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Break the chains: Debt relief would let countries help themselves

By Mei Ling Albert

Recently I attended a workshop about international debt relief and was shocked to learn how this debt is affecting millions of people around the world right now. I was so appalled by the injustice of such a system that I felt I had to share what I learned with everyone who is open to hearing about it.

Most of us know that in the most impoverished nations, the majority of the population doesn't have access to clean water, adequate housing or the most basic health care to treat preventable disease. Children in those countries are dying by the millions.

Most of us feel compassion for these people when their plight is brought to our attention. What most of us don't realize is that these countries are paying unending debt service to wealthy nations and to banking institutions such as the World Bank and International Monetary Fund at the expense of taking care of their people's needs. These countries have paid back their original debts many times over, but accruing interest keeps them forever chained to the debt.

Much of the debt is a result of "bad faith" lending. In the early 1970s, a 1,000 percent increase in world oil prices resulted in huge profits for oil-producing nations - profits that were invested in our banks. Suddenly, the banks had too much money. So money was knowingly and purposefully lent, with low variable interest rates, to any developing country that seemed stable enough to handle it - even to corrupt and oppressive governments, as long as they weren't communistic. The money was often spent on military arms, mostly American-made arms. Large-scale projects were started by American firms, which made a profit even if the projects were never completed. Borrowed money enriched corrupt leaders such as Papa and Baby Doc Duvalier of Haiti. Little of the money was used to help the poor, yet they are the ones who continue to suffer because of the debt.

The sale of cash crops helped pay down the debts of developing nations until the late '70s, when prices began falling dramatically while interest rates began to rise. By the early '80s, interest rates on some loans had risen as high as 27 percent. The debt trap had been sprung. Third-World countries were now earning far less for exports and paying far more on their loans. They needed to continue borrowing to pay their loans.

In 1982, The World Bank and the IMF created Structural Adjustment Programs (fittingly called SAPs) for countries on the verge of defaulting on those loans. SAPs deeply impacted sub-Sahara Africa and has played a major role in the African crises we hear and see on the nightly news, including the AIDS crisis.

SAPs forced most borrowing countries to spend less on health, education and social services. Countries were required to devalue their national currency; to reduce food subsidies, which sometimes caused food prices to soar within days; to privatize public industries, such as energy and water distribution; to allow foreign corporations to set up businesses; and to take over small subsistence farms to create large-scale crop farming for export, forcing small farmers off their family land and into slums surrounding big cities.

In the last 10 years, a new program has been initiated to lighten the burden of debt of some countries: Highly Indebted Poor Countries ( HIPC). To qualify, countries must comply with rigorous economic requirements, like those of the SAP program. It takes years to meet all of the requirements, and many countries that should be on the list are not, such as Haiti, one of the very poorest countries in this hemisphere.

International debt sucks the natural resources out of a country, forcing it to become dependent on international creditors for continued aide and new loans to pay off old debts. Foreign aid is used to pay their debts to the wealthy nations and international banks. The United States gives away a lot of money in foreign aide, yet most of it comes right back to us. Many countries pay more each year in servicing the debt owed us than we give them in aid. It's like trying to fill a bathtub with the drain open.

"Every child in Africa is born with a financial burden which a lifetime of work cannot repay," says the African Council of Churches. "The debt is new form of slavery, as vicious as the slave trade."

For those who follow the Bible, Hebrew Scripture calls for debt cancellation every seventh year, with a year of Jubilee every 49th year (Leviticus 25). Jubilee 2000 was initiated to help countries to break the chains of debt, but the United States and other First-World nations haven't come close to meeting the first seven-year goal. Maybe the Iraq war got in the way.

Debt cancellation would allow countries to use their own resource to eliminate poverty, provide clean water, universal education and health care, and halt the spread of AIDS.

Debt cancellation has had good results in countries that have been given debt relief. School enrollment doubled in Uganda; 500,000 children have been vaccinated in Mozambique; three more years of schooling have been added in Honduras; 1.5 million children returned to school almost overnight in Tanzania; freed up money is being used to fight AIDS and to provide safe water in Burkina Faso.

In 1967, Dr. Martin Luther King Jr. called for "a true revolution of values" that causes us to question the fairness and justice of many of our policies, and said we should "look uneasily on the glaring contrast of poverty and wealth."

"With righteous indignation," he said, such a revolution "will look across the seas and see individual capitalists of the West investing huge sums of money in Asia, Africa and South America, only to take the profits out with no concern for the social betterment of the countries, and say: 'This is not just.'"

It calls for us to lift our concerns beyond our tribe, race, class and nation and embrace unconditional love for all mankind - "that force which all of the great religions have seen as the supreme unifying principle of life." It is summed up beautifully in the first Epistle of John: "Let us love one another, for love is God. And every one that loves is born of God and knows God - for God is Love."

We have a responsibility to change this unjust system. People are dying because of it. These people are far away from us, but we have all benefited from the ill-gained debts that continue to cause abysmal suffering. If we do nothing, we should not be surprised by countries that elect socialist governments to replace so-called democratic governments.

Ordinary citizens like us can generate the political will needed for full debt cancellation. The United States has the most influence of any nation over creditors and international banks. Our Congress could leverage full debt cancellation for impoverished countries. However, it won't act unless it thinks we care.

Initial debt relief has benefited millions of people. Imagine what full debt cancellation could do.

• The author is a Vacaville resident.

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