Blog the Debt

The World’s Youngest Nation: South Sudan

By: Samantha Retrosi

Happy Independence Day!

July 9th, 2011 marked South Sudan’s birthday: day one in the existence of the world’s newest nation!  In January 2011, the South took to the polls, in which an overwhelming majority (99%) voted to split from Sudan.  South Sudanese freedom is the final outcome of a 2005 Comprehensive Peace Agreement that put an end to Africa’s lengthiest civil war. Marked by the death of 1.5 million people and the displacement of 4 million more, this date concluded nearly 22 years of conflict.  

South Sudan will start its own history accompanied by an unexpected birthday gift: freedom from the $38 billion debt carried by a formerly unified Sudan.  In the past, other nations such as Bangladesh, Zimbabwe and South Africa have not been so lucky and inherited unjust debts from past regimes.  Starting off debt free is nothing less than momentous for the new nation but this does not come without its own unique difficulties, especially for the new southern state.  The trouble is: how can South Sudan stay debt free?  

End Tax Haven Secrecy

By Stephanie Cook

Tax injustice has become a serious international issue that requires serious action and attention.  Jubilee USA is extending its focus from debt relief to solving the root causes of unsustainable debt.  This new wave in the Jubilee USA movement involves an active focus on Tax Justice and the damaging effects that unfair tax practices by multinational corporations have on the world’s poorest countries. 

Large multinational corporations commit tax injustice when they store taxable funds in geographic
areas with low to no taxation. 
These areas are called tax havens. Multinational corporations make use of these little treasure islands because it allows them to keep large amounts of profit, yet in doing so they rob the countries in which they operate of much needed tax revenues.   

Taxation is vital in both low-income and high-income countries as it enables governments to provide basic infrastructure and services such as healthcare and education, which not only improve quality of life but also promote economic stability.  It is estimated that the annual loss of taxable revenue caused by corporations using tax havens is $250 billion (Tax Justice Network, 2005).  This figure is shocking when considering:

• It would cost $10 billion per year to achieve universal primary education.
• It would cost approximately $3.6 billion per year to provide anti-retroviral medication to the population of sub-Sahara Africa suffering from HIV/AIDs.
• It would cost an estimated $6 billion per year to battle malaria in African nations.

Stop Commodity Speculation and Help Hunger

By Kimberly Bien

In recent years, the media has focused on global food riots that have resulted from increasing food prices. For example, rioting over high food costs in Algeria earlier in 2011 can be seen here.  The rising violence of the food riots in Algeria and Tunisia demonstrate how quickly both individual’s lives and how society operates when people are unable to feed themselves.  The global food crisis has forced the poorest people in the world to give up important social expenditures, like health and education, to be able to buy basic commodities like corn and sugar, and face the real risk of hunger and malnutrition. In fact, from June 2010 to January 2011 corn and sugar prices had increased an astounding 73%

The Stop Tax-Breaks for Oil Profiteering and Commodity Speculation Act (STOP Commodity Speculation Act) would close a loophole that gives financial speculators tax incentives to gamble on the commodity market, which has been linked to the rising food prices.  Senator Wyden’s (D-OR) legislation, and would likely bring an end to uncontrollable rising commodity prices, allowing the poorest to buy basic commodities and social investments.

15 Years Later: The Jubilee Movement

By Mac Krzyzewski 

In his most recent  “Poverty Matters” blog post for The Guardian, Jonathan Glennie writes about the “extraordinary successes” of the Jubilee Movement since its creation in 1996. The movement’s popularity stems from successful protests in the late 1990’s, including one in Cologne, Germany where a 24 million signature petition was handed to the G8. 

“There are many reasons why the Jubilee movement is so special for so many of us. First, it worked. For many years the economists of the World Bank and the British treasury had told us that debt simply could not be cancelled. It was a moral hazard. There were rules. But they hadn't reckoned on the moral power of the human chain around the Birmingham G8 in 1998, chanting for debt cancellation – famously audible to the negotiators in their conference rooms. When debt cancellation finally became a reality for some countries, it led to increased spending on health and education, saving and improving millions of lives.”

Jubilee Deputy Director Speaks Amongst Anti-Poverty Leaders

                   Panelists: Arthur Keys, Katherine Marshall, Rev. Linda Lader (moderator),                    Melinda St. Louis, David Beckman. 

Last Wednesday, our deputy director, Melinda St. Louis, was invited by YaleDivinity School to discuss poverty reduction as part of the school's 40-day "Mobilizing Faith, Fighting Poverty" initiative. She served on a panel with Arthur Keys, President and CEO of International Relief and Development, Katherine Marshall, Executive Director of the World Faiths Development Dialogue of Georgetown University, and David Beckmann, President of Bread for the World. Senator Chris Coons of Delaware, a Yale Alumnus, gave the keynote address.

"Melinda St. Louis, deputy director of Jubilee USA, which rallies people of faith to advocate debt relief of poor countries, shared details of a petition now circulating that calls on President Obama and the U.S. government to "lead global efforts to transform the global economy, recognizing our responsibility as our sisters' and brothers' keepers." The "1,000 Faith Leaders Initiative" hopes to secure the signatures of 1,000 religious leaders by June. The petition says we must "repair the historical injustices that impoverish the poorest and enrich the wealthiest" and "work to end the cycle that leads to debt crises. "

Click here to read the rest of the article. 

Photo by Aubrey Gemignani courtesy of Yale Divinity School. 

International Women’s Day - A Chance for Jubilee Justice

By Julia Dowling

International Women’s day always makes me feel torn.  On one hand, one day set aside for global recognition of the contributions made by and challenges facing  women and girls has never seemed so critical.  There seems to be a war on women everywhere: sexual health services are being cut in the United States while the war in the Democratic Republic of Congo rages on, where 15,000 women were raped just last year.  But on the other hand, I often think “shouldn’t every day be international women’s day?” 

Goal three of the Millennium Development Goals (MDGs) aims to do just this – make every day a day for women by eliminating gender disparity and empowering women.  The goal is to “eliminate the gender disparity in primary and secondary education preferably by 2005, and to all levels of education no later than 2015.”  The United Nations highlights education as the key to empowerment for girls and women, both in a traditional sense of schooling but also through wider educational efforts to inform men and boys of gender issues and increase gender sensitivity.

How is this relevant to Jubilee’s work though?  Well, debt cancellation plays a critical role in helping to achieve Millennium Development Goal #3 through dramatically increasing access to basic education.  Before the debt cancellation arrangements of 1999 and 2005, many poor countries were forced to charge school fees for primary education by the International Financial Institutions.  When push came to shove and poor families could afford to send just some of their children to school, the boys were often selected over the girls to attend primary school.  Thanks to such school fees, a whole generation of young and promising girls lost their chance to attend school because the education of their male counterparts was deemed more valuable. 

Even after these deplorable conditions were lifted thanks to global outcry, impoverished governments had little extra revenue to spend on education after paying huge sums of debt service to international creditors.  Debt cancellation meant that school fees were removed and resources once used to pay debts were freed up to be used toward the health and education sectors. 

In Tanzania, children attending school increased by 50%.  The country was able to build nearly 2,500 more schools and hire 28,000 more teachers.  Children passing primary school increased from under 20% to over 40% within four years after the country received debt cancellation. 

Just as debt cancellation isn’t Jubilee’s only concern, MDG #3 won’t be achieved simply by increasing women and girl’s presence in the classroom.  Broader economic justice reforms are necessary if we want to truly change the structures that cause gender disparity and sexism.  This means changing the international financial system to include the most vulnerable people, especially women from the Global South.  On all levels, we need to confront the biases that hold women back from receiving the health, education, and employment opportunities they deserve. 

This year’s annual Ecumenical Advocacy Days conference focuses on Women and Gender, and just how we can achieve MDG #3.  Join us from March 25-28, where Jubilee will join partner organizations and more than 800 activists from across the country to explore ways to bring economic justice, education, and health to billions of vulnerable women around the world.

Images Courtesy of UNICEF and End Poverty 2015

Tax Evasion: How the Poor Pay for the Powerful

 

Ghanian Shop Owner Marta Luttgrodt pays more actual income tax for selling SAB Miller beer than the entire multinational corporation     

By Raina Davis and Katherine Philipson 

In his State of the Union Address last month, President Obama expressed concerns about the effects of tax evasion on American small businesses. He stated, "Over the years, a parade of lobbyists has rigged the tax code to benefit particular companies and industries. Those with accountants or lawyers to work the system can end up paying no taxes at all. But all the rest are hit with one of the highest corporate tax rates in the world. It makes no sense, and it has to change." 

Around the world, corporate tax evasion unfairly shifts the burden of taxation onto small businesses and individuals, and limits governments’ revenue to spend on necessities and development. In the United States, two-thirds of American corporations paid no income tax at all between 1998 and 2005. 

Poor Countries in the Red and Trying to Fix their Green Problems

By Raina Davis

In his monthly Deep Green Column for Greenpeace, Rex Wyler argued against a plan presented by executives at the World Economic Forum to increase international debt by 100 trillion US dollars. He discussed the human and ecological implications of extended debt, especially in developing countries, and the injustice of large banks profiting from loans based on synthetic currency, money essentially created "out of thin air."

By loaning currency rights to national treasuries, the bankers create $100 trillion with a few computer keyboard strokes. Then, they loan the fabricated money, collect interest payments and demand the principal back in real money from the debtors. Interest payments alone on $100 trillion debt (at a modest 5% annual rate) comes to $400 billion a month.

The Global Call for International Debt Court Raised at World Social Forum

As tens of thousands activists gather at the World Social Forum in Dakar, Senegal a new international campaign has launched to combat the global debt crisis.  Defuse the Debt Crisis calls on current G20 Chair, French President Nicolas Sarkozy, to establish an international debt court to prevent the global economic turmoil that results from countries defaulting under unsustainable debts.

Jubilee USA, along with many of our global partners, has endorsed this campaign, as it shares the objectives of our own work on establishing a Fair and Transparent Arbitration Process (FTAP).  The new campaign outlines their priorities and end goal:

“We advocate the creation of a permanent court to ensure a greater coherence and predictability, but see that ad-hoc arbitration courts could be a first step which leads to a more formal institution later on.” www.defusethedebtcrisis.org

This launch is an exciting moment that demonstrates the global energy around the issue, and Jubilee looks forward to working closely with the campaign in the near future.  Join with others around the globe and write to French President Sarkozy, urging him to support and fair and transparent international debt court here!

Photo taken at the World Social Forum where Jubilee Executive Director, Eric LeCompte, participated in the launch of a global campaign for an international debt court to resolve country debt crises – the group of partners working on these issues seen here.

Vote No on Energy Apartheid

By Julia Dowling

U.S. tax-payer dollars could potentially fund the construction of the world’s third largest coal-fired power plant in South Africa, the second project of its kind in South Africa in a year. Soon, the United States Export-Import Bank (Ex-Im) will vote whether or not to make a loan to South Africa’s state-owned utility, Eskom, to continue construction of the plant, called Kusile. A yes vote would increase South Africa’s debt burden, contribute to climate catastrophe, endanger local health, and produce power for South Africa’s multinational corporations at the expense of the poor. 

At 4,800 megawatts, the behemoth Kusile will have serious ramifications on South Africa’s poor and the global environment.  In South Africa, the plant will require 2,470 acres of land to house its toxic coal ash dump, siphon away 1 billion gallons of water annually, and will displace 300 local residents. On a global scale, the plant will dump 36.8 million tons of carbon dioxide into the atmosphere each year increase South Africa’s contribution to global greenhouse gas emissions by 9.7%.