wfn.org | Address by the Archbishop of Cape Town, Part 2

[a.whitefield@quest.org.uk]

April 25, 1997
ANGLICAN COMMUNION NEWS SERVICE
Canon Jim Rosenthal, Director of Communications
Anglican Communion Office
London,UK

[97.4.4.8]

Address by the Archbishop of Cape Town,
The Most Reverend Njongonkulu Ndungane,
at Southwark Cathedral,
Thursday, April 24, 1997

Seizing the new Millennium:Reshaping the World's Economy (Part 2)

 The situation in which developing countries find themselves is
abhorrent, one that cannot be acceptable to Christendom.  Just as
apartheid was unacceptable while some continued to justify it by the
misuse of scriptures, so the mounting debt of developing countries, and
the refusal to cancel this debt, cannot be justified. The famous
theologian, Karl Barth, once said to a well-known South Africa Dutch
Reformed Church theologian, at the height of apartheid, that he wondered
whether he and his colleagues were free enough to interpret the Gospel
faithfully, and as the Holy Spirit might reveal it to them. The
theologian, whose Church gave scriptural justification to apartheid,
said he believed he was free.  But Barth replied: Yes, but some day, you
will discover an understanding of the Gospel that is not in accord with
your family and your friends understanding.

God, through Jesus Christ, and in the power of the Holy Spirit, reveals
himself increasingly to us as our world unfolds. Even those in the Dutch
Reformed Church came to realise that apartheid was a heresy. Similarly,
it took many years for the Church and society to realise that slavery
was a denial of human rights. It was only when people such as William
Wilberforce began campaigning for the abolition of slavery that the
Church and governments  began to understand that it was an inhumane
practice. This led to it ultimately being outlawed. In the same way, God
will so transform our hearts and minds that we too will come to an
understanding that it is morally, ethically, and economically unjust to
perpetuate the world's present economic order in which developing
countries are ground into subservience.

In some cases these debts were incurred by colonial governments; in
others by corrupt independent governments; and in other cases, by
oppressive illegitimate governments.

South Africa is a prime example of a country that has had governments
that systematically oppressed the majority of its people. In 1973, the
United Nations began to describe apartheid as a crime against humanity.
Nevertheless, the international financial community, aided and abetted
by the Nationalist Party government, continued to make  loans to
Pretoria, particularly in the critical 1980s,  for which the new
government is now held responsible. Clearly such loans were not in the
interests of the majority of the people of South Africa or in the
interests of the people of sub-Saharan Africa, who were also affected to
a greater or lesser extent by the grotesque policy of apartheid. From a
Church perspective, it should always be remembered that apartheid was
declared a heresy because it flew in the face of our belief that every
person is made in the image of God.

We are, of course, all conversant with the fact, also expressed in
scriptures, that one has to repay debts that have been incurred. As a
general guiding rule and principle, one can have little argument with
this. When we think of debt, we tend to think of our own personal debts,
our mortgages and outstanding loans. But there are striking differences
between the nature of our personal debts and the debts owed by sovereign
governments.

The main difference is this: in the case of personal or commercial debts
our domestic bankruptcy laws enable us to draw a line under the debts,
and bring them to an end. This line protects creditors from lending to
bad debtors D but it also protects debtors from falling into the abyss
of debt. Bankruptcy is a way of recognising that debt can destroy the
lives of debtors, and so a line is drawn under a certain level of
indebtedness. However, no such line can be drawn in international law.
Where the debt has been incurred without the concurrence of the debtor,
or where the debt has been allowed to grow to such a size that it
becomes a laughable proposition to suggest that it can ever be repaid,
then a reshaping of the world economy is required.

South Africa labours at present under a debt of R311-billion or
US$70-billion. Interest repayment alone on this amount is the second
highest expenditure after education in South Africa's current budget. It
should be clear to anyone that no country can be expected to achieve
economic miracles when restricted by such a yoke. If this is the case
with South Africa, which has a well developed infrastructure, I leave it
to your imagination as to how much worse is this scenario in
less-developed countries.

As we approach the new millennium,  the time has come to invoke the
Doctrine of Odious Debt. This doctrine, which was first used almost 100
years ago by the United States, argues that where a debt has been
incurred which is not in the interests of the State, but to strengthen a
despotic regime, to repress the population that fights against it, etc,
then it becomes odious to the population of the State. The debts of
developing states which have arisen as a result of bad lending policies
by the developed world, should be declared odious and written off. In
the case of South Africa, its foreign and domestic debt was incurred, by
and large, under the apartheid regime, and should similarly be declared
odious and written off. In terms of debt repayment this would mean that
we would have a massive R39-billion per annum which would be available
for social reconstruction and development. This is a large sum which
could be made available to a people who laboured for so long under an
oppressive regime. What is more, the multiplier effect of making such an
amount available to a country that has often been described as the
economic hub of sub-Saharan Africa cannot be gainsaid. Many countries in
the region would stand to gain as a result of this. Of course, the
multiplier effect would also apply if the debts of other countries in
the region were similarly written off in terms of the creation of the
international agency I will presently propose. 

And while I have suggested that the sums owed by poor countries are
large they are, when measured against the capital that flows in and out
of the City of London each year, the small change of the international
financial exchanges.

In case you think I am being too radical, let me remind you that
Britain's Finance Minister, Kenneth Clark, has been reported as saying
that he is prepared to increase the slice of outstanding loans that can
be written off, currently fixed at 67%, to 80 or 90%. If Britain's
Finance Minister is prepared to go this far, what is to stop it going
the whole way? If a major country like Britain is prepared to do this,
what is to stop other major industrial countries from doing likewise?
What is of concern, however, is that a number of lenders, in particular
Japan, have refused to offer anything more than the possibility of more
generous relief on a case by case basis. Furthermore, while Britain may
declare itself prepared to increase the percentage of loans that can be
written off, I have not to date read of reports that the country has
actually written off substantial debts of developing countries.

Lest I be accused of wanting sacrifices only from the industrialised
nations, let me point out that earlier this year South Africa wrote off
Namibia's debt to it, believing it effectively to be an odious debt
incurred while Namibia was illegally occupied by the apartheid
government.

In any event, the day will come, as Unicef said two years ago, when the
progress of nations will be judged not by their military or economic
strength, nor by the splendour of their capital cities and public
buildings, but by the wellbeing of their peoples: by their levels of
health, nutrition and education; by their opportunities to earn a fair
reward for their labours; by their ability to participate in decisions
that affect their lives; by the respect that is shown for their
political and civil liberties; by the provision that is made for those
who are vulnerable and disadvantaged; and by the protection that is
afforded to the growing minds and bodies of their children We can
identify with this as a Church fully, not just because these are good
values and results for which to strive, but because this is consistent
with the biblical vision of Jubilee D of a world where injustices are
set right and the terrible poverty which we see portrayed on our
television screens and in our print media is diminished and, ultimately,
eradicated. The Jubilee vision is spelt out in Leviticus 25:8ff and its
underlying theme is to cancel all debts. Consecrate the fiftieth year
and proclaim liberty throughout the land to all its inhabitants. For it
is a jubilee and is to be holy for you; eat only what is taken directly
from the fields. Do not take advantage of each other, but fear your God
(vs 10, 12 and 17).  We see the same strands of wisdom in Deuteronomy,
in the first two verses of chapter 15: At the end of every seventh year
you are to cancel the debts of those who owe you money. This is how it
is to be done. Everyone who has lent money to a fellow Israelite is to
cancel the debt; he must not try to collect the money; the Lord himself
has declared the debt cancelled When debt is so severe that the poor and
their rulers are prepared to mortgage the very tools of their
livelihood, then a line must be drawn under the debts and the poor must
be prevented and, in partnership with them,   helped from falling deeper
into the abyss of debt.

Cancelling the debt of developing countries should thus not be done
without establishing a mechanism for its control and some important
principles that will determine future economic relations between the
rich and poor, thus contributing to peace, stability and prosperity.

I therefore propose the establishment of a Mediation Council, whose
responsibility will be to negotiate the repudiation of debts of
developing countries. Such a council should consist of four  parties,
namely an independent international body,  a similar regional body (for
example, in the case of Africa, the OAU), the International Monetary
Fund, and the country concerned. In addition, I propose the adoption of
the following principles, at least:

1.  No country should be permitted to borrow more than a fixed
percentage of its GNP without first going to its people, for example in
a referendum, to obtain their approval. In this way, people and
communities would be able to contribute to national debates as to
whether they wish to incur international debt.

2.  No debt should be incurred for the purposes of military expansion or
arms purchases of any nature whatsoever or for maintaining oppressive
governments that violate fundamental human rights.

3.  Should a country expand its armed service or military capacity to
the detriment of the development of its people, the international
community should immediately cease all loans.

4.  Preference should be given to making loans to countries which have
illustrated good stewardship in the use of their resources and in the
involvement of their own people in their socio- economic development and
the creative involvement of foreign investors.

5.  Preference should be given to countries that need loans for health,
education, social services, infrastructural development and the like.

6.  The rape of the environment, or the denial of human rights, by any
country should disqualify it from receiving loans.

7.  A country which has shown a commitment to democratic government and
regular free elections should receive preferential treatment in
receiving loans.

8.  Countries receiving loans from any international financial
institution or commercial bank should submit themselves to a strict
monitoring and accountability process so that if it is found that debt
relief is being used for military or other purposes that do not advance
the socio-economic development of people, the loans be suspended.

9.  This  monitoring process must ensure that where a debt has been
cancelled, any provision that would have been made to service the loan
had it not been cancelled, must be redeployed for the development of
people and infrastructure.

The danger of such principles is that where a government ignores them,
and has its loan called in, it is once again ordinary people who suffer
its consequences. In such cases, the full weight of the Mediation
Council and the international community should be brought to bear on the
recalcitrant government, in much the same way as the apartheid regime
was brought to its knees by international pressure.

Perpetuating the status quo cannot achieve the development needed in our
village in the next century. It will make poor countries poorer, and
rich ones richer, with all the resultant threats to world peace that
this involves. We must create models of hope that will give the vast
majority of people in the world a new chance.  We have a responsibility
as we prepare for the next millennium, in our global village, to ensure
that all people have the same opportunity to reach their full potential.

For this is a kairos moment: we are at the doorstep of the next one
thousand years in the history of humankind. The first Christians stood
on the threshold of the first millennium in a state of hopelessness
after the Crucifixion of Christ. But God raised him from the dead: hence
our age is an age of new beginnings, an age of the Resurrection faith.
It is applicable to everyone, from the multi-nationals of business, to
the multi-nationals of the Church. The opportunity to start anew must be
seized. Through an act of immeasurable power and grace, let us grasp the
nettle and reshape the world's economy.

In this way the third millennium can be a Jubilee celebration and the
Risen Lord can help us understand his proclamation Behold I make all
things new and challenge us to join him in bringing new life and new
hope to a dying world.