The world’s most impoverished countries are forced to pay millions of dollars EVERY DAY to the rich world in debt repayments, while poverty kills millions of their people. Meanwhile, creditors use their power over indebted countries to force them to privatize their services, open up their markets or cut essential spending.
Together we can change this. Already, campaigner pressure has forced rich countries to cancel some debts. But more needs to be done.
No Bottom Line
When individuals become deeply indebted, we draw a line under the debt. That line is called bankruptcy. It is a line beyond which we do not allow people to fall.
No such line can be drawn in international law.
When poor countries become deeply indebted they fall into an abyss of economic degradation. Their governments owe vast sums to Western governments and international, Western-controlled institutions. These same institutions then take on responsibility for determining levels of debt relief.
This is unjust and it is time we did something about it.
In the world’s most impoverished nations, the majority of the populations do not have access to clean water, adequate housing or basic health care. These countries are paying debt service to wealthy nations and institutions at the expense of providing these basic services to their citizens. The United Nations Development Program estimated in 2003 that 30,000 children die each day due to preventable diseases. Debt service payments take resources that impoverished countries could use to cure preventable diseases. Debt cancellation frees up resources to reverse this devastating reality.
Views on Debt Forgiveness found within Spiritual Texts
Texts in both the Hebrew Scriptures and throughout the New Testament call for debt cancellation and the righting of relationships every seven years with a super Jubilee every 50th year.
The practice of debt cancellation can also be found in history among early Pagan kings.
The Qu’ran also challenges debt by harshly criticizing usury.
Results of Debt Cancellation Advocacy
The small amount of debt cancellation given so far has achieved startling results, including more than doubling school enrollment in Uganda, vaccinating five hundred thousand children in Mozambique and adding three more years of schooling for Honduran children.
Ordinary Americans, working with partners around the world, can generate the political will needed to achieve 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, they won’t act unless they think you care.
In 2005, people of faith and conscience worked together to win a promise from the Bush administration, other world leaders, the International Monetary Fund and the World Bank to cancel more than $40 billion worth of debt for 20 of the world’s most impoverished countries. Up to 20 additional countries are eligible to receive cancellation under the 2005 debt agreement.
However many nations, such as Burundi, the Gambia, Guinea, and Haiti are currently facing deadly delays and are tied up in harmful economic policy strings imposed by the World Bank and IMF.
In order for impoverished nations to receive debt cancellation from the IMF, World Bank, and other international financial institutions under the G-8 debt deal, they must first qualify by reaching what is called “completion point” in the IMF/World Bank’s Heavily Indebted Poor Country (HIPC) Initiative.
In order to reach completion point, countries must comply with harmful economic policies dictated by the IMF and World Bank, including the privatization of basic utilities such as water and electricity. These harmful economic policy “strings” delay desperately needed debt cancellation and once they are implemented raise the cost of basic needs beyond the reach of the poorest people in impoverished countries.