wfn.org | Re: LWI 2008-071 Calls for Creditor Co-Responsibility at Historic Symposium on Illegitimate Debt

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Calls for Creditor Co-Responsibility at Historic Symposium on
Illegitimate Debt
Timely Gathering amid Global Financial Crisis

OSLO, Norway/GENEVA, 21 October 2008 (LWI) – Leaders in the
fields of government, policy, law, religion and ethics meeting in
the Norwegian capital, Oslo, for a historic symposium on
illegitimate debt began their deliberations today, with calls for
far-reaching international legal mechanisms to protect ordinary
people from repaying sovereign debts that were neither
legitimately contracted nor directed at the people’s best
interests.

Many members of the Lutheran World Federation (LWF) constituency
living in heavily indebted developing countries have personally
experienced the unjust effects of illegitimate and unsustainable
foreign debt, said LWF General Secretary Rev. Dr Ishmael Noko in
his opening remarks. 

"They have seen how scarce public revenue is diverted to debt
service obligations and away from social welfare and
infrastructure investment ... [and] observed the ways in which
the lives of successive generations of children can be mortgaged
to the greed of a dictator," noted Noko. He said lenders who
offer loans under conditions that do not guarantee democratic
accountability, "should bear the risks of their decision, and
should not be entitled to 'bailouts' from the international
financial institutions." 

More than 60 representatives of governments, churches and their
partner agencies, United Nations bodies, civil society movements
and legal experts are attending the International Symposium on
Illegitimate debt, jointly organized by the LWF, Church of Sweden
and Norwegian Church Aid (NCA), with support from the Norwegian
Ministry of Foreign Affairs. From the input in plenary
presentations, panel discussions and group work, the symposium
aims to formulate proposals that among others ensure mutual
responsibility and accountability between creditor institutions
and states seeking loans. 

The general secretary also spoke of the LWF’s active engagement
in global efforts against illegitimate debt, including the
Jubilee 2000 campaign for the cancellation of unsustainable
foreign debt, and the 2005 launch of the Argentina-based LWF
program on illegitimate debt, which articulates the pastoral and
ethical concerns regarding foreign debt on behalf of the entire
Lutheran communion.

He emphasized the need to focus also on the spiritual and
material dimensions of debt relationships. He made reference to a
new LWF publication on illegitimate debt, in which he argues
against unjust, corrupt, oppressive debt arrangements as deeply
corrosive not only of intergovernmental relationships but of each
of the parties involved. (See
www.lutheranupress.org/catalog/-p-95.html for LWF Documentation
53: Not Just Numbers – Examining the Legitimacy of Foreign Debts)

>Global Financial Crisis

The symposium organizers described the meeting as timely
especially in view of the current global financial crisis. "It is
an illustrative case in point especially when we have observed in
the past weeks how efficient Western governments and financial
institutions are able to act swiftly when they see it as
necessary," said NCA General Secretary Rev. Atle Sommerfeldt,
referring to financial bailout negotiations in leading world
economies. 

He commended the Norwegian government for its leadership role on
the illegitimate debt issue, especially for being the first
Western government to accept co--responsibility by cancelling in
2006 the debt owed by five countries in Africa and South America.

Sommerfeldt outlined NCA's involvement in the debt issue since
1989 through debates and interactions with government and civil
society, especially with the international non-governmental youth
movement Changemaker, which revitalized the debt cancellation
campaign beyond 2000. 

He however noted that despite three decades of advocacy against
foreigdeveloping countries and creditor nations, because of the lack of
delivery on promises made. Citing the case of the Democratic
Republic of Congo (DRC), he said it was scandalous that "the
people of DRC today are forced to pay between USD 300 to 400
million annually on the financial costs of [former President]
Mobutu's debt. This is a population that is suffering one of the
largest humanitarian crises in our world today." 

The success of the current symposium would be determined by “our
ability to formulate positions which can change this scandal,”
added Sommerfeldt . (660 words)

>*        *          *

(The LWF is a global communion of Christian churches in the
Lutheran tradition. Founded in 1947 in Lund, Sweden, the LWF
currently has 141 member churches in 79 countries all over the
world, with a total membership of over 68.3 million. The LWF acts
on behalf of its member churches in areas of common interest such
as ecumenical and interfaith relations, theology, humanitarian
assistance, human rights, communication, and the various aspects
of mission and development work. Its secretariat is located in
Geneva, Switzerland.)

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