

We continue to meet with government officials to promote our recommendations. Many of these were incorporated into the recommendations of the Standing Committee of the Department of Foreign Affairs looking into the rules governing the EDC, and we are pushing to make sure these, and our other recommendations, become reality.

–Ernie Schibli