Ferial Haffajee
`The owner needs the cow because of its milk. The cow needs the owner because he provides it with hay. But when the cow ceases to produce milk, the owner may well decide to slaughter it. The cow cannot do the same to the owner.”
This is what Mozambican President Joaquim Chissano said in Jamaica last month during an impassioned plea for the scrapping of foreign debt.
In his allegory, the cows are the 41 poorest countries of the south, still linked umbilically to their owners, the wealthy countries of the north, to which they owed $215-billion at the end of 1997. Long ago the cows ceased to produce milk.
The world’s poorest countries cannot pay their debts and provide the basics (food, security, health and education) for their people. In the balancing act between not defaulting on their loans and satisfying pressing social needs, something has to give.
The United Nations Human Development Report, which measures literacy, life expectancy and living standards, is revealing. At the bottom of the rung of that report languish the world’s 41 poorest countries – all but seven of these are in sub-Saharan Africa.
In the latter half of this century, the International Monetary Fund (IMF) and the World Bank crafted several debt relief measures. None had any lasting effect, as illustrated through the poor countries’ debt figures which have grown and grown, from $55-billion in 1980 to $183-billion in 1990 and up by a further $32-billion last year.
Last year the IMF and World Bank launched another debt relief measure. Called the hHeavily indebted poor countries (HIPC) initiative, it aimed to provide a “rapid exit” from debt. It recognised that crippling debt stood in the way of investment and precluded Africa from taking its place at the global economic table.
Just one year down the line, it has become clear that the HIPC is not working. Earlier this year, the World Bank acknowledged that actual debt relief figures would be lower than anticipated: only two of the 41 countries ear-marked for relief (Uganda and Mozambique) will in fact receive any debt relief by the year 2000.
The HIPC initiative is granted to countries with unsustainable levels of debt. Unsustainability is reached when debt is between two and two-and-a-half times greater than a country’s revenue from exports. But before any relief is allowed, countries have to complete three steps. The road to HIPC debt relief begins with a three-year structural adjustment period, after which a country reaches its “decision point”, when the amount of debt relief is determined and debt-servicing obligations are reduced.
This is followed by an enhanced structural adjustment programme. Only after this does a country reach “completion point” where debt stock is reduced by an agreed amount.
The process is cumbersome and long. Critics also complain that the definition of unsustainable debt is too narrow and doesn’t take into account a country’s ability to provide for its citizens’ basic needs.
The Jubilee 2000 campaign draws it inspiration from the Bible, in which the Jubilee is an earthly renewal which occurs every 50 years.
Its proponents want significant debt relief by the year 2000 through a fundamental renovation of the HIPC initiative.
“All the indications suggest that continuing with the policy as it stands will not resolve the debt problem,” says the international Catholic human rights organisation, Cafod.
The Jubilee 2000 petition can be found at
. The signed petition will be handed in at the Group of Eight industrialised nations summit next year