EDITORIAL A global economy crying out for
balance
Their mission is cancellation of the poor nations debts. Yet
the worlds Catholic relief agencies, in pushing the commercial banks and
international financial institutions on debt relief, have embarked on something
far more significant.
Intended or not, these Catholic agencies are midwives to the first
global opposition party in a world where the only prevailing
government is that of economic power. These Catholic agencies are
participating in the cranking up of a sort of Judeo-Christian miracle machine
called Jubilee 2000. The principle of Jubilee in the Hebrew scriptures declares
the moral conviction that debts should be forgiven before people are driven to
misery and hopelessness.
For Christians, forgiveness is a central tenet.
Admittedly, in the practical world of global economics, a roster
of supporters and endorsers rarely means much. Nonetheless, Jubilee 2000
marshals some heavyweights: John Paul II, the Latin American Catholic bishops,
the Anglicans in Britain. In the United States, those joining with Catholics in
the effort include Episcopalians, the Evangelical Lutheran Church in America,
the Islamic Society of North America, Mennonites, Methodists, Presbyterians,
United Church of Christ members.
They all want concerned people to sign a petition and get
involved.
These very same agencies are also representative of a new type of
global solidarity tying together North, South, East and West, as well as the
rich world and the poor world.
In concert, therefore, these religious and humanitarian
organizations are giving the poor their universal voice. Seen in that light,
debt relief becomes simply the first item on the agenda of the poor people of
the world.
How did we get into all this? Well, commercial banks and
governments behaved irresponsibly, knowing that in all likelihood the
international financial agencies would bail them out.
It began with the oil embargo in the 1970s.
Oil prices shot up. The oil producing countries suddenly had
zillions of dollars they didnt know what to do with. Inflation set in
worldwide. Interest rates skyrocketed beyond usury.
The oil money flooded into where the interest rates were highest.
U.S. Government Treasuries were paying 14 percent -- guaranteed.
When the oil money was deposited with banks and government
treasuries, the new holders of the cash had a problem -- now THEY didnt
know what to do with it.
So they did what banks and similar institutions always do -- they
loaned it out. Or loaned it to those who loan it. The lenders then loaned it to
those who needed it most. The poor. The only problem with loaning money to very
poor people or poor nations is that theyre precisely the ones who
dont have the money to pay it back.
So, when you lend money to poor nations or poor people its
essential to get the highest interest rate possible -- after all, theyre
a risk. And its essential to make sure the interest rate is adjustable,
like a home equity loan, so that if the general interests rates rise, you have
even more money coming in. They borrowed the oil money, the interest rates
rose, theyve already paid many times more money back in interest than the
original loan and they still havent paid off the loan.
The result? Ten years ago, Jean-Marie Fardou of CIDSE told NCR
that Zambia had one of the highest primary school attendance rates in Africa.
Now, because of public expenditure reductions imposed to service the debt,
fewer than half of Zambias children are in school.
How do the commercial lenders get paid when governments of poor
nations are economically strapped? The nations have to borrow more. In order to
do that, the lending agencies -- IMF, the World Bank, you know who they are --
come up with a set of rules to ensure repayment.
Meanwhile, the IMF rules are so strict that what little money was
being spent on rudimentary health care, elementary education, and minuscule
social services and infrastructure building disappears.
It goes to servicing new debt.
The other option is to allow outsiders to come into the poor
country with their money, buy up what they like and take their money and the
poor countrys money with them when they leave.
The global economy.
Zip goes the local economy.
The previously existing little local economy, which once involved
the poor people themselves, is also thrown to the wealthy wolf who has come in
to buy up the poor countrys assets (telephone systems, mineral rights,
forests) on the cheap.
The situation is untenable. The worlds capitalist
governments know it. The only remaining question is how to fix it. Debt
forgiveness makes sense, even to many capitalists. Todays debtors, once
freed, are tomorrows customers.
Presuming the Jubilee 2000 scheme works and the poor nations
debts are forgiven or considerably lessened, what then? For starters, the poor
nations might realize that in harmony with the First Worlds religious and
nongovernmental organizations there is in the making an extremely potent way of
redressing wrongs.
Suddenly highly visible and politically sophisticated people in
poor and rich countries in unison will perhaps demand a seat at the World Trade
Organization table -- and get it. Perhaps they will successfully demand new
international standards regarding investment in poor nations. Perhaps they will
successfully demand more protection for local economies. And perhaps, before
any more wealth is drained from the poorer countries, some balance will be
brought to the new politics of global money.
National Catholic Reporter, May 1, 1998
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