Ann Pettifor
The Jubilee 2000 Campaign
Talk given to SEDOS on 17 February, by the International Director of the Jubilee 2000 Campaign

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May I begin by thanking SEDOS, in particular Walter von Holzen and Mike Seigel for arranging this meeting, and for inviting me to Rome to speak you here. I have looked forward to this for some time, knowing what an extraordinary network of committed people are assembled here today.
For me it is particularly moving to be here, because I went to school, in a small town called Welkom in the Orange Free State in South Africa, that was run by a wonderful group of Dominican sisters. What you see here today, is partly the product of that education. If I can give back just a small part of what they gave me, I would be happy.
They say that if you want to make God laugh, you should tell him your plans for the future. God must be chuckling at Jubilee 2000 and our plans for ways to celebrate the 2,000th anniversary of the birth of Christ by giving a billion people a debt-free start.
But while he may be amused, nevertheless there is some realism attached to our proposal. In October, 1996, the IMF and World Bank persuaded the Paris Club of bilateral (government to government) creditors to join them in setting up an historic debt relief initiative. It is called HIPC - the Heavily Indebted Poor Country Initiative - and it is historic in that before 1996, neither the World Bank nor the IMF had ever considered writing off or re-scheduling the debts owed to them - in all the 50 years of their existence.
So we are not living in "cloud cuckoo land" - we are living in a world in which comprehensive debt relief (in the sense that it is meant to encompass all major creditors) is already being offered to about 21 of the poorest countries. Unfortunately the scheme is offering too little, too late. Two years after the Initiative was first discussed at the Spring meetings of the World Bank and IMF - not one single country has yet received debt relief. And the criteria for relief, and the amount of relief offered are, in our view, not sufficient to return poor countries to true sustainability.
Why are we, and why should you be concerned about high levels of debt in developing countries. Mainly because it is profoundly unjust. As Mick Seigel has already pointed out, it is a form of bondage - debt bondage. The bondage of the poor. There is a widespread belief that Africa is poor. Yet (sub-Saharan) Africa is "rich" enough to transfer about $33 million a day in debt repayments to Northern Governments and multilateral (World Bank and IMF) creditors. Africa is "rich" enough to spend four times as much on debt repayments as she spends on health and education. Since 1987 Africa has transferred $2.4 billion more to the IMF (in debt repayments) than she has received from that institution in the form of new loans. Furthermore, Africa is "rich" enough to transfer money intended as aid (often called "balance of payments support") for her individual countries - back to the countries of origin - as debt repayments. (An unacceptable proportion of aid to developing countries is used for debt repayment - often to the multilateral institutions. As a result the aid is going full circle, often not touching down and providing development assistance for the country it is directed to. This use of aid is kept under wraps, both by developing country élites - but also by donor Governments. In Britain it annoys taxpayers to know that in 1995 for example, the Government publicly announced that it had given Zambia 25 million pounds to help that country repay her debts to the Washington Financial Institutions).
The second profoundly unjust element of developing country indebtedness, is the role that debt plays in undermining developing country autonomy and sovereignty. We should never forget that debt is the instrument, the mechanism if you like, that gives the IMF a license to intervene in a country's economy. Only when a country gets into difficulties, when it in effect becomes "bankrupt"; when it runs out of the hard currency needed to repay debts - does it turn to the IMF. In these circumstances, the IMF is not independent. She is a major creditor, and acts in these circumstances as the agent of all creditors - in particular private banks.
The IMF's "core" business of course is making loans. That takes precedence over the by-product of her "core" business - giving economic advice, imposing strict conditions on the provision of loans.
So countries only have to adopt Structural Adjustment Policies (SAPs) when they have got into severe debt - as in the case of South Korea, Indonesia and Thailand. Debt is the noose, which is always tightened by SAPs, which denies poor countries economic sovereignty and autonomy. As a result of SAPs poor countries are forced by the IMF to open up their markets to Western goods - that is one of the IMF's main policy objectives - and as such is an extension of OECD Government foreign policy objectives. As a headline in the IHT on 2 Feb 1998 put it: "Asia's crisis could bring a dividend to U.S. companies: Open Markets". (In the old days markets used to be forced open by what was known as "gunboat diplomacy". Today OECD Governments use the IMF and dispense with their diplomatic corps).
Sadly the IMF does not do for poor countries what she does for rich countries. She does not open the markets of rich countries to poor country products. So while poor Rwanda or Nicaragua are forced to open up their markets to the car-makers of Detroit, or the maize farmers of the U.S. Midwest; the reverse does not happen. Rwanda, Nicaragua or India could not hope to sell lemons, or beef or textiles to the European Common Market. While Rwanda's trade barriers (set up to protect her local producers) are torn down by IMF policies - Europe's Common Agricultural Policy barriers are maintained. The IMF's lack of effectiveness in Europe, of course, is partly a function of democracy. It is not possible to very easily impoverish the people of a well-established democracy by removing subsidies and protection - they very quickly object and throw out the politicians making these proposals. Helmut Kohl, while he may secretly dream of "reforming" the CAP, would never stand for election on that basis. So the IMF has its economic policies (largely) thwarted by democratic institutions in the North. In countries like Rwanda, recovering from civil war, there are not the same democratic institutions.
So we in Jubilee 2000 strongly object to the way in which indebtedness is used to transfer wealth from poor to rich; and to obtain a stranglehold on the economies and markets of poor countries.
We object also of course, to the way in which debt harms the poor in developing countries, as funds are diverted - from health, education, sanitation and clean water - into debt service. In its 1997 Human Development Report, the UNDP argued that if funds were diverted from debt repayments into health, sanitation and clean water, in the most indebted countries, the lives of 21 million children could be saved by the year 2000. For us this is sufficient motivation to argue that something must be done, urgently.
So what does Jubilee 2000 stand for? And how did we begin?
Let me tell you the story of our beginnings. A by now elderly gentleman, Martin Dent, first had the idea of linking debt relief to the concept of Jubilee and the new millennium, back in 1990. When I joined the Debt Crisis Network (a U.K. alliance of NGOs working on debt) in 1994, Martin Dent and his friend Bill Peters had for some time been trying to persuade others of the value of their idea. To no avail. If I take any credit at all, it is that I could see what a good idea it was. However at that time, we had no resources, and I was busy lobbying the British Government, the Paris Club, World Bank and IMF on behalf of the Debt Crisis Network. One busy, hectic day, Martin asked if I would meet a friend of his, Isabel Carter. Reluctantly I fitted her in. As she sat down she explained that she had had a vision. I groaned inside, thought: "do I need this?", and tried not to show my scepticism. In her vision, she explained, God had called on her do work for Jubilee 2000. But she had never heard of this body, thing, and so began a search. Finally she came across Martin Dent and his friend Bill Peters. Now she had come to ask what she could do. I explained that we would need money; an office, resources, and the DCN would have to be persuaded to release me to work on the campaign. She left, and I got on with other things. A few weeks went by and she returned. She had obtained charitable status for a Jubilee 2000 campaign, and had found some money - a large sum of money! I began to take Isabel Carter very seriously.
Christian Aid, a large Protestant aid agency in London, offered us accommodation - a shed on their roof! We failed to notice that the corrugated plastic walls of this shed did not reach down to the ground - so in the winter the draughts meant that our two staff were forced to sit Buddha-like on their chairs at their desks to protect their feet.
That was in April 1996. From there we have gone from strength to strength. Today our Petition is being collected in 69 countries. In 40 countries we have a semblance of an organisation. We are very proud that increasingly Jubilee 2000 offices are being set up in the G-7 countries - the major creditor countries - in Germany, the U.S., Canada, and it is to be hoped soon in Italy. We need further help in Japan, and also in France - to establish coalitions based on the Jubilee 2000 model; a coalition of Christian denominations, Jewish and Muslim faiths, the trades unions, Black community groups in Northern countries, women's groups - and celebrities.
We have many supporters in Latin America and Africa - with petitions arriving each day from countries in these regions. There will be an official launch of the Jubilee 2000 movement in Africa on 15th April, in Accra, organised by local Churches, trade unions and other groups. (For further information contact West African Council of Churches).
All these organisations reflect the reality of Jubilee 2000: as a movement of ordinary people in both creditor and debtor countries demanding an end to an international financial system that so unjustly enslaves debtor nations. In that sense we reflect the movement against slavery in the 19th century. That too was an international movement, led by resistance from slaves in the South, and supported by ordinary people in the North that did not like what their Governments were doing.
What does Jubilee 2000 stand for? Above all, we seek to shine the light on both what creditors have done in exacerbating the debt crisis, as well as debtors. In fact we take the view that the powerful have more responsibility for this crisis, than the victims of the crisis, the debtor countries. Of course we realise that élites in debtor countries played a bad role, often a corrupt role. But we highlight the role of the corrupters, the lenders of money, who often used their power to lend, to extract gains, whether they be commercial, financial or political.
We draw attention to the fact that there is no international bankruptcy law. That it is not possible to draw a line under debts, and bring them to an end, if they are the debts of a poor sovereign country. This is in stark contrast to domestic law. Here if a trader gets into difficulties, he or she becomes bankrupt. This means the debts are drawn to an end. A "receiver" or arbitrator steps in, and assesses liabilities and assets; how much the debtor can afford to pay; and what losses the creditor must suffer. So for example, Eurotunnel is in effect bankrupt. But the concept of limited liability for the debts in domestic law, prevents the children of the employees of Eurotunnel from being held liable for the debts. Instead the law protects them from suffering as a result of the mistakes of Eurotunnel's management. But when Julius Nyerere asks: "shall we starve our children to pay our debts?" the international creditors answer "yes, of course you shall, because repaying your debts is more important than providing food for your children".
Let me give you another example of this injustice. In Britian we had a corrupt businessman, Robert Maxwell. Now while he was alive, I was fully aware that he was a rotten apple, so probably were you, as we all read the newspapers. However the banks, it appears, were not. They lent him a lot of money. One night he fell off his boat in the Mediterranean. The next day they discovered that his company was rotten, bankrupt, that he had stolen money from his company's pension funds, etc. The banks were the biggest losers. They took his sons to court, demanding that they accept liability for their father's losses - after all they were on the Board of Directors. The courts did not agree - they got off scot-free, under the concept of limited liability.
In contrast take President Mobutu. He shared many of the characterisitcs of Maxwell. I knew that he was rotten. So no doubt did you. Not so my Government or the U.S. Government or the IMF and World Bank. Together between 1981 and 1990 they lent him $8.5 billion - some of it came in the form of aid. This was particularly wicked because in 1980 the World Bank had asked a respectable German banker, Erwin Blumenthal, to investigate the Bank of Zaire. He reported that it was utterly corrupt and rotten, that no creditor could ever expect to get his money back. The following year the IMF granted the Bank of Zaire the biggest loan ever given to an African Government.
Now the reason for this was not just incompetence. The IMF, despite protestations to the contrary, is an arm of U.S. foreign policy, and the Cold War was still being fought, with Cuban troops in Angola. I do not want to comment on this. My question is this: why 10 years later, are the poor people of the new Democractic Republic of the Congo expected to repay these debts?
And the greater injustice is this. The IMF of course is not only political, it is a parastatal, a nationalised bank. In fact the World Bank and IMF are the mother and grandmother of all nationalised banks. So when they make mistakes like lending to Mobutu, they do not suffer as the banks that lent to Maxwell suffered. On the contrary, they gain. They will now return to the new Congo Kinshasa, and offer that Government new loans - to help repay the old loans. So the U.S. taxpayer does not have to pay the full cost of U.S. foreign policy objectives in Africa; the IMF gains by getting new income streams from new loans. And the poor people of the Congo lose.
The IMF, unlike Nat West Bank in London lending to a domestic company, is highly protected. What is more, it plays a protectionist role - protecting the interests of all creditors, including private creditors and banks. This is a strange position for an institution that is keen to privatise most of the institutions she encounters in developing countries - and is so keen to subject these institutions to the full blast of market forces.
So we in Jubilee 2000 challenge this injustice, these double standards for the poor.
Our Petition is very carefully worded: we call for the cancellation of "unpayable" debts - not all debts. As Mick said earlier, if a debtor has debts of $1,000 and can only afford to repay $100 we call for the write-off of that portion that is not payable. This of course does not mean that the debtor is left with a lot of money to play with. On the contrary this will often not result in additional resources - it will only remove a burden. Many countries need additional resources - we believe that Africa needs both debt relief and a "Marshall Plan" of aid.
Secondly, we call for this relief for the most impoverished countries. Africans asked us to use the word "impoverished" an active phrase, not the passive "poor" countries, arguing that developing countries are actively being impoverished by the internationanl trading and financial system.
Thirdly, we call for resources freed up by debt relief, if there be any, to be transferred to the poor. We particularly want debt relief to be granted transparently - i.e. with clear public announcements.
Fourthly, we take as our deadline the new millennium. We do this to put pressure on creditors, and on ourselves to build up the momentum of the campaign. But above all, so that millions of people in developing countries will have a real reason to celebrate in the Year 2000.
Finally, we want an independent and transparent process for negotiating debt relief. We do not believe that the IMF as a major creditor itself, can be independent. Yet the IMF drives the whole process of considering debt relief. No country may come before the Paris Club of creditors seeking to reschedule its debts, without first jumping the hurdles set by the IMF, and adopting an IMF structural adjustment programme.
We want loans to be made public, when they are Government loans. People in the North should be able to ask why loans are being made to poor countries, and what the loans are used for? Is it for the promotion of exports? And are these exports weapons? Who benefits?
In developing countries people should ask: what were the loans given for? How were they spent? Who benefitted?
Already in Uganda progress has been made. Before the Government can agree to a loan it has to be agreed by Parliament - and discussed. The purpose of the loans - like building a dam - should be discussed with local people. Will the dam harm the environment, hurt local people?
So what can you do?
First, and most importantly, talk and write about the debt. Break the silence about this invisible bondage. In buses, in the market place, in your communities - these issues must be discussed.
Second, understand the targets of our campaign. It is not the IMF per se. The IMF is a public institution staffed by public or civil servants. Its job is to take the blame, to act as a lightning conductor. The real decision-makers of the IMF are often not visible. They are the finance ministers of the G-7 (now 8 including Russia) and their leaders. These are targets of our campaign in the North. They sit on the Board of the IMF and World Bank, and make the big decisions. They back the IMF's strategies. They are the powerful, and we must not misdirect our anger, but be sure they become aware of it.
In the South, in indebted countries, it is the élites and finance ministers of governments that take out loans irresponsibly.
Once you have identified the key person in your country - say the Finance Minister for Italy, Mr Ciampi - then it is important to ask questions:

a) What debts are owed to our government by the poorest countries?
b) What did we make the loans for?
c) How much of the debt has already been re paid?
In developing countries we need to identify the finance minister and ask these questions: a) What do we owe to foreign creditors?
b) What did we borrow these loans for?
c) How were the loans spent?
d) How much of government resources (taxes, income from exports) are being used to repay the debts?