Debt relief

Christian Century, August 11, 1999

ROBERT SNYDER'S analysis of Jubilee 2000 ("Proclaiming Jubilee--for whom?," June 30-July 7) raises a difficult issue: how to ensure that money freed up by debt relief would really go to the poor and not just to the military adventures or the luxurious lifestyles of leaders who are self-serving despots.

Ann Pettifor, director of the Jubilee 2000 Coalition in Britain, has suggested a framework for negotiating debt cancellation that could have broad international possibility. A country would apply to the UN or the International Court of Justice for a review of its debt, and an independent Debt Review Body would be set up as a binding arbitration panel, with representatives of the creditor and debtor nation, including some members from civil society in the indebted nation. A Poverty Action Fund would facilitate the flow of released resources to the poor. After public debate about the debt, a "concordat" between creditors and the debtor government would be signed.

In Zambia, progress is already being made on designing a "debt management mechanism" that brings together representatives from civil society, parliament and various government ministries. Its role will be to monitor and supervise debt negotiations, cancellation arrangements and the transfer of freed-up resources to promote human, social and economic development. The impulse for this comes from the Zambians themselves, because they feel as strongly as anyone else that Zambia should get debt relief only if it benefit the poor. A process that will empower people to participate will discourage corruption by monitoring and auditing the way in which funds released by debt relief are used.

Thomas E. Ambrogi Claremont, Calif.

Robert Snyder fears that forgiving the debt of oppressive governments will only delay their overthrow. But some of the world's poorest countries have relatively good governments--certainly when compared with the pregenocidal regime Snyder lived under in Rwanda.

There is a bill before Congress that provides desperately needed debt relief to countries whose children are dying because of national debt. At the same time, it ensures that benefits will not just bolster corrupt leaders or the elite. H.R. 1095, the Debt Relief for Poverty Reduction Act, sponsored by Representative James A. Leach (R., Iowa) and John LaFalce (D., N.Y.), would cancel part of the debt owed to international financial institutions, but only after certain conditions are met. The bill would then require each country to establish a human development fund to hold the savings from debt relief. These savings would then be used to reduce poverty, expand social services and prevent environmental degradation.

The Debt Relief for Poverty Reduction Act would minimize the misuse Snyder fears and reduce the burden of unpayable debt for millions of the world's poorest people.

David Beckmann Bread for the World, Silver Spring, Md.

Snyder's thesis is too determined by his experience in Rwanda. His analysis would be correct if cold-war assumptions were still driving U.S. foreign policy. Then, aid was given to many Habyarimana-style dictators in order to draw them away from alignment with the Soviet Union. Dictators understood this and played both sides off against each other while lining their own pockets. Recent legislative initiatives have emphasized encouraging governments that are moving toward democracy. While this approach is also flawed, it is not the same as our policy prior to 1989. Snyder acknowledges grass-roots demands in many African countries that call for governments to be accountable. Debt relief would encourage this trend.

The real issue that bothers Westerners about Jubilee 2000 is the empowerment of Africans. The threat to our own economic dominance is obvious. Yet, as one young African pointed out in Washington, Africans are owed countless billions for centuries of oppression and exploitation. This reality is the real reason efforts like Jubilee 2000 are inadequate. But it's a start.

C. Eugene Bryant Central Christian Church (Disciples of Christ), Anderson, Ind.

Though he makes a number of accurate points, Snyder doesn't always draw the wisest conclusions from them. He cites a number of cases in which African leaders abused aid and drove their countries deeper into poverty. I lived in Latin America for a while and can attest that this kind of abuse and resultant poverty is not unique to Africa. Snyder seems to conclude, however, that since there is no way to guarantee that the poor would be the primary beneficiaries of canceling the debt, we should therefore think twice (or be cautious) about attempting it at all.

I disagree. Many of Snyder's concerns are addressed generally by the Jubilee 2000 coalition, and some specifically by the so-called Jubilee legislation in Congress (H.R. 1095), sponsored by Bread for the World and other "nonprofits." For example, there are specific provisions that prevent countries with gross human rights abuses and high military spending from receiving debt cancellation.