Blog the Debt

Debt Relief: The Results Are In

Check out our article published yesterday in Yes! Magazine online:

Debt Relief: The Results Are In

Debt relief has allowed poor nations to pay for schools and health care instead of loan interest. A new bill in the U.S. Congress would offer relief to more countries and make lending more responsible.

by Hayley Hathaway
posted Dec 17, 2009

Pressure is building from civil society to build on the successes of debt relief by addressing past odious debt and creating a fairer system for future borrowing.

Today, the Jubilee Act for Responsible Lending and Expanded Debt Cancellation was introduced in the House of Representatives by a bipartisan group of Congressional leaders, including Maxine Waters (D-CA), Barney Frank (D-VT), Spencer Bachus (R-AL), and seven other Republican and Democratic representatives. The bill would increase the number of nations eligible for debt relief from 40 to 62 and create a framework for responsible lending, so countries won't get back into debt in the future.

The bill passed the U.S. House of Representatives in 2008 but did not come up for a vote in the Senate before the congressional session expired.

Debt relief works
Peter Chibize walked twelve miles from his village in southern Zambia to the nearest health clinic, unsure how he would convince the doctor to treat his chest pains, headache, and cough for free. He agonized until a nurse told him that he did not have to pay. "It was like a dream to me," said Chibize."Not to pay anything when you visit a clinic is amazing."

Before debt cancellation, even the most impoverished Zambians had to pay to see a doctor, making it impossible for many to access desperately needed care. Now, health care is free for the poorest.

This is one of the stories featured in a new report, "Debt Relief Works: The Impacts of Debt Cancellation in Africa and Latin America" by Jubilee USA Network, an alliance of over 75 organizations working for definitive debt cancellation for impoverished countries and reform of the international financial institutions and architecture.

Zambia is one of dozens of countries in Africa, Latin America, and Asia whose debt has been canceled as the result of a citizen-led global movement. Through two international debt deals in 1999 and 2005, more than $100 billion has been delivered back to the world's most impoverished countries to be used for desperately needed social services.

Jubilee Act in the House!

The Jubilee Act for Responsible Lending and Expanded Debt Cancellation (HR 4405) was introduced yesterday in the House of Representatives!

The bill already shows strong bi-partisan support with original co-sponsors by Representative Maxine Waters (D-CA), along with Financial Services Committee Chairman Barney Frank (D-MA), Ranking Member Spencer Bachus (R-AL), and seven more Republican and Democrat members of Congress. The Jubilee Act would give 22 impoverished countries left out of previous debt relief deals the debt cancellation they need. The Act also calls for an end to harmful economic conditions and an audit of past odious and illegitimate debts.

This important moment comes after almost a year of hard work here in Washington, DC and around the country. In Jubilee’s DC office we have been busily strategizing, meeting with Representatives and Senators, and helping grassroots supporters around the country organize to take action and build momentum in their communities. Supporters have already sent in 10,000 Change, Not Chains postcards to pass the Jubilee Act. This fall they organized 90 Stand Up Take Action events across the country to fight global poverty.  Now, Jubilee groups, congregations, and supporters are hosting Jubilee Action Parties in their communities to plan actions to pressure Congress to pass the Jubilee Act.

• To get more involved, click here

Gambling on Hunger

Market deregulation. Commodity speculation.

When you read these words, do they catch your eye? Make you want to take action?

Probably not. But maybe they will after watching this new video by our partners at the Maryknoll Office for Global Concerns.

Stop Gambling on Hunger looks deeper into the food and fuel crises to see that their causes were not natural, but resulted from the casino economy created over many years on Wall St. and in Washington DC.

We have seen the devastating impact of the food crisis on a country like Haiti, who last year was struck by food riots when global food prices rose 70% in four months. At that time, the country was continuing to pay millions a month in debt service while people starved.

Over 450 organizations have come together to work to stop excessive food speculation. Legislator are making decisions as you read on this issue, so the time to act is now.  Click here to send a message to your Members of Congress today.

As said in the video, investors should never get rich off of people getting hungry.

Learn more on the website stopgamblingonhunger.com

Coping With Climate Debt in Copenhagen

By Julia Dowling

This week I have been keeping a close eye on the Copenhagen Climate Summit that began on Monday, bringing with it delegates from around the world including President Barack Obama.  I’ve been reading up on discussions surrounding one of the major controversies being debated at Copenhagen: the idea that industrialized nations owe impoverished nations who suffer most from climate change financial compensation. 

The fact of the matter is that the North has largely created the climate change crisis, starting from the dawn of the Industrial Revolution. The United States alone has emitted 25% of global carbon emissions while the US is only 5% of the world’s population.  Despite our responsibility for the crisis, it’s the poor citizens of the South that are literally feeling the heat. 

Indirect consequences of climate change are close on the horizon for the poorest of the South; an estimated 182 million people in Sub-Saharan Africa could die from an increase in disease directly attributed to climate change. When the rains finally fell after two years of drought in Ethiopia, 400 people died as a result of the river bursting over its parched banks. Even more disconcerting is the instability states will experience from the massive amount of displacement we’re likely to see in the coming years thanks to climate change—between 25 million and 1 billion people in total.  According to a study by the International Organization for Migration, regions and countries most likely to have massive amounts of Internally Displaced Persons due to climate change include Afghanistan, Bangladesh, most of Central America, West Africa, and South East Asia.  The common thread between these countries: poor or developing Southern countries that historically have contributed little to the high levels of carbon leading to this climate catastrophe. 
   
This concept, known as the Climate Debt, has been highlighted as a Copenhagen controversy in several publications, including the New York Times’ article from the opening day of the summit.  I knew we were really onto something with Climate Debt when the research assistant of Naomi Klein, author of The Shock Doctrine, contacted me about an in-depth article she was writing for Rolling Stone.  In “Climate Rage” Ms. Klein highlights the disparities between those who have caused the climate crisis, who are most affected by it, and visionary voices urging for climate reparations to be committed to the South on the global stage of Copenhagen.

Debt Relief Does Work

By Jennifer Schuster

Because of debt relief, 50% more Tanzanian children have been able to attend school for the 1st time. 

Because of debt relief, 91% of Ghanaian children were enrolled in school. 

In 1996, the IMF and World Bank introduced the Heavily Indebted Poor Country Initiative that was aimed to alleviate unsustainable debts held by many impoverished nations in the Global South.  Through the tireless efforts of Jubilee and many of our partners worldwide, increased debt cancellation was given through the Multilateral Debt Relief Initiative in 2005.  Though this debt cancellation has been limited in its scope, it has done amazing things for many of the recipient nations. 

Jubilee has just released an updated resource highlighting some of the benefits of debt cancellation. Check it out here: http://www.jubileeusa.org/?id=115

Debt relief has helped many countries get closer to reaching the Millennium Development Goals and has given new generations a chance to be free of the chains of debt.

According to the World Bank and IMF countries that received debt cancellation have increased their social expenditures by 75%.  Because of debt cancellation that has allowed them to build more health centers in rural areas as well as recruit more teachers and build more schools allowing for more children to go to school  Other countries have focused their attention on reducing child mortality rates and increasing maternal healthcare.  Many recipient countries are also on track to meet their MDG for Combating HIV/AIDS, Malaria and other diseases. 

These victories in the fight against extreme poverty have been tremendously important, but are still not enough.  So far, debt cancellation has not been comprehensive enough to make a big enough dent in eradicating extreme poverty.  More can and needs to be done.  But proof is in the pudding, and debt relief does work!

Vultures Feast on Liberia this Thanksgiving

By Julia Dowling

The Vultures have struck again!

Their latest prey: Liberia, a country that ranks in the bottom 15 for basic living standards.  With life expectancy at a shocking average of 45 years, the country's democratic government has been making concerted efforts to address the legacy of the civil war and crushing poverty. 

This morally reprehensible news is even more shocking in the context of Liberia’s recent victory in April, when the country reached an agreement canceling $1.2 billion of its commercial debt.  This past weekend, while Americans enjoyed their turkey and mashed potatoes, Liberia had little to be thankful for when news hit that two Vulture Funds were awarded $20 million from a 30 year old loan and that was originally only worth $6 million.  The UK Court’s settlement of $20 million represents all of Liberia’s 2008/2009 education budget and 150% of the funds allocated for health expenditures.  In total, 25% of Liberia’s poverty reduction spending will go to two Vultures located in tax havens.

The media coverage of this upsetting news includes stories from the BBC, The UK Independent, The UK Guardian, and Bloomberg.  It is clear that urgent action is needed!  To learn more go to our Stop the Vulture Culture Campaign site, and make sure to visit our Take Action Page to ask your Representative to co-sponsor the Stop VULTURE Funds Act, H.R.2932.  We need to protect poor countries from paying hedge funds the money needed to fight poverty.  Pass the Stop VULTURE Funds Act to stop this behavior once and for all.

From Georgia: Jubilee at the School of the Americas

By Hayley Hathaway

Last weekend I traveled to Columbus, Georgia for the annual School of the Americas vigil. I had been last year, and was looking forward to the great energy and spirit of the event. Unlike many protests, the vigil balances celebration and mourning, mixed with a hint of spontaneity.

For more than a decade, activists have been traveling to Fort Benning from around the country to protest the military school that trains Latin American soldiers. Many of the school’s graduates have returned to their countries to participate in coups and paramilitary efforts, including the most recent coup in Honduras. The protest has a tradition of resistance; each year people decide to “cross the line” onto the fence at the main gate, guarantying themselves arrest - and publicity. Over the years, the fence has gotten stronger and higher and the security tighter.

It's a powerful thing to be with thousands of other activists and US citizens who care so deeply about creating a more just world. On Saturday morning my compatriots and I awoke early and went to the gates of Fort Benning to set up the Jubilee USA table. I set up my registered table with Jubilee brochures, postcards, and information about the organization. My neighbors were a youth spoken word team from Atlanta on one side and a seller of Catholic books on the other. Other Jubilee friends were also tabling or in the crowd. Many of our Jubilee partners are regulars, such as the Maryknoll Office for Global Concerns, and many members of our Jubilee Congregations make the trip down.

From Geneva: A Challenge to Illegitimate Debt

By Neil Watkins

Last week, I had the opportunity to attend a meeting of the United Nations Conference on Trade and Development (UNCTAD) in Geneva about how the global economic crisis is affecting developing countries’ debt situations.

The conference brought together more than 350 participants from 100 governments, representatives of civil society like me as well as representatives from other official institutions including the IMF and World Bank.

One of the main themes of the conference was that the global economic crisis is hitting the poorest the hardest. As Musharraf Hossain Bhuiyan with the Ministry of Finance in Bangladesh pointed out, “This crisis was born in the advanced market economies but has major consequences in developing countries. Poor countries are the victims of developed countries’ mistakes.”

The crisis is also endangering some of the gains we have made as debt campaign. With markets for poor country exports down, governments have less income to pay for debts and to finance their government budgets.

As UNCTAD’s Secretary General Supachai Panitchpakdi pointed out: “Developing countries face a Hobson’s choice: Pursue debt sustainability or huge new borrowing. Both options are bad. Full debt cancellation and large increase in aid are needed instead.”

Can I Get a Witness? Faith Community Gathers to Support Climate Justice

Yesterday was a glorious day.

A sunny, bright, crisp fall day in Washington DC.

But don’t be distracted by the beautiful weather, said Rev. John McCullough, Executive Director and CEO of Church World Service. The climate change crisis is real, warned the Reverend as he spoke to a group gathered on the US Capitol’s northeast lawn for the Climate Witness and Day for People of Conscience.

Sponsored by a host of Jubilee Network Council members, including United Methodist Women, Church World Service, and the Unitarian Universalist Association, the event on this lovely day was both a practical call to action and a step in strengthening the faith community’s voice on the climate issue.

Climate change is a justice issue that affects not only our neighbors in the US, but our neighbors abroad. Citizens in the world’s most impoverished countries are the most impacted by climate change, yet has the least to due wish causing the crisis.

As people of faith, it is our duty to bear witness – and take action – to curb the devastating effects of climate change. The message of climate justice was lifted up throughout the morning by other speakers like Harriett Jane Olson, Deputy General Secretary of the United Methodist Women, and the General Secretary Rev. Dr. Michael Kinnamon of the National Council of Churches. Music from local DC residents Alicia Gill and Gordon Kent filled the crisp fall air and lifted our spirits.

The event was not just song and speech, though. The day culminated in the delivery of over 30,000 postcards to US Senators and constituent meetings with key decision makers on the need for a stronger climate change bill all leading up to the climate meetings in Copenhagen in December.
 

Trick or Treating with a Vulture Fund

By Devon Davidson

Looking for an attention-getting addition to your work to stop Vulture Funds?  The recent Jubilee Network meeting gave me an idea for a Halloween costume.  I dressed as a Vulture Fund! 

I transformed myself into a fierce vulture with a black robe with a hood.  I made a beak from construction paper and attached play money to the end.  Then I pinned a black shawl to the back by the neck and to the tip of the arms for wings.  I carried a sign that said, “I’m a Vulture Fund.  Give me a poor, indebted country to eat.”  Then I carried a handful of money to throw around.

 I’m sure you could add touches of your own to make an even more realistic and frightening vulture.  Then, at the party, I explained Vulture Funds to my friends.  But don't wait for next Halloween--use it to attract attention at a demonstration!

Tell Congress to stop what's really scary this Halloween

Click here to download Jubilee's newest Vulture Fund factsheet