Time to End Debt Slavery

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Mark Weisbrot
Calgary Herald, October 20, 1999
Knight-Ridder/Tribune Media Services, October 12, 1999

It has become a truism that "there are no easy answers" to the world's most pressing economic and social problems. The phrase is often repeated by academics, policy wonks, and others whose occupation immerses them in the details of real or imagined solutions. It is worth remembering that the abolitionists who fought against American slavery right up to the Civil War were told the same thing by those who advocated a "go slow" approach, and were long regarded as extremists for their uncompromising moral stance.

Today's movement against the debt slavery of the world's poorest countries faces similar obstacles. First and foremost is the enormous, entrenched power of the slaveholding class-- represented by the International Monetary Fund and its controller, the United States Treasury Department.

As the worldwide movement for debt cancellation has grown-- including a 17 million-signature petition presented at the G-7 meeting in June-- the overseers have offered a series of concessions designed to minimize debt relief while maximizing their control over the subject countries. For the most part they have proposed to cancel only a fraction of the "phantom" debt-- the part that everyone knows cannot be repaid. Thus there will be no significant reduction in the amount of money that is drained annually from most of the world's poorest countries to service their debt.

But it's even worse than that. The latest initiatives, including those approved at the recent IMF/World Bank meetings, leave the IMF in control of debt relief. This is like putting Kathie Lee Gifford in charge of enforcing international labor rights. Before qualifying for even "phantom debt" reduction, countries will have to complete at least three years of the IMF's "structural adjustment" programs, which have caused so much poverty around the globe. These programs ought to carry a warning label that reads "Caution: This medicine has been shown to cause reduced growth, higher unemployment and poverty, and lower levels of education and public health."

Since the IMF and the World Bank began structurally adjusting Africa in the early 1980s, income per person has actually fallen by about 20%. In Latin America, it has basically stagnated. If that isn't enough to indicate a failed experiment that has gone on way too long, just look at what these same people have done to Asia, Russia, and Brazil in just the last two years.

The Fund's "structural adjustment" programs have become so discredited that it is now proposing to change the name of its "Enhanced Structural Adjustment Facility" to the "Poverty Reduction and Growth Facility." As in George Orwell's "Ministry of Truth" and "Ministry of Love." Debt Slavery is Freedom.

There are other maneuvers taking place in the US Congress.  One is an attempt by the IMF to use some of its gold reserves to replenish its newly named Facility. Such a move would only increase the power of this already unaccountable institution, and should be defeated.

The other is a bill, put forward by House Banking Committee Chairman Jim Leach (R-IA), which would cancel debt owed by 42 "Heavily Indebted Poor Countries" to the US government. This would be fine, although it's a small fraction of these countries' debt. But the bill unfortunately follows the G-7/IMF lead by tying debt relief to the IMF's structural adjustment.

No one should be fooled by President Clinton's announcement that the debt to the US government will be cancelled. For all his fine language about "the moral and economic urgency of the issue," he has offered nothing more than the Leach bill, and would maintain the system of debt slavery.

The case for unconditional and immediate cancellation of the poorer countries' debt grows more compelling each day. Most of the countries up for relief are in Sub-Saharan Africa, where 22.5 million people are infected with the AIDS virus. Who can justify forcing Zimbabwe to pay a quarter of its export earnings to debt service, when 26 percent of the adult population there has HIV/AIDS? Or squeezing a similar amount from Uganda, which has the world's largest proportion of orphans?(1.7 million, mostly due to AIDS). Or trying to collect on the $12.3 billion tab that the former dictator Mobutu piled up in Zaire (now the Democratic Republic of Congo)?

The great abolitionist and former slave Frederick Douglass had little patience for the gradualists in the anti-slavery movement of his day, those would delay the inevitable at the cost of enormous human suffering. Responding to one, he said: "If the reverend gentleman had worked on the plantations where I have been, he would have met overseers who would have whipped him in five minutes out of his willingness to wait for liberty."


Mark Weisbrot is co-director of the Center for Economic and Policy Research, in Washington, D.C. He is also president of Just Foreign Policy