wfn.org | Lambeth Plenary focuses on issue of international debt

["Christopher Took" <storm@indigo.ie>]

ACNS LC050 - 26 July 1998

By David Skidmore

Lambeth Conference Communications

Archbishop Njongonkulu Ndungane of Cape Town, primate of the
Church of the Province of Southern Africa, put international debt
on the center stage of the Lambeth Conference Friday by calling
for cancellation of the debt of developing countries.

At a three-hour plenary session for bishops and spouses,
Archbishop Ndungane urged the bishops to follow the Gospel
injunction to "bring good news to the poor" by supporting the
Jubilee 2000 campaign for cancelling $214 billion in debt
burdening the developing world. Inspired by the tradition
reported in Leviticus of holding a Year of Jubilee every 50
years, the coalition of churches and social outreach
organisations is campaigning for cancellation of the debt of the
world's poorest countries by the year 2000.

"It's a vision that releases the poor from the prison of
indebtedness and dependent poverty. It's a vision where God's
people have all that is necessary to live a human life," said
Archbishop Ndungane, who chairs Section One (Called to Full
Humanity), which is studying international debt.

A benefit for all

"The crisis of international debt that we are debating here today
is not just a matter for the poorest countries. Nor is it a
matter that only affects sovereign governments," he stressed. "It
affects all of us everywhere."

Families in the developed world worry about making mortgage
payments, about job security, and the continual erosion of their
purchasing power. But for those in the developing world the
situation is more acute.

"We all live in the grip of an economy which encourages
over-lending and over-borrowing, an economy which drives
relentlessly into debt. But the poorest, those with very little
income to depend on, are not just in the grip of this economy,"
charged Archbishop Ndungane "they are enslaved by it."

As Bishop Nicodemus Engwalas-Okilli of Uganda, another plenary
speaker, said of Uganda, "This small country carries on the head
of her citizens an external and unpayable debt of $3.7 billion.
Every single man, woman and child owes the World Bank $186. We
just cannot pay. And the reason we cannot pay is that we cannot
pay."

Dramatic examples of debts' effects

Archbishop Ndungane said, "We live in a world where the human
family has become increasingly divided" between the haves and the
have nots, he said, asserting that cancelling the debt is a
matter of economic justice. The world worships money, he said,
and in fact, "has more powerful rights than human rights."

Indebted countries are locked into a spiraling debt cycle in
which they must borrow money just to pay for the interest on
their accumulated debt. And when loans prove insufficient or fall
through, these countries use the development aid to pay the
interest. For every dollar received in aid, developing nations
are sending $11 back to the donor countries, said the archbishop,
often in the form of commodities that are given away "virtually
free" for loan repayments.

Bishop Hilkiah Omindo of Mara (Tanzania), who attended the
plenary, said he can appreciate the opposing claims in the debt
debate. "Our country is trying very hard to pay," he said. "We
should pay back, but at the same time the need at home is great."
He said he is particularly bothered by the fact that "we're
paying on the interest," with no chance to pay off the principal.
Payment on the debt would "make sense if there was a way to
reduce it," he said.

Hearing varied voices

Archbishop Ndungane's message was echoed by two other keynote
speakers-Bishop Luiz Prado of the Diocese of Pelotas (Brazil) and
Bishop Peter Selby of Worcester (England), who chaired the
subsection dealing with international debt. Panelists included
Bishop Renato Abibico of Northern Luzon (Philippines); Bishop
Geralyn Wolf of the Diocese of Rhode Island (ECUSA); Samuel Arap
Ng'eny, an Anglican Consultative Council member from Kenya; and
Bishop Dr. Nicodemus Engwalas-Okille of Bukedi (Uganda). The
session was chaired by Archbishop Orland Lindsay of the West
Indies.

In an introduction to the speakers, Archbishop George Carey
observed that "if poverty in Africa is to be turned around, there
are hard decisions to be made, and great responsibilities" for
everyone involved in the debt crisis.

"What I am convinced of is it can happen and must happen. I
believe the depth of suffering which we have seen and which we
will continue to see in so many parts of that great continent go
far beyond what is tolerable in a civilized world," he said.

Mr. Arap Ng'eny described how the cure can sometimes be worse
than the disease, when austere economic measures, called
Structural Adjustment Programmes (SAPs), are imposed to help a
country make its debt payments.

Privitization of government-owned industries, for example, he
maintained, tends to lead to foreign control of companies, and
other adjustments may discourage rather than encourage
production. Kenya has become an importer of maize, he said, the
population's staple food, he said, and "at present there is a
shortage."

Bishop R. Barry Jenks of British Columbia (Canada), and his wife,
Barbara, who both attended the plenary, said they became engaged
in the international debt issue after serving the church in
Guyana. After a currency devaluation was imposed, Mrs. Jenks said
she was struck by the scene of "women in the market trying to buy
rice and realizing that they didn't have enough money. I can
vividly remember the fear and anger. That really hit me."

World Bank president criticizes video

A discordant note came from World Bank President James Wolfensohn
who took issue with a video presentation by the Christian Aid
agency that led off the session. The video, which reported on the
hardships brought on by crushing debt in Jamaica and Tanzania and
criticized debt relief efforts of the World Bank and
International Monetary Fund (IMF), prompted a sharp rebuke from
Mr. Wolfensohn.

"I am not angry about the film. I'm upset. I'm upset because it
paints a picture of our institution which is quite simply wrong,"
said Mr. Wolfensohn, who flew from New York just to address the
plenary.

To characterize the World Bank as the villain in the debt crisis
is "neither fair nor correct," he said. The World Bank, which was
established after World War II to coordinate international
efforts at reconstruction, has been at the forefront of efforts
to eradicate poverty, he said.

He also said that cancelling the debt would not guarantee that
the money saved would be used for social needs, especially in
countries in which government corruption is common.

On one point, however, he said he agrees with the video's
producers: "that there is a significant and overwhelming debt
burden on many countries." (For further information on Mr.
Wolfensohn's comments, see Lambeth Conference Communications
press release #51).

Casting no stones

Archbishop Ndungane, who spoke after Mr. Wolfensohn, said the
bishops had not come to Lambeth "to cast stones on anyone, but
are here to reason together and to find solutions at the dawn of
this millennium."

Everyone is needed on this mission, including the World Bank and
the IMF, he said. But when policies are skewed in favor of the
creditors, it is reasonable to raise questions, he added.

There are also no provisions for restructuring the debt through
an impartial process, such as the bankruptcy courts found in most
countries, he said. Instead, Western creditors "act as plaintiff,
judge and jury" when deciding who gets loans, loan repayment
terms, and the conditions for debt relief.

The World Bank and the IMF, the channels for nearly half the debt
incurred by developing countries, have a different set of
priorities than a bankruptcy court, he said. If a corporation
files for bankruptcy, the managers and workers are spared
liability, but that is not the case for the children of indebted
nations. Creditors, led by the IMF, have made it clear that debt
repayment ranks ahead of payments for health, education and clean
water, he maintained.

Proposal for Mediation Council

A new mechanism is needed, said Archbishop Ndungane, who proposed
a Mediation Council that would provide "a strict and neutral
arbitration process" for debt relief. Other initiatives have been
tried, notably the Heavily Indebted Poor Country Initiative
(HPIC) launched by the World Bank and IMF two years ago to assist
the most-burdened countries, but each of these efforts have been
heavily weighted in favor of the creditors, he said.

The Mediation Council he proposes would act as an international
bankruptcy court concerned with giving heavily indebted countries
a fresh start. Legislatures and parliaments would be encouraged
to follow the example of Uganda where loans must be first
approved by Parliament.

"The Mediation Council would challenge corruption, in both
lending and borrowing," he said. "It would take evidence from
experts. It would assess the country's capacity to pay. Above
all, it would seek to protect ordinary citizens-men, women and
children-from having to carry the full brunt of the country's
debts and losses." In short, Ndungane said, "it would stop the
poorest people of a country falling into a bottomless pit of debt
in the future."

The cost to all lenders of cancelling all debts, by the World
Bank's own estimates, is $7.4 billion, he said. Compared with the
bailout money paid this year to Russia-$12.6 billion-and to banks
floating $60 billion in South Korean loans, the cancellation is
possible, but probably not politically palatable to the G8
countries (the eight largest industrial nations: the United
States, Canada, Japan, Great Britain, France, Germany, Italy and
Russia).

"What is lacking is the political will to find money to bail out
the poorest people on earth," he said. "In the wake of this
indifference, the faith community must act. The world is waiting
for a word of hope, good news to the poor," he said. "What the
bishops can give is one voice, a voice strong in defence of the
poor, bold in contradiction to the rule of money, and full of the
love of God."

Worcester bishop adds his call for cancellation

In the concluding presentation, Bishop Peter Selby, chair of the
subsection addressing international debt, proclaimed, "For the
sick and the orphaned and the widowed and the children who need
food to see tomorrow, cancel the debt!"

Cancellation should come without restrictions, he said. "Cancel
the debt uncompromisingly and unconditionally. And we do not ask
for charity or generosity; we are looking for simple justice."
The uses for the original loans have to be considered, he
asserted. "When is a debt not a debt? Not something that ought to
be paid? Is there a debt for a tank that was used to attack your
parents? Is that a debt?"

The structures such as the World Bank set up after World War II
to support international reconstruction no longer serve, and have
created an impossible force of debt that he likened to a "false
divinity," which "we all thought was an instrument, an instrument
that served us." The debt, he said, "has rights more than the
rights of human beings. And frankly, like many false divinities,
it does not fail to ask for human sacrifice."

Nan Cobbey, Katie Sherrod, Allan Reeder, Lisa Barrowclough and
James Thrall contributed to this article.

For further information, contact:

   Lambeth Conference Communications
   Canterbury Business School
   University of Kent at Canterbury
   Telephone: 01227 827348/9
   Fax: 01227 828085
   Mobile: 0374 800212

   http://www.lambethconference.org

All press releases are available from the Lambeth Conference web site at
www.lambethconference.org.

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