Below is the editorial by Sahib Mustaqim Bleher in issue 29 (Turn of Millenium Issue) on the topic of:

Jubilee 2000 - no cause for celebrations yet

In this last issue of Common Sense before the turn of the "millennium" we want to highlight the plight of debt which burdens the third world, and a great number of Muslim countries amongst its members. Jubilee 2000, a campaign borne from the reading of Biblical scripture, namely Leviticus 25, which demands a regular forgiveness on debt, very much like the Qur'an in verse 280 of Surah al-Baqarah: 

"And if the debtor is in hardship, give him time until he is at ease, yet if you forgive the debt in charity it is better for you."

The campaign was surprisingly successful in an environment dominated by multinationals and banks. Even President Clinton pledged to forgo the $6 billion owed to the United States by the poorer nations of the world. That 

"the poorest may now start the next millennium unencumbered by debt", 

as Will Hutton put it in The Observer. Most of the debt is owed to private finance institutions, and the US governments generosity may well have been motivated by the intention to let those privately owned lenders off the hook. According to a UN report at the end of 1997, the total external debt of the world's poorest nations stood at 2.2 trillion US dollars, 31% of which was owed by Asia and Latin America, 16% by Africa, and 18% by Europe and Central Asia. Their debt had risen a multiple of Clinton's "gift" within a single year. UN General Secretary Kofi Annan noted that for many of the "Heavily Indebted Poor Countries" the "debt stock to export ratio" amounted to well over 300 percent, and urged Western donors to convert all their emaining ofrficial debt owed by the poorest countries into grants.

Jubilee 2000 lists the following countries as needing complete debt cancellation as well as additional aid: Bangladesh, Burkina Faso, Burundi, Cambodia, Chad, Congo DR (Kin), Ethiopia, Gambia, Haiti, India, Kenya, Lesotho, Madagascar, Malawi, Mali, Mozambique, Nepal, Niger, Nigeria, Rwanda, Sierra Leone, Somalia, Sudan, Tanzania, Togo, Uganda, Viet Nam, Yemen.

A larger list of the 93 poorest and most indebted countries includes: Algeria, Angola, Argentina, Bangladesh, Benin, Bhutan, Bolivia, Brazil, Burkina Faso, Burundi, Cambodia, Cameroon, Cape Verde, Central African Republic, Chad, Chile, china, Columbia, Comoros, Congo (Bras), Congo DR (Kin), Djibouti, Dominican Republic, Ecuador, Egypt, El Salvador, Eq Guinea, Ethiopia, Gabon, Gambia, Ghana, Guatemala, Guinea, Guinea-Bissau, Guyana, Haiti, Honduras, India, Indonesia, Ivory Coast, Jamaica, Jordan, Kenya, Laos, Lesotho, Madagascar, Malawi, Malaysia, Maldives, Mali, Mauritania, Mexico, Mongolia, Morocco, Mozambique, Myanmar, Nepal, Nicaragua, Niger Nigeria, Pakistan, Panama, Papua NG, Paraguay, Peru, Philippines, Rwanda, Samoa, Sao Tome, Senegal, Sierra Leone, Solomon Islands, Somalia, South Africa, Sri Lanka, St. Vincent, Sudan, Swaziland, Syria, Tanzania, Thailand, Togo, Tunisia, Turkey, Uganda, Uruguay, Vanuatu, Venezuela, Viet Nam, Yemen, Zambia, Zimbabwe.

The problem stems from the fact that punitive interest payments on foreign loans - coupled with the fact that interest and loan repayments are to be made in hard currency, further widening the gap between the value of the debtor countries' own currencies and the dollar - have resulted in a constant flow of money from the Third World to the West, with the debt still rising. Western aid payments have simply enabled those poor countries, at the tax-payer's expense, to meet their obligations of repayment which find their way straight into private coffers.

An "external debt tribunal" held in Brazil recently and drawing upon 1200 participants including Brazilian judges and lawyers as well as unemployed city dwellers and the indigenous Patax people from the Amazon, called the debt situation in Latin America unsustainable and declared continuing payment as illegal, as the debt had been fully repaid and was stifling internal development. Brazil is Latin America's most indebted country. Between 1989 and 1997 Brazil paid $216 billion in interest on a debt of $235 billion, yet still owes $212 billion today. The Brazilian lawyer Arstides Junqueira is quoted as saying: 

"Not even in colonial times was there such a flow of capital out of Latin America, a region that now looks like the scene of a world war because of the number of people dying of hunger and preventable diseases."

Jointly, Latin America and Caribbean nations must pay an estimated £123 billion every year in debt service and interest, without reducing the principal.

Meanwhile the debt problem is growing, in spite of Jubilee 2000 and a half-hearted response by governments and their organisations. Saudi Arabia has become one of the most recent victims, as fighting the gulf war has enabled the Western coalition to transform the Kingdom from one which had $170 billion of reserves (1982 figures) to one which now spends about 12 percent of its budget on servicing a debt of almost similar magnitude. Per capita income in Saudi Arabia has plunged from $15,700 in 1980 to $5700 today, and the country is now considering selling off oil exploration rights to foreign companies to help balancing the budget. If this is going to be realised, and there is little doubt that it will, one day Saudi Arabia might itself have to buy oil from a foreign company, which shows the real aim behind the extension of loans by foreign and multinational conglomerates to the resource-rich third world countries: exploitation by stealth. As Brazilian Pastor Jeter Ramalho said at the closing session of the tribunal about the debt and Jubilee 2000: 

"It is not just a matter of forgiving the debt and forgetting about it, because countries would go into debt again. We need to change the financial hegemony that rules the world."

Author: Sahib Mustaqim Bleher

Date Published: Winter 1999/2000

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