Blog the Debt

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

Stand Up & Be Counted

By Hayley Hathaway

Stand up. Get up from your chair, your sofa, the floor, or your bed right now. 

Now imagine 117 million people all around the world, on every continent, standing up at the same time. This weekend, that’s what’s going to happen.

More than one hundred million people are taking a stand this weekend against global poverty as part of the Stand Up and Take Action Days. While many of us work on poverty issues everyday, talk about it at home and in our communities, once a year we have the opportunity to literally stand in solidarity with people across the world at the same time – all people who care about ending poverty once and for all.

Almost 10 years ago, world leaders committed to a bold roadmap to end global poverty and its root causes – beginning with achieving the Millennium Development Goals which include eradicating extreme poverty and hunger, improving maternal health and ensuring environmental sustainability by 2015. This weekend we are all coming together because we know that despite the gains we’ve made, the global economic crisis is threatening our progress.     

At Jubilee USA Network, our almost 100 Stand Up events across the country are focusing on one part of the poverty puzzle: debt cancellation and responsible lending. Without debt cancellation, we will not reach the Millennium Development Goals in time. Right now the world’s poorest countries pay rich creditors more than $100 million in debt payments everyday. Can you imagine if this money went toward shelter, education and health care?  

We know that it is possible. Debt cancellation has already brought increased education, healthcare and vital social services for many countries in Africa and Latin America. But too many needy countries have been left out.

This weekend, churches, synagogues and community groups will by taking the Stand Up Pledge to reach the Millennium Development Goals by 2015. They’ll also urging Congress to support the Jubilee Act, a bill which calls for expanded debt cancellation to help all the poor countries that need it to reach the MDGs.

This weekend, all over the world we are going to pledge our commitments to fighting global poverty. Let's continue to work to break the chains of international debt.

To learn more about Stand Up and to find out how YOU can stand up, visit www.jubileeusa.org

The Sumatra Earthquake: A Humanitarian Crisis

By Kristin Sundell

On September 30^th, a 7.9 magnitude earthquake devastated western Sumatra, killing upwards of 3,000  people.  Hundreds of schools were flattened along with tens of thousands of other public buildings.  In Padang, a city of 900,000 people near the epicenter of the earthquake, nearly all of the buildings were damaged and roughly a quarter were demolished.

Indonesian government officials have estimated that at least $600 million will be needed to repair basic infrastructure damaged by the earthquake.  Countries around the world have pledged and sent humanitarian assistance, but it is not enough to enable Indonesia to rebuild.  Meanwhile, Indonesia continues to send almost $9 billion every year to foreign governments and international financial institutions in payment on its foreign debt.

West Sumatra sits on one of the world’s most volatile fault lines, the same one responsible for the tragic earthquake and tsunami of December 2004, which killed over 200,000 people in 11 countries.  Geologists say that the region will experience an even deadlier earthquake in the coming years.  It is essential that the necessary resources are invested now to ensure that homes and public buildings can withstand future earthquakes.  Jubilee colleagues in Indonesia, including the Koalisi Anti-Utang (KAU/Anti-Debt Coalition) are calling on the Indonesian government to reallocate the money currently slated for debt repayment to finance reconstruction and to prepare for future disasters.  They are also urging the Indonesian government not to take on new loans to finance disaster response.  According to KAU Chairman Dani Setiawan, “Addition of new debt will only add to the burden on the state budget and preserve creditor intervention in economic policy making and Indonesian politics.”

When we hear of a natural catastrophe somewhere in the world, our first impulse is often to pull out our wallets.  Direct assistance to western Sumatra is definitely needed, but as Jubilee activists we must also amplify the voices and support the calls of our Southern partners by advocating for change in our government’s positions.  At minimum, the United States should support the complete suspension of Indonesia’s international debt payments until the country has fully recovered from the September 30 earthquake.  All international assistance in response to the disaster should come in the form of direct support or grants rather than additional loans. 

Beyond the current humanitarian crisis, Indonesia’s debt should have been cancelled long ago on grounds of odiousness.  Indonesia’s tremendous debt burden dates back to the brutal and corrupt Suharto dictatorship.  According to a 1997 leaked World Bank memorandum on corruption in Indonesia, World Bank resident staff believe that at least 20 – 30% of Indonesian development budget funds were siphoned off into the private accounts of the Suharto family and other government employees.  The memo also states that World Bank controls had “little practical effect” on such corrupt practices.  Despite these findings, the lending continued and the odiousness of Indonesia’s debt has never been addressed.   

Same Game, New Rules

By Julia Dowling

During the G-20 meetings in the spring, the IMF received a massive infusion of cash as a solution to the disproportionate affect the economic crisis is having on poor countries.  In response to this and the current World Bank/IMF meetings in Turkey, our colleagues at Eurodad have produced "Debt in the Downturn," a report with worrying conclusions.

28 countries now have “unsustainable debts,” meaning they do not have a large enough GNP pay their monthly debt bills.  The United Nations Conference on Trade and Development has an even darker outlook: 49 of the poorest countries in the world are showing serious signs of debt distress, and are at risk for a renewed debt crisis like that of the 1980s.  All this comes just as the World Bank and IMF are increasing their lending to middle and low income countries.

It’s become quite clear from the global economic crisis that it was irresponsible lending that got us into trouble, so why are the most powerful countries counting on more IMF and World Bank loans to bail us out?  Yes, these loans do put more money right now into the hands of governments hurting the most, but the long-term harm coming from deep indebtedness is simply not worth the benefits.

 

How did the G-20 excuse their decisions despite civil society’s clear objections before, during, and after the summit?  The Eurodad summary explains that, “To justify its stepped-up official lending programme, rich country governments have pressed the World Bank and IMF to re-write their rules on debt sustainability.”  Instead of addressing root causes of poverty and indebtedness of poor countries, the G-20 put a big, $500 billion bandage on the problem. 

Instead, the US should treat the cause of the wound by demanding real World Bank and IMF reform. We want a new game, in which everyone wins.  In this way, we might be able to both prevent a renewed debt crisis and fix the problems we’ve set out to fix—crushing poverty only made worse by the economic crisis.    

 

To read the full report, go to Eurodad’s website.

Jubilee Hits the Town in Pittsburgh

Been sitting on the edge of your seat reading about the G-20 Summit this week? If so, you've probably seen mention of the Jubilee USA team in Pittsburgh, spreading the word about the importance of Global South voices in the debate over the global economic system.

Check out the news so far:

• "IMF Chief Urges More Aid for Poor Countries"* By Harry Dunphy, Associated Press, September 12 *This article was taken from Nola.com but has also been featured in the Taiwan News, AOL Australia News, and The Economic Times in India
• "Sunday G-20 Forum: Lift the debt burden on poor countries" By Reverend John Welch and Ruth Messinger, featured in the Pittsburgh Post-Gazette September 20
• "Permit snafus strike first marches: Demonstrations for jobs and the poor begin the week's protests" By Ann Rodgers, Pittsburgh Post-Gazette, September 21
• "G-20: The Global South Is Too Big To Fail" by Hayley Hathaway, writing for Sojourners God's Politics Blog, September 22
• "The G20 Must Wake America Up" By Kevin Gallagher, The UK Guardian, September 24
• "Protesters to leaders: Stay true to Africa" By Karamagi Rujumba, Pittsburgh Post-Gazette, September 25
• "G-20 and the World's Poor" Mark Leon Goldberg, UN Dispatch, September 25

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