Civil society to foreign creditors: "Break the chains of debt!"
By Gina Mission

human chain consisting of some two hundred Filipino farmers, urban poor, youth, religious and non-government organizations welcomed the world leaders attending the recent Asian Development Bank Annual Board of Governors Meeting (ADB-AGM) held in Manila last April 30.

___Dramatizing the burden of servicing foreign debt, the participants linked themselves in a human chain, issuing the collective cry: "Break the chains of debt!"

___The participants cited four reasons why the chain has to be broken:

First, the majority of our people did not benefit from these loans.

Second, the economic policies that led to the country's indebtedness have also led to the widening gap between rich and poor.

Third, debt service robs our country of resources that should have been used on social welfare and the empowerment of the people.

Fourth, the effects of conditionalities imposed by the International Monetary Fund (IMF) in exchange for good credit rating and new loans are as bad as, if not worse than, the impact of debt servicing.

___Organized by the Philippine Jubilee Network (PJN), Philippine Jubilee 2000, Freedom from Debt Coalition (FDC), and People's Campaign for Agrarian Reform Now (AR Now!), the groups came together to join hands and raise the universal Jubilee 2000 call for a debt-free start in the new millenium "for the impoverished and indebted countries of the world."

___Joining hands with the organizers were some 20 NGO representatives attending the ADB-AGM. The idea, according to the FDC's Maitet Diokno, is to call on the G-7 countries (USA, Japan, Germany, France, Canada, Australia, UK), as well as International Financial Institutions (IFIs) such as the World Bank (WB), International Monetary Fund (IMF), and the ADB, to condone global debt, which "continue(s) to enslave the world's poor nations."

___Jubilee 2000 had its origins in 1996, when Pope John Paul II declared the Year 2000 to be a Jubilee year, a Jewish celebration based on the Bible's Leviticus 25:8-11, which says that every 50 years, one makes a new beginning wherein debts are cancelled, land is returned to its rightful stewards, and slaves are set free.

___For the participating civil society organizations (CSOs), Jubilee 2000 is an opportune time for the basic sectors to come together to apply "self-righting mechanisms for restoring balance to society, to ensure that structural inequality does not become entrenched."

___International loans, according to PJN, are negotiated in secret between the local elite and powerful creditors, such as the IMF, the WB and government export credit agencies. But the burden of repayment falls on ordinary people -who were never party to the agreement - in the form of reduced basic and social services. Worse, loans, the PJN added, are often made for geo-political reasons and to promote export sales and to gain political leverage on the part of the creditor nation.

___As there is no such thing as international bankruptcy law, sovereign nations are expected to honor their debt, with no recourse for default or unilateral debt moratorium. What happens, according to JPN, is that debtor countries fall deeper into debt.

___For instance, data from the WB show that in 1996 developing countries paid $1.8 billion more in debt service to the IMF than they received in new loans. In 1987, IMF has received $2.4 billion more from Africa than it has given in new loans to the region. For every $1 given in aid by creditor countries, the PJN added, $3 is sent back by poor countries in debt repayments.

___Said PJN: "Every year resources are being diverted from health, education and sanitation towards unproductive debt service. The United Nations Development Programme in 1997 stated that 21 million children's lives could be saved if the money used for debt service was put into health and education."

___In 1996, the IMF and WB took a historic step in agreeing to "comprehensively remit and reschedule the debts" of potentially up to 40 heavily indebted poor countries (HIPCs). But the initiative has stalled that at present, no country has been granted debt relief so far.

___The Philippines, while not considered by the IMF and WB to be among the HIPCs, is confronted nonetheless by "a life and 'debt' issue", according to FDC. The government's policy of "honoring all debts", the FDC added, has placed an "insupportable weight on the Filipino people".

___Debt per capita in the country has risen from $44 in 1970 to $630 in 1997. Observed the WB in its recent study on the impact of the financial crisis: "The Philippines' efforts to overcome the crisis are hampered by carrying the burden of the debt crisis of the 1980s which is contributing to internal vulnerability."

___According to the FDC, since 1980 foreign debt has demanded service payments of 20 to over 50 per cent of the country's annual income. In 1999, some P235.1 billion will be used for debt servicing, P120.7 billion or 20 percent of the national budget of which represent interest payments alone. In contrast, the government spends P25 (approximately $0.60) per child on textbooks, which is roughly 5 per cent of the estimated amount needed for a complete set of books.

___FDC charges that such government "misappropriation" of public funds is made legal through Section 26 (b) Book 6 of the Revised Administrative Code of 1987 which provides for automatic appropriation for principal and interests payment of the public debt. Such law gives legal license to place debt service over and above all other spending, including funds for poverty alleviation and social services.

___"Unless something is done to break this 'addiction' to debt service, we shall remain slaves of our own making," said Soc Banzuela of Philippine Agrarian Reform Foundation for National Development (PARFUND).

___Racing against time, perhaps protesters might be left hoping for the eventual realization of Jubilee 2000, when Leviticus 25:8-11 shall come to pass:

___"Every fiftieth year, on the Day of Atonement, let the trumpets blow loud and long throughout the land. For the fiftieth year shall be holy, a time to proclaim liberty to all enslaved debtors, a time for release for all who live there. It shall be a year when each of you returns to the land that belonged to your ancestors and rejoins your clan. Yes, the fiftieth year will be a jubilee for you."


CyberDyaryo | 1999.05.06