Salt of the Earth: Jubilee 2000

Social justice news
August 1999

Declaring the jubilee
Archbishop Medardo Mazombwe of Zambia has seen the effects debt has had on the people of his country. In Zambia, every man, woman, and child owes $750 in external debt, a crushing, long-term burden in a country with a per capita annual income of just over $250.

Citizens of some of the world's richest nations are beginning to see the global debt crisis not just as an economic problem but as a moral challenge. As the next millennium races toward us, members of a worldwide movement known as Jubilee 2000 are striving to help impoverished countries climb out of their overburdening debt. The movement takes its cue from a biblical tradition proclaiming every 50 years a Year of Jubilee, or a time when debts are forgiven, slaves freed, and land returned to original owners.

The total external debt of the developing countries is more than $2 trillion; that of the forty-one most impoverished and indebted countries is more than $200 billion. Today's most heavily indebted poor countries are primarily in Africa; their loans come mostly from the U.S. and other governments and from multilateral institutions such as the World Bank, the International Monetary Fund (IMF); and the Asian, African, and Inter-American development banks.

In order to make debt payments, Jubilee 2000 says that many poorer nations shut down health care, education, and other social programs desperately needed in their countries. Ethiopia spends four times more on debt service repayments than on health care, yet 100,000 children die each year from easily preventable diseases. In Tanzania, debt service repayments were equivalent to nine times the government's spending on primary health care in 1997, yet almost a third of the population dies before reaching the age of forty.

The world's wealthiest nations do appear to be listening. In June the Group of Seven (U.S., Britain, Germany, France, Japan, Canada, and Italy) met in Cologne, Germany for a summit at which they agreed to ease the debt burdens of the poorest nations. The proposal calls for the IMF to sell up to 10 million ounces of gold, worth about $2.6 billion, put that reserve in a trust fund, then use the interest to finance lending and debt relief to the Heavily Indebted Poor Countries Initiative, which offers debt relief to more than 40 countries.

However, some economic analysts fear with gold prices at a 20-year low, the IMF sales may hurt the very countries its proposal aims to help. U.S. House Majority Leader Dick Armey and Rep. Jim Saxton introduced legislation in early July that would block the gold sale unless the profits are returned to IMF member states. Congressional approval is needed for the sale according to IMF rules. Jubilee 2000/USA's web site also pointed out some of the shortcomings of the G7 Initiative, saying the wealthiest countries should be able to help more than the 41 proposed nations; that it relied too heavily on the IMF, and that it does not break the cycle between debt and austerity policies.

For more information: Jubilee 2000 and the USCC Department of Social Development and World Peace.

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