The Jubilee Blog

JUBILEE SOUTH: STOP VULTURE DEBT BONDAGE

From Lidy Nacpil of Jubilee South:
Jubilee South adds its voice to the condemnation of "vulture" firms' despicable manipulation of an already unjust financial economic system.

We denounce G8 governments, the United States and Britain in particular, for allowing these firms to operate in a public legal form, pick up debts claimed from South nations cheaply -- when it goes unpaid -- then avail themselves of the Northern legal system to demand full value plus interest.  The proclamations of G8 leaders in favour of debt relief are rendered even more meaningless by their passiveness in the face of these politically-connected vulture firms in the North.  It is well within their power, after all to enforce the write-off of the same loans.

We commend the campaigns initiated by Jubilee USA and the debt movement in the UK for demanding an end to this particularly predatory form of free market capitalism and private enterprise.

Zambia, Peru, and Congo are the best known cases where these firms have made massive profits by using Northern courts to force impoverished South governments to pay, thereby ensuring that these purportedly legal "investment firms" obtain returns many times larger than their initial investment. In the case of Nicaragua and other countries, the IMF ensures that domestic and international banks be given first claim to alleged debt relief savings, converting the already rich bondholders into the real beneficiaries of such debt relief. This blatant profiteering is symptomatic of a deeper structural disorder.

We remind South governments that it is in their power and indeed their right and moral obligation to end such a cynical example of crony capitalism. We call on them to take immediate and necessary action. South governments should simply dismiss such claims or legal rulings -- repudiating not only the legal manipulation but the entire debt itself on grounds of illegitimacy. These odious practices must be abolished along with the odious debt itself.  Comprehensive and participatory public audits of the debts claimed of South countries would contribute both evidence and heightened public support for such action.

Jubilee South calls on all popular movements and campaigns, North and South, to uphold the right of the peoples of the South to demand cancellation and repudiation of all illegitimate debt.  We must all fight to end to both vulture firms and the vulture system that continues to uphold debt as an instrument of colonial bondage, exploitation and subservience.

Overseers suggest IMF to stop loans to poor countries

Wahyu Susilo, Head of Advocacy and Networking Division, International NGO Forum on Indonesian Development (INFID), in Jakarta alerted us to this story:

WASHINGTON (AP): The International Monetary Fund should stop lending money to poor countries because this overlaps with the work of its sister institution, the World Bank, a high-level review committee said Tuesday. READ FULL ARTICLE

EDUCATE! ORGANIZE! MOBILIZE!

Localize the movements for global justice...HOST A 2007 JUSTICE PROJECT TRAINING!

2007 is an important year for movement building in the United States and around the world.  With the World Social Forum, the U.S. Social Forum, a new Congress, and shifting U.S. foreign policy around the world...

Bring the Justice Project to Your Community or Campus…

* HIV/AIDS * Domestic & Global Poverty * War & Conflict * Access to Water *

It is time to widen the scope of our movement, to connect the dots between local and global struggles for justice, peace, and a more equitable society. A good starting point is to understand the relationship between the policies of the World Bank, the International Monetary Fund and the US government, and critical global justice issues such as HIV/AIDS, environmental justice, gender, immigrant and labor rights, access to essential services, and the inherent unsustainibility of corporate-driven globalization.

Under the umbrella of the Justice Project, the 50 Years Is Enough Network, TransAfrica Forum and the Student Global Aids Campaign, are organizing multiple regional trainings, which will kick-off in mid-March and last until mid-April.  Each will feature seasoned activists from various global justice communities in the US, who will address the underlying role of the U.S. in the world.

• What kind of economic policies does the U.S. promote internationally?
• What is the link between these economic policies and war, disease, and development?
• What does the anti-war community need to know about these policies in order to offer real alternatives?
• How are these policies different or similar to what our national and local governments do right here at home?

Please let us know if you’re interested in hosting a Training stop in your community!

If you’d like to organize such a training or participate in it, contact Ruth Castel-Branco at 202 463 2265 or [email protected]

Beeton: Changes Ahead in Latin America...Decline of the IMF?

Chávez Builds His Sphere Of Influence
Venezuelan Spends to Counter U.S.

By Juan Forero and Peter S. Goodman
Washington Post Foreign Service
Friday, February 23, 2007

CARACAS, Venezuela President Hugo Chávez of Venezuela has long pledged to buck Washington-backed economic policies in Latin America. Now, two months after winning reelection and consolidating his hold on the country with new powers to rule by decree, he is strengthening economic ties in the region in a bid to limit U.S. influence. READ THE FULL ARTICLE

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Follow-Up Letter to the Letter from CEPR to Juan Forero 
From Dan Beeton to Juan Forero, The Washington Post
February 26, 2007

Dear Mr. Forero:

I was pleased to read your article of February 23, "Chávez Builds His Sphere Of Influence." For the first time a Washington Post article addressed some of the epoch-making changes that CEPR has been writing about for several years. The collapse of the IMF's influence in middle income countries -- not only in Latin America -- is the most important change in the international financial system since the breakdown of the Bretton Woods system in 1973.

And the collapse of economic growth in Latin America -- something that CEPR has been writing about for more than 7 years -- is a long-term failure that the region has not seen in more than 100 years. As you know, the region grew by 82 percent per capita from 1960-1980, but only 9 percent from 1980 to 2000, and about 4 percent for 2000-2005. For the first time in the Post, the article explores the possibility that the recent electoral and policy changes in the region might be related to this unprecedented long-term economic growth failure. I hope this is the beginning of a long-needed discussion of what has gone wrong. Not all of the policy changes of the "Washington Consensus" were mistaken, but clearly some need to be re-examined.

If I may offer a couple of comments:

1) I think the article overplays the idea that Chávez is directly influencing economic policy in the region.  For example, it mentions "Chávez's campaign to persuade countries to break with fiscal orthodoxy." I have not seen any evidence of any such campaign. The Venezuelan government has provided credit in various forms to a number of countries, but I have not seen any statements from Chávez or any other Venezuelan officials to the effect that governments should pursue expansionary fiscal policies.

2) "For its part, the United States still has enormous influence in and close ties with most Latin American countries. Free-trade agreements now cover nearly two-thirds of economic output in the Americas, according to Thomas A. Shannon Jr., assistant secretary of state for Western Hemisphere affairs."

About one-third, or 34 percent, of economic output in Latin America (33 countries) is covered by free trade agreements. If this statement is meant to include the U.S. and Canada, then the number is about 89 percent, but of course this is simply because the U.S. and Canada account for about 84 percent of the output of  "the Americas." *

3) Inflation is not "skyrocketing" in Venezuela. It's 18.3 percent on a year-over-year measure (January), or 13.7 percent on average for the last year. This is higher than the government would like but still below the level that most macroeconomic research indicates could have an adverse effect on growth. 

Finally, I would note that your description of our co-Director Mark Weisbrot as an "analyst supportive of Chávez' policies" is not quite accurate. Weisbrot supports some of Chávez' policies but not others. The ones that he has written in support of, in opinion pieces, have mainly been policies that the Venezuelan opposition also supports: i.e. the misiones, increased access to health care, subsidized food, and education. Weisbrot has commented much more in favor of Argentina's economic policies, for example, than Venezuela's policies. It is not clear why the Post chose to apply a politically charged and somewhat exaggerated label to an independent economist in this case.

Nonetheless, I enjoyed the article very much and am pleased to see The Post beginning to examine these vitally important economic issues.

Sincerely,
Dan Beeton

*If Purchasing Power Parity (PPP) data are used, the numbers are different -- and this could be where Shannon gets two-thirds, but again this would have to include the U.S. and Canada, which on a PPP basis would account for 62 percentage points out of the 67 percent of output under free trade agreements. With PPP data only 15 percent of Latin America has free trade agreements. Either way, the statement from Shannon is misleading.

EVENT ALERT: 02.28.07

Funding Global Health Needs: Will the Global Fund Debt Conversion Make a Difference?

Wednesday, February 28, 2007
2:00 p.m. – 4:00 p.m.

WHERE
The Brookings Institution
Stein Conference Room
1775 Massachusetts Avenue, NW
Washington, DC

Despite recent increases in official development assistance, financing needs for AIDS, tuberculosis and malaria are still lacking.  Health spending on these and other issues remains far lower than required to meet the health-related Millennium Development Goals by 2015.  To address these critical financing needs, many within the international health community are advocating the use of global fund debt conversion, a mechanism designed to convert old government debt into new resources to tackle HIV/AIDS, tuberculosis and malaria. 

On February 28, the Brookings global health financing initiative will host a discussion on the global fund debt conversion proposal and its pilot program, Debt2Health, with featured speaker Ngozi Okonjo-Iweala, Brookings distinguished visiting fellow.  Participants include Brookings scholar Homi Kharas; Paul Zeitz, co-founder and executive director of the Global AIDS Alliance; and Kingsley Chiedu Moghalu, head of global partnerships at the Global Fund to Fight AIDS.  David de Ferranti, director of the global health financing initiative, will moderate this discussion.

After the program, the panelists will take audience questions.

Introduction and Moderator:
DAVID DE FERRANTI, Senior Fellow, The Brookings Institution

NGOZI OKONJO-IWEALA, Distinguished Visiting Fellow, The Brookings Institution

Panelists:

HOMI KHARAS, Visiting Fellow, The Brookings Institution

KINGSLEY CHIEDU MOGHALU, Head of Global Partnerships, Global Fund to Fight AIDS

PAUL ZEITZ, Co-founder and Executive Director, Global AIDS Alliance

RSVP: Please call the Brookings Office of Communications, 202-797-6105, or visit http://onlinepressroom.net/brookings/

Free Film Screening: Monday 2.26.2007

Tadesse Meskela

Black Gold:  The Story Behind Your Morning Cup of Joe

When: Monday, February 26, 6:30 p.m.
Where: Carnegie Institution, 1530 P St. N.W.

Multinational coffee companies now dominate the industry worth over $80 billion, making coffee the most valuable trading commodity in the world after oil. But while consumer continue to pay for lattes and cappuccinos, the price paid to coffee farmers remains so low that many have been forced to abandon their coffee fields. 

So, how does this relate to the debt issue? What would happen if buyers were willing to pay a fair price to Ethiopians coffee growers? Well, for starters these nations would be less dependent on foreign aid/international financial insitutions to finance much-needed services like healthcare, utilities and education.

Black Gold follows Tadesse Meskela as he travels the world to find buyers willing to pay a fair price, and help him save 74,000 struggling Ethiopian coffee farmers from bankruptcy. Against the backdrop of Tadesse's journey to London and Seattle, the enormous power of the multinational players that dominate the world's coffee trade becomes apparent. New York commodity traders, the international coffee exchanges, and the double dealings of trade ministers at the World Trade Organisation reveal the many challenges Tadesse faces in his quest for a long term solution for his farmers.  

After the movie, you can learn more about -- and taste -- fair trade coffee that represents a better deal for farmers and farming communities.  

To help us spread the word about Fair Trade coffee to the people who work with coffee every day, you'll find a set of tickets here that you can use to invite your barista or local grocer to see Black Gold. Even if you can't attend, please take a moment this week to offer a free pass to the person in your neighborhood who sells you coffee. Invite him or her to consider, by watching Black Gold, how conventional trade affects Ethiopian coffee farmers.  

RSVP: 202.872.5321 or [email protected]

SPONSORS: Abol Coffee Inc., Co-op America, Fair Trade Federation, Oxfam America, Sierra Club- DC Chapter

EVENT @ NOON TODAY: Making Debt Relief Stick

Jubilee USA Network and The Center of Concern present:
The Role of Trade & Investment Policies in the Perpetuation of the Debt Cycle in Latin America

WHEN: Friday, February 23, Noon–1:30 p.m.   

WHERE: 1100 15th St. NW, Suite 600  Washington, DC 20005   

SPEAKERS
Patricia Miranda, Fundación JUBILEO Bolivia                              
Georgina Muñoz, Coordinadora de Sociedad Civil de Nicaragua            
Mauricio Díaz Burdett, Foro Social de la Deuda Externa  de Honduras (FOSDEH)

FACILITATOR Debayani Kar, Jubilee USA Network             

In 2005, the Group of Eight decided to cancel the debts of 18 HIPC countries to the World Bank, the IMF and the African Development Bank. Last month, the reduction of debts owed to the Inter-American Development Bank (IDB) by four of those countries in the Latin America region and Haiti were agreed upon by the IDB Board of Governors. Overall, the five countries will be receiving debt relief amounting to $6.5 billion, out of the $15 billion they owed before.

However, the reduction of debt levels is only one side of the coin in the process of reopening development opportunities and enabling countries to improve human development indicators. The framework for trade, investment and fiscal policy in these countries will be largely responsible for whether debt reduction will last and have the desired impact on development and the reduction of poverty, or whether it will soon have to be replaced by new borrowing.

Please join us for a brown bag lunch where representatives from three of the Latin American countries benefiting from debt relief (Honduras, Nicaragua and Bolivia) share with us their practical perspective on the trade and investment reforms that are needed in order to ensure debt relief gains are sustained and used to kickstart a virtuous circle towards the elimination of poverty.

REGISTRATION
RSVP is not required
For any questions contact Aldo Caliari at (202) 635-2757 x 123 or [email protected]
Consecutive translation will be provided.

WHEN: Friday, February 23, Noon–1:30 p.m.   

WHERE: 1100 15th St. NW, Suite 600  Washington, DC 20005   

SPEAKERS
Patricia Miranda, Fundación JUBILEO Bolivia                              
Georgina Muñoz, Coordinadora de Sociedad Civil de Nicaragua            
Mauricio Díaz Burdett, Foro Social de la Deuda Externa  de Honduras (FOSDEH)

FACILITATOR Debayani Kar, Jubilee USA Network             

In 2005, the Group of Eight decided to cancel the debts of 18 HIPC countries to the World Bank, the IMF and the African Development Bank. Last month, the reduction of debts owed to the Inter-American Development Bank (IDB) by four of those countries in the Latin America region and Haiti were agreed upon by the IDB Board of Governors. Overall, the five countries will be receiving debt relief amounting to $6.5 billion, out of the $15 billion they owed before.

However, the reduction of debt levels is only one side of the coin in the process of reopening development opportunities and enabling countries to improve human development indicators. The framework for trade, investment and fiscal policy in these countries will be largely responsible for whether debt reduction will last and have the desired impact on development and the reduction of poverty, or whether it will soon have to be replaced by new borrowing.

Please join us for a brown bag lunch where representatives from three of the Latin American countries benefiting from debt relief (Honduras, Nicaragua and Bolivia) share with us their practical perspective on the trade and investment reforms that are needed in order to ensure debt relief gains are sustained and used to kickstart a virtuous circle towards the elimination of poverty.

REGISTRATION
RSVP is not required
For any questions contact Aldo Caliari at (202) 635-2757 x 123 or [email protected]
Consecutive translation will be provided.

Kibera & Slum Tourism

When Jubilee USA delegation went to Kenya for the 2007 World Social Forum in January, one of the places they traveled to was Kibera.

Kibera, a sprawling 600-acre stretch of land (comparably the size of Central Park in New York City) home to more than 800,000 residents, is often billed as the world’s “largest slum”.

During the tour Jubilee USA delegates spoke with residents, listened to the tour director give Kibera’s history, and learned of what’s being done (and not done) in the settlement to empower its residents.

A recent article was published by Reuters exploring the issue of “slum tourism” and how the people of Kibera and Kenya feel about these tours, or guided excursions, through Kibera. And it’s not just happening in Kenya. For the right price, willing tourists can tour Khayelitsha or Nyanga townships, two of South Africa’s most impoverished areas.

Celebrities and political leaders have toured Kibera, but what’s being done to end poverty and help empower the people who must live there?

Jubilee USA is working to challenge the realities faced by impoverished people living in slums like these by advocating for global economic justice and you can help by getting involved now!

Reuters: “‘Slum tourism’ Stirs Controversy in Kenya”, by Andrew Cawthorne
Tours of South African Townships 
BBC.com: “Nairobi Slum Life: Escaping Kibera,” by Andrew Harding
Carolina for Kibera
The Austin-American Statesman: “Township tourism booming as visitors want to see 'real' South Africa” By Claire Nullis

Kyrgyzstan gov't votes against remaining in HIPC

This is a new story off the AP Wire about Kyrgyzstan, which is currently embroiled in a debate over membership in the World Bank/IMF's HIPC (Highly Indebted Poor Countries) program. Most of the time, as countries wend their way through the HIPC process, they must accept economic/monetary policies from the World Bank/IMF in order to receive debt cancellation (when they reach completion point). Here's an excerpt and a link to the story below:

Kyrgyzstan President Kurmanbek Bakiyev said joining the Heavily Indebted Poor Countries Initiative was promoted by the "corrupt" government of Askar Akayev, who was ousted as the country's leader nearly two years ago.

He said not joining the HIPC — a World Bank and International Monetary Fund program — did not mean Kyrgyzstan would stop receiving aid from international donors, and he said he had called on World Bank officials to make upcoming aid "more effective."

"By deciding to join the HIPC the previous government acknowledged its own weakness, its inability to overcome the crisis our country was in," Bakiyev said. READ MORE

 

What do you think of the Kyrgyzstan government's decision?

JESSE JACKSON: CLIP THE WINGS OF VULTURE FUNDS

Activist Jesse Jackson published an article in the Chicago Sun Times Tuesday, Feb. 20 urging the Bush administration and Congress to stop providing a safe haven for vulture funds, companies that make a profit from cheaply buying the debt of impoverished countries, then suing the country for more than the initial cost of the debt. Jackson names one company that gives heavily to the Republican and Bush cofers.

Jackson writes that because the United States provides a comfortable home for companies that prey make carrion of countries like Peru, the Congo, and Zambia, the U.S. becomes a much-hated hated nation. At the same time the U.S. sends aid, it literally disempowers these developing nations to help themselves.

Here's an excerpt:

They prey upon the poorest nations, taking resources from the most desperate peoples -- billionaire scavengers pocketing the funds that might go to feed children whose families live on less than $1 a day. They are called the vulture funds. They protect their scavengings with fat checks to politicians and lobbyists. One of the leading vulture firms is led by major donors to President Bush. Now it is time to put an end to this disgrace. READ MORE