How to Spell Debt Relief
"The Jubilee movement convinced the world to write down the debt of impoverished nations, but the strings attached provoke fresh debate on economic justice"
Jeff M. Sellers | posted 5/21/2001 12:00AM
A movement that won the support of both U2's Bono and Republican Sen. Jesse Helms must have something going for it. The Jubilee 2000 campaign to cancel the debt of the poorest countries transformed a technical economic matter into a compelling moral issue—one likely to find Christians on opposing sides of an ideological firestorm.
Jubilee succeeded in simplifying a complex issue into a cause regular folks could get passionate about: The debt payments to rich countries that gobble up large portions of poor countries' budgets, making improvements for their people nearly impossible, must be eliminated. Evangelicals across the political spectrum joined the Jubilee 2000 movement with zeal—we're Christians, and forgiving debt is what Christians do, right? That one of the world's first Internet-driven grassroots movements (begun in 1996) had a biblically derived name, based on the jubilee-year freedom and restoration decrees of Leviticus 25, didn't hurt.
Then there was the exhilaration of slinging stones at the giant of international financial institutions. Whereas these institutions had scheduled debt relief for only four countries by the end of 2000, Jubilee succeeded in winning relief pledges for 22 nations, 11 of which held cash savings in hand as a result by the end of 2000.
Like the detailed economic instructions of Leviticus 25, however, Jubilee's initial success has posed some knotty socioeconomic dilemmas. Under what conditions debt relief is to be granted, and whether Jubilee's new goals are in the best long-term interests of the poor, are questions begging more than a simplistic reading of the Bible and anti-globalization Web sites (but see www.oneworld.org and www.debtchannel.org for strong, if one-sided, arguments against prevailing economic winds).
A Qualified Success
Ironically, Jubilee 2000 succeeded in part for the same reason organizers were disappointed and are retrenching for greater battles: the relatively modest level of the write-off. In the world of international lending, $34 billion in debt relief for 22 countries (18 in Africa) doesn't amount to much. The total foreign debt of the 41 poorest nations is more than $207 billion.
Asking rich creditor nations to cancel this mainly "official debt" (owed to governments and international financial institutions) was far from asking them to forgive the more than $3.25 trillion in debt of middle-income countries such as Mexico and Brazil—much of which is owed to private banks less willing to discuss debt write-offs. That is what the Jubilee campaign is eyeing next.
Still, $34 billion in write-offs should buy desperately needed health care and education in African and Latin American countries where the debt cripples those it does not kill—though economists such as Stephen Smith of Gordon College assert that it is grossly mismanaged economies, more than an especially high indebtedness, that render loan repayments such a "crushing" share of budgets.
In any event, creditors never even half-heartedly considered canceling the entire $207 million-plus debt. Originally they intended to forgive $90 billion in debt over six years. The Jubilee campaign wanted cancellation of 100 percent of "crushing" or unsustainable debt—that is, the amount keeping the poor from meeting their basic needs—and applied pressure to raise the debt forgiveness figure to $100 billion by the end of 2000. Thus the $34 billion in debt relief for 22 countries represents about one-third of the target that Jubilee activists settled for.
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