wfn.org | Episcopal Church leaders join in debt campaign

[Daphne Mack <dmack@dfms.org>]

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99-040
Church leaders join campaign for relief of international debt
by James Solheim
(ENS) Archbishop Njongonkulu Ndungane of Cape Town has joined other
church leaders in the international campaign seeking to cancel the debts
of nations in the developing world.

In South Africa, Jubilee 2000, a broad-based campaign pressing for the
alleviation of debts, has released a report on the role played by Swiss,
German, British and American banks in supporting the apartheid regime
through "odious" loans. About 90 percent of the nation's long-term debts
are owed to the four creditor countries.

Ndungane called on Swiss and German banks to make reparation because
they were "accomplices in a crime against humanity." Speaking for
Jubilee 2000, George Dore said, "Those financial institutions which have
been cashing in debt repayments for loans used to perpetuate the
apartheid era should make reparation, perhaps establishing a plan to
support education and the creation of jobs."

The post-apartheid majority government of President Nelson Mandela has
been hampered in its attempts to provide services for national
reconstruction because of the debt burden it inherited from the previous
white-controlled government.

"The Western world economy and government elites did not hesitate to
openly support the sham reform policies of the apartheid regime," the
report contended. Until comprehensive sanctions emerged in the
mid-1980s, foreign funds financed the apartheid regime's survival
strategy, with devastating consequences for the people of South Africa.
Even after sanctions were imposed, the effect was "significantly reduced
by several debt rescheduling operations and by the striking loyalty of
German and Swiss bankers" to the regime, the report claims. "This is
dirty money for which compensation should be paid."

The relationship between the Swiss and the apartheid regime, for
example, was very profitable, earning an estimated $300 million a year
in interest and dividends between 1985 and 1993. 

Yet sanctions played "an essential role in getting the regime to the
negotiation table," the report said. "Towards the end of 1989, South
Africa was faced with a serious financial crisis in foreign relations.
On the other hand, the apartheid regime used foreign credits as an
opportunity to postpone negotiations and to intensify its repression and
war."

The report suggests that either 1989 or 1993, the year before Mandela
was elected president, be used as "the cut-off year for the demands for
debt cancellation and that profit transfers from 1985 to 1993 be
considered as a reference for reparation demands."
Latin Americans demand relief
According to World Bank figures, the debt burden for Latin American
countries will reach $706 billion this year. Most of the loans were made
during the era of military regimes in the 1970s and the interest has
been building ever since.

"The debt is not one more problem for us to face-it is the problem,"
said Roman Catholic Archbishop Oscar Andres Rodriguez of Honduras at a
January conference sponsored by the Jubilee 2000 movement that brought
together participants from 17 countries to discuss a strategy for debt
relief.

"The Jubilee vision stands in stark contrast to today's international
financial system which is governed, not by law, but instead by
lawlessness," Ndungane of South Africa told the conference. Describing
the debt as a "structural sin," the archbishop said that the debt crisis
had "left most African and Latin American governments in hock to their
old colonial masters, the leaders of the rich creditor nations,
represented by the International Monetary Fund and the World Bank."

Ndungane said that "the old colonial powers no longer send gunboats and
troops to enforce their will on the people of Africa or Latin
America-they send the IMF instead."

Methodist Bishop Bernardino Mandlate of Mozambique urged people in
Africa and Latin America to join in a common struggle because "we suffer
from the same disease. We have been made poor, and we have been kept
poor. We haven't had space to breathe. The only way we'll get space to
breathe is if we link arms and fight for that space together."

The conference took place a few blocks from some of the most devastating
destruction unleashed by Hurricane Mitch last November, crippling 60
percent of Honduran infrastructure and destroying 70 percent of its
crops.

"How the hell do you expect these people to build a solid infrastructure
to withstand hurricanes when they are diverting so much of their
precious resources to rich countries like Britain and Germany and the
United States?" asked Ann Pettifor, director of the British Jubilee 2000
Coalition. While creditor nations announced a three-year moratorium on
debt payments by hurricane-ravaged Honduras and Nicaragua, the unpaid
interest would be added to outstanding debts. 

Gilberto Aguirre of the Nicaraguan Council of Evangelical Churches
pointed to the deception by the government and financial organizations
who "are letting us believe we are off the hook when the truth is we'll
have to pay later." He added, "We couldn't pay the debt before the
storm, and we simply can't pay after the storm. The church is clear
about this, and we've got to make the international financial
organizations listen and understand."
--based on reports from Ecumenical News International.