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| Volume 4, Issue 3 -- April 2007 |
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The Sabbath Year
The problem of the foreign debt is not only or even primarily economic; rather, it is a human problem for it leads to an ever-greater impoverishment and blocks the development and slows the advancement of those who are poorest. We ask ourselves whether the debt is valid, when paying it seriously jeopardizes the survival of our peoples, when the population was not consulted before contracting the debt, and when it has not always been used for lawful purposes. Debt is a subject with which almost no American is unfamiliar. Household debt, including credit cards, student loans and mortgages, has reached record levels in recent years, for the first time surpassing household income in 2006. The U.S. national debt has been setting its own records, fast approaching $9 trillion. While economists make grim projections for overly indebted economies, and our personal debts may affect the decisions we make day to day, the national debt at this time seems very far away and has little affect on the daily lives of most Americans. Unfortunately, this is not the case for many impoverished developing countries. Though their national debts are a small fraction of the U.S. debt, the repercussions of these debts are concrete and grave. National debt is a lived and felt reality for populations throughout Africa, Asia and Latin America. According to the All-Africa Council of Churches, every child in Africa is born bearing a debt that a lifetime of toil cannot repay. The Council says the debt creates a new form of slavery, every bit as vicious as the slave trade. Developing countries owe more than $2 trillion to international financial institutions, such as the World Bank and International Monetary Fund; regional development banks, such as the Inter-American Development Bank; and to private lenders and other sovereign governments. While this is not a large number as compared to a share of world gross domestic product, it means that poor countries must decide between making debt payments and providing essential services to their populations, such as healthcare, clean water and education. Debt-relief advocates estimate that at least 74 countries require immediate, 100-percent cancellation of debts just to meet basic human needs. Some of the countries where Columban missionaries live and work are particularly affected, including the Philippines, Chile and Peru. How did countries find themselves so indebted? Throughout the 1970s, money was lent to developing countries without consideration as to their ability to repay or to what purpose the money would be directed. Loans were given to corrupt or oppressive governments, which often pocketed them or used them to oppress their own people. While the poor rarely saw any benefit from the huge debts accrued in their name, the burden of repayment now rests on their shoulders as stringent economic policies legislated by lending institutions cause wages to stagnate and costs to rise, devaluing currency and slashing social safety nets. The historic Jubilee 2000 Campaign brought this situation to light by showing how worldwide poverty-reduction efforts were severely undermined because for every dollar that developing countries receive in aid, $1.30 leaves those same countries as debt service. Faith leaders from many traditions joined together to declare 2000 as a Jubilee Year, echoing Pope John Paul II’s call to consider “reducing substantially, if not cancelling outright, the international debt which seriously threatens the future of many nations” (from Tertio Millennio Adveniente, no. 51). Gains have been made in recent years as the idea of debt relief has become more widely accepted. The most-recent effort, the 2005 debt deal agreed to by world leaders gathered at the G-8 summit in Gleneagles, Scotland, led to some $36 billion of international debt being canceled for 21 countries. Notable benefits of this relief have included increased investment in rural infrastructure, health, education and anti-hunger programs. With the money freed up from debt payments, Zambia scrapped fees for rural healthcare; Burundi eliminated school fees; and Tanzania was able to import food for those suffering under a severe drought. However, much remains to be done. The 2005 debt deal came with a great many strings attached, including more-draconian economic conditions, such as privatization of vital services, trade liberalization and further cuts in social spending, leaving the most vulnerable and impoverished even more at risk. Nor did the 2005 deal include all the countries in urgent need of debt relief. Odious and illegitimate debts, those accrued by unaccountable, dictatorial and corrupt regimes that did not benefit the populations that must now repay them, also remain outstanding. Meanwhile, vulture funds (see below) seek to turn huge profits off discounted debt, undermining debt relief efforts. As well, many countries are finding themselves dragged back into debt due to minimal aid contributions from developed countries, high oil prices and other factors. The Jubilee Campaign is the prophetic call to restore right relationships throughout God’s creation. It is a triumphant invitation to reconciliation and liberation. Based on Old Testament scripture, the traditions of Sabbath rest and Jubilee renewal require that the slaves be freed, the land lie fallow and that outstanding debts be canceled at least once each generation. In Christian theology, Jesus Christ’s sacrifice liberated us from the debt that we could not pay. Jubilee challenges us to join the struggle to break the chains that bind our global brothers and sisters and prevent them from realizing full and dignified lives. Seven years after the historic Jubilee 2000 campaign, we claim 2007 as a Sabbath year: a year to reflect and recommit ourselves to this historic and essential campaign to free those who are bound, restore right relationships and create a fairer, more just world. In peace and solidarity, The Columban JPIC Office To learn more about the Sabbath Year, please visit the Jubilee USA website at www.jubileeusa.org. Migration: The Debt Boomerang & Immigration
Excerpts from: Boomerang 5: IMMIGRATION PRESSURES Given a choice, most people would prefer to stay in their home country. And people everywhere are fighting for the right to adequate housing, income, security and other basic needs to allow them that choice. But millions in the developing world are forced to leave in search of better opportunities. They leave for many reasons. But as explained in other sections of this report, debt is one factor in the inability of impoverished country governments to provide an adequate social safety net and a safe environment. Thus, indebtedness can be seen as part of a cluster of “push factors” in immigration. The U.S. government grants legal residency to about a million foreigners per year, most of them relatives of U.S. citizens. This leaves millions more who are eager to enter our country in the hope of achieving a better life. It is these immigrants who reflect most vividly the desperation of so many in heavily indebted countries. They are the people who take great risks to come to the United States, often crossing the border in the dead of night or putting their fates, and often their life savings, in the hands of smugglers. For obvious reasons, Mexico is far and away the largest source, representing a full 76% of people living in the United States in 2000 without documentation. Mexico is actually not included in our sample of heavily indebted countries. Even though it has a massive $140 billion debt load and is extremely poor by U.S. standards, it is not quite as poor or as heavily indebted as the others. And although it is questionable whether the political party that held power for most of the last century was democratic, Mexico is not widely considered an “odious” debt country. However, while it did not meet the criteria for this study, there is a strong argument that reducing Mexico’s debts would have tremendous benefits for Americans, given that our welfare is more intertwined in more ways with our neighbor to the south than perhaps any other poor country. Among the top 20 source countries of undocumented immigrants to the United States, nine are heavily indebted. No one would argue that debt is the single push factor. In the case of El Salvador, for example, it was the brutal civil war of the 1980s that drove nearly 300,000 people to flee to the United States without authorization, making it the second-largest country of origin. But political and economic problems tend to go hand in hand. After the 1992 peace agreement, El Salvador’s heavy debt burden made it difficult to provide adequate services and sustainable livelihoods. The poverty rate (percentage living on $2 or less a day) remains about 58%. Thus, even though thousands of undocumented Salvadorans were granted amnesty in the late 1990s, El Salvador remains the No. 2 country of origin of unauthorized U.S. residents. In addition, despite the improved political climate, Salvadorans have sought U.S. visas in large numbers. This tiny nation of 4.5 million was ranked eighth among countries of origin for legal migrants admitted to the United States between 1991 and 2002. The Philippines is another top 10 country on the unauthorized immigration list in which it is difficult to separate political repression from economics as push factors in migration. Between 1972, when President Ferdinand Marcos first imposed martial law, and the year of his defeat, 1986, foreign debts grew nearly 14-fold. Debt has deepened poverty as a push factor for Filipinos who then flow into family and village networks across the United States that began taking root during the period in the late 1800s and early 1900s when the Philippines was a U.S. colony.
Impact on Impoverished Countries In recent years, more than 300 people per year have died attempting to cross into the United States from Mexico. In desperate efforts to elude heavily fortified sections of more heavily populated border areas, many perish in the Arizona desert. As the United States pushes its border control efforts southward, more still will wind up maimed or killed in the arduous trek across Central America into Mexico’s southern border.
Those who do succeed in entering the United States are vulnerable to abuse by employers who can threaten to turn them in to the immigration authorities. Others face wrenching separation from family members and communities they have left behind. Even for those who do obtain legal status, it is difficult to bring relatives to join them.
Impact on the United States But the way the U.S. government has responded to immigration pressures has created a negative boomerang effect as well. Billions of dollars of U.S. taxpayer money has been spent every year on militarizing the border and other anti-immigrant measures—money that could otherwise have been invested in addressing the root causes of migration or funding U.S. social programs. Even before the post-September 11 boom in such spending, efforts to keep immigrants out of the country cost about $3 billion per year. Anti-immigrant groups claim this is an investment in protecting the American workforce. But these measures have been largely ineffective in meeting their stated goal of controlling unauthorized immigration. Moreover, accusations that immigration is bad for U.S. workers are largely false. A National Academy of Sciences study found that immigrants had no negative effect on wages for American workers, with one exception— the very low-skilled. Americans without a high school degree (about 15% of the workforce) earn an estimated 5% less than they would without competition from low-skilled immigrants. While this is a serious problem, it could be addressed more effectively by: 1) promoting debt relief and other measures that could reduce the economic pressures to emigrate in the home countries and 2) strengthening protections and investing in education for all workers in the United States, regardless of immigration status. But spending on anti-immigrant measures has far exceeded support for several key programs to strengthen the U.S. workforce. In 2000, such spending was double what was spent on school improvements, and more than three times as much as on vocational and adult education, training and other assistance for workers displaced by trade, and enforcing safety and health protections in the workplace. Care for Creation: USCCB’s Statement on Climate Change In celebrating 2007, a Sabbath Year, we are reminded that not only do we as humans need rest and rejuvenation, so, too, does the Earth. The increasing urgency of global warming should be a red flag to heed the scriptural call for liberation of the oppressed, which includes our planet. The cycle of Sabbath, every seventh day, year, and Jubilee, are moments of hope when God encourages us to right our wrongs, heal old wounds, reconcile with our enemies. It is a time to ask ourselves, “How are my life choices damaging the Earth and what can I do to walk more lightly on the planet?” In 2001, the United States Conference of Catholic Bishops (USCCB) published a statement on global warming titled “Global Climate Change: A Plea for Dialogue, Prudence, and the Common Good.” Based on Catholic social teaching, the Bishops’ statement reminds us that climate change is not about economic theory or political platforms, but rather the future of God’s creation and the one of the human family. Now, six years after the publication of the Bishops’ statement, we are called as stewards of God’s gift of creation, with even greater urgency to make significant changes to our current lifestyles and live in a more sustainable way so that future generations of both humans and the Earth may have life to the fullest.
To read the Bishops’ statement visit: http://www.usccb.org/sdwp/international/globalclimate.shtml. Peace & Reconciliation: World Bank to Add Fuel to the Flames in Iraq? In February, news leaked out that a World Bank staffer had been shot in Iraq. Given the rising level of violence and high U.S. and Iraqi casualties, this may seem hardly remarkable, except for the fact that World Bank operational policy explicitly states that the bank may only begin operations in a post-conflict situation when “there is a reasonable expectation of continued stability or of a sustainable … cease fire.” This can hardly be said to be the case in Iraq, yet World Bank President Paul Wolfowitz has begun contract negotiations to hire a resident country director for World Bank programs in Iraq. According to the Government Accountability Project, this strongly suggests that the bank is looking to expand its activities in Iraq, despite clear evidence of corruption and a deteriorating security situation. Furthermore, Wolfowitz is acting in direct opposition to even the bank’s own board of directors by increasing its presence in Iraq. What does World Bank President Wolfowitz hope to gain in Iraq? An ardent supporter and contributing architect of the original invasion, many, including people inside the bank, fear that he is using the bank to advance U.S. geopolitical interests, particularly to open up Iraq’s reconstruction and oil production to private foreign investment. Yet local and national control of resources, and the ability to distribute the benefits fairly, will be key to Iraq’s future stability. Furthermore, Wolfowitz has made fighting corruption his pet project at the World Bank. Yet corruption has shown itself through numerous reports to be rampant in the current conflictive environment in Iraq. Poorly monitored bank projects are bound to be a lucrative new source of income for corrupt officials. According to the Bank Information Center, “given the astounding amount of debt previously incurred by corrupt regimes, and current calls to cancel these ‘odious’ debts, how can the Bank reasonably turn a blind eye to corruption in post-conflict situations? Wolfowitz and the Bank must walk the talk with respect to corruption and Iraq.” The safety of World Bank personnel is not the only question to be asked of Wolfowitz in regards to the bank’s involvement in Iraq. In an ongoing conflict situation, there is a strong possibility that World Bank policies will only add fuel to the flames, causing increasing conflict rather than supporting peace-building and reconstruction. Tying Iraq’s reconstruction to loans rather than grants, with all the conditions and control implicit in those loans, is bound to undermine reconciliation efforts. For more information, please visit www.bicusa.org/en/Article.3210.aspx. Economic Justice: Vulture Funds Threaten Indebted Countries A new threat is circling, threatening to wipe out the benefits of debt relief for poor countries. So-called “vulture funds” buy the debts of impoverished countries cheaply, often when it is about to be written off, and then seek to reclaim the full amount plus interest, often suing in court. According to Jubilee UK, there have been about 40 such lawsuits filed against poor countries by commercial creditors with many still outstanding. In 1999, a company called Donegal International bought $30 million of Zambian debt from Romania at a mere $3.3 million. Donegal is registered in the British Virgin Islands. However, it is partially owned by Debt Advisory International, a company based in Washington, D.C. In 2005, Zambia qualified for debt relief, freeing up about $40 million to be reinvested in education and other social programs. Unfortunately, at the same time, Donegal re-emerged to sue Zambia for the full amount of the original debt plus interest, a sum totaling a whopping $55 million. A February 2007 court decision in the United Kingdom stated that while Donegal was not entitled to all of that claim, it could be entitled to up to $20 million with a final decision to be handed down in March or April. According to Jubilee Debt campaigner Caroline Pearce, quoted in the BBC, “Profiteering doesn’t get any more cynical than this. Zambia has been planning to spend the money released from debt cancellation on much-needed nurses, teachers and infrastructure. This is what debt cancellation is intended for, not to line the pockets of businessmen based in rich countries.” For more information about vulture funds, visit Jubilee UK’s website at www.jubileedebtcampaign.org.uk/?lid=2974
TAKE ACTION: Rein in Vulture Funds
www.jubileedebtcampaign.org.uk/?lid=2893 Columban News: Columban Priest Publishes Climate Change Book Fr. Sean McDonagh, a Columban missionary and environmental activist, has recently published a book on climate change called "Climate Change: The Challenge to All of Us." To obtain a copy please call the U.S. JPIC Office at (202) 529-5115 or send an e-mailed request to This e-mail address is being protected from spam bots, you need JavaScript enabled to view it , and we will be happy to help you. Other titles by Fr. Sean McDonagh include:
Resources & Events
-- Economic Way of the Cross 2007
-- REMINDER: Step It Up 2007
-- Earth Day Sunday 2007: The Food That Sustains Us
-- Jubilee Grassroots Training and Organizing Conference IN OTHER NEWS:
Care for Creation
“Peru’s Alarming Water Truth”
“When Organic Isn’t Really Organic”
“USDA Backs Production of Rice with Human Genes”
“Skeletons in the Cupboard: Illegitimate Debt Claims of the G7”
Migration
“Close to Slavery: Guest-Worker Programs in the United States”
“Uphold the Rights and Well-being of Women Migrant Workers”
Peace Contact Us
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