Putting Life Before Debt
As Catholic Bishops from both debtor and creditor countries, meeting on the eve of the Cologne Economic Summit, we reaffirm the urgent need to break the chains of unpayable foreign debts of poor countries.
Ordinarily, the principle that debts must be paid is just. However, it is unjust to demand repayment when this results in policy choices that lead to hunger and despair for millions of people.
As we approach the year 2000, we recall the biblical tradition of the Year of Jubilee (Leviticus 25, 8-55) which challenges us to restore just relations within the community by freeing captives, by restoring land to its rightful owners and by forgiving debts. We recall likewise that at the beginning of his ministry Jesus quoted the prophet Isaiah: "I have been sent to proclaim a year of favour from the Lord, to bring good news to the poor, announce deliverance to captives and bring freedom to the oppressed" (Luke 4, 18-19). Jesus taught us that whatever we do to the least among us, we do to him. And when we pray, we ask that our debts be forgiven in the same measure as we forgive others’ debts.
Today, we need to bring liberty to those enslaved by unpayable foreign debt. This is an essential first step towards restoring just relations within the broad human community and toward eradicating poverty in our day. While removing this debt involves costs for the creditors, those costs are very small compared to the price paid by the poor. They had no voice in contracting the original debts, but have serviced that debt, at the cost of their health, education and life-expectancy; indeed some of the youngest and most vulnerable may have paid with their lives.
The problem of debt is far more than an economic one. It involves fundamental questions of ethics. It radically affects people, the well-being of families, the survival of the poor, the bonds of community and the hope of building a secure future.
The help that is needed today is not a question of charity but of justice.
In our call for lifting the burden of debt, we are aware that responsibility for the current debt problems is shared by creditor and debtor nations. Therefore, we propose that creditors and debtors together, each according to their abilities, take responsibility for resolving this intolerable situation.
We are not alone in taking this stand. Both in our church and in other Christian denominations worldwide there is broad consensus. There is wide-ranging support for the Jubilee campaigns in debtor and creditor countries. We also draw attention to the results of the Eighth Assembly of the World Council of Churches at Harare and the Lambeth meeting of the Anglican Communion, both in 1998.
On the political front, there are also new, encouraging initiatives. In the forthcoming Cologne Economic Summit, the G7 governments are expected to introduce proposals for debt relief that go beyond the current programmes. We recognize also the efforts of the World Bank and the International Monetary Fund. However, these steps, welcome as they are, are not enough.
Catholic social teaching provides standards for guiding the moral behaviour of individuals and the construction of just societies. These include:
Committed to the values that inspire these standards, we make the following recommendations to enable debtor countries to achieve true human development, rather than merely to restore their capacity to repay foreign debts:
1. The prompt reduction of foreign debt in poor countries is an essential step toward the eradication of poverty.
Eliminating unpayable foreign debt by itself is not enough. All governments, from the North and from the South, must commit themselves to removing the shame of human poverty. They must take further steps, according to their abilities, such as: increasing development aid; adjusting trade policies, particularly those which discriminate against products from poor countries; and developing sustainable lifestyles and production patterns. It is especially important that all governments be more transparent and accountable to their own citizens, and more respectful of the rule of law and of basic human rights.
2. Debt reduction must be deep and designed to benefit the poor.
The guiding principle must be that meeting the basic human needs of people takes precedence over repayment of debt. The amount of debt reduction must be sufficient to free up the funds needed to meet basic needs, such as health care, education, and basic infrastructure. Arrangements must be put in place to ensure those funds are used to improve the situation of the poor. Poor countries that commit themselves to this task should be given preferential treatment.
3.Transparency and participation by civil society, including churches, non-governmental organizations, and the poor and marginalized as stakeholders, are essential to agreements to forgive debt, to allocate the freed resources and to provide future grants and loans.
In this way, debtor governments can be held accountable by and to their own citizens. This will reduce the risk of future debt crises. The International Monetary Fund and the World Bank have both learned that unless local people are truly able to participate, external terms and conditions remain ineffective.
4. Existing debt policies must work faster, be more substantial and include more countries.
Of the original 41 countries eligible for debt relief through the Heavily Indebted Poor Country Initiative in 1997, so far only 7 have been judged eligible and only 2 have actually received debt relief. Uganda, the country which has so far complied best with IMF demands is already in need of further debt relief. These results indicate that measures taken to date fall far short of what is needed to resolve the debt problem for poor countries.
5. The current Structural Adjustment Programmes must undergo serious reform.
Responsible national economic policies can take many forms. The standard policy prescriptions of the international financial institutions must be modified in order to reduce poverty in the short-term, to protect the environment and to incorporate transparent and participatory processes.
6. Fairer relationships between creditor and borrower governments should be established.
An arrangement between an external creditor and a poor country is inherently unequal. The introduction of an arbitration procedure with neutral arbitrators could be an important step towards redressing the imbalance between creditor and debtor interests.
7. The political will needs to be summoned for the policy changes, legislation and funding required for broader, deeper and quicker debt reduction.
Such funding must come in addition to aid. Donors must reverse immediately the decline in overseas development aid.
We urge the heads of state and government gathered in Cologne for the Economic Summit to take prompt and comprehensive action to reduce substantially or cancel altogether the debts of poor countries and to restore just relations among peoples. This task must be tackled with the utmost resolve. Courage and far-sighted leadership are required.
Cologne, June 13, 1999
Bishops present and signing:
+ Edmundo Luis Flavio Abastoflor Montero, Archbishop of La Paz, Bolivia
+ Robert J. Banks, Bishop of Green Bay, USA
+ Fernando Charrier, Bishop of Alessandria, Italy
+ Vincent Concessao, Archbishop of Agra, India
+ Dennis H. De Jong, Bishop of Ndola, Zambia
+ Dr. Franz Kamphaus, Bishop of Limburg, Germany
+ David Every Konstant, Bishop of Leeds, Great Britain
+ Antonio Ledesma SJ, Bishop of Ipil, Philippines
+ Dr. Karl Lehmann, Bishop of Mainz, Germany
+ Bishop Diarmuid Martin, Secretary of the Pontifical Council Justitia et Pax, Vatican City
+ Pierre Morissette, Bishop of Baie Comeau, Canada
+ L. Monsengwo Pasinya, Archbishop of Kisangani, Dem. Rep. Congo
+ Cardinal Polycarp Pengo, Archbishop of Dar-es-Salaam, Tanzania
+ Oscar Rodriguez Maradiaga S.D.B., Archbishop of Tegucigalpa, Honduras
+ Albert Rouet, Bishop of Poitiers, France
+ Cardinal Christian Wiyghan Tumi, Archbishop of Douala, Cameroun