wfn.org | German churches in joint call for debt cancellation

[FRANK_IMHOFF.parti@ecunet.org (FRANK IMHOFF)]

Social and ecological indicators should be criteria for debt relief

GENEVA, 21 December 1998 (lwi) - Protestant and Roman Catholic churches in
Germany have joined in the worldwide call for the cancelation of  poor
countries' debts.

Under the title, Foreign debt - an ethical challenge, the Council of the
Evangelical Church in Germany (EKD) and the Catholic Bishops' Conference
propose conditions that need to be fulfilled if the foreign debts are to
be deferred or canceled.

The conditions forcing debtor countries to enforce structural adjustment
measures shall not be based solely on economic data such as trade balance
deficits or inflation rates but must be aimed at social and ecological
improvements. The reduction of illiteracy rates and improvement in the
education and health systems should also be a condition for the deferment
of debts, the paper says.

Constitutional and democratic structures, reduction of corruption and
flight of capital, a social order based on market economy in conjunction
with an opening to the world market, high investments in education for
large population groups, restriction of military spending, monopoly
control as well as land reform, are criteria added by the churches to the
existing requirements.

"Debt-free countries which do not conduct any internal reforms will not
have any credit rating on the international capital markets," the paper
continues. Emergency aid in crisis situations that threaten the population
of a country must be exempt from these conditions.

According to the Joint Statement, the rich countries too, should make
changes in their economies in order to bring about a solution to the
international debt crisis. For instance, they could dismantle
protectionism and "excessive subsidies for weaker economic sectors" which
are obstacles to the development chances of poor countries. The churches
also recall the "special responsibility" of rich countries due to the fact
that "in the past, creditors - states and banks - not infrequently gave
credits to poor countries in too reckless a manner."

Historically, debt cancelation is nothing new. Experience in European
countries has shown that a consistent debt cancelation for states is not
utopia if there is a "serious political will" behind it. Thus the 1953
London debt convention, largely freed the then war debilitated Federal
Republic of Germany from its foreign debt.

The Joint Statement published on 21 November recalls the jubilee mentioned
in the Old Testament when every 49 years, debts are released and land is
returned. The Statement refers to earlier papers such as "Overcoming the
debt crisis" and "Common weal and selfishness" from the Evangelical Church
and to the papal encyclicals, "Tertio Millennio adveniente" and
"Centesimus Annus" on the part of the Roman Catholic Church.

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