Debt

The second half of the month of October coincides with several “Calls for Action” all related to the quest for the alleviation of the status quo of people in the developing world.  October 15 is the anniversary of the death of former Burkinabe president Thomas Sankara who called for a cancellation of debt, on the 16 of October, the world celebrates World Food Day. The United Nations has since 1992 recognised October 17 as the International Day for the Eradication of Poverty and on this day last year over 23 million people in 87 countries “stood up” against poverty. October 20 is World Youth Day and on October 20-22, Washington will host the Annual Ministerial Meeting of the International Monetary Fund (IMF) and the World Bank. All these significant dates and actions that would be taken by citizens around the world to commemorate the days relate to one crucial issue that affects the lives of people in the south, poverty.

Africa South of the Sahara in particular experienced an increase in its debt burden, from approximately $ 60 billion in 1980 to about 230 billion in 2001. During this period, approximately $300 billion was repaid, but there continues to be a geometric increase in the debt, as a result of what Patrick Bond (Director of the Centre for Civil Society, University of KwaZulu-Natal, South Africa) considers to be high rates of interest imposed on the amounts owed. A great proportion of the debt owed by the south is “illegitimate” and “odious,” because to start with, the funds did not trickle down to the very people who need them most. Given that developing countries owe more than $ 500 billion to International Financial Institutions (IFS) and other western governments, I find it important to pose the question: Will some of these countries ever be able to pay these debts?  Some countries in Africa pay as much as $ 100 million a day as interests on loans. The debt question is closely associated with the inhibition of poverty especially when one takes into cognisance the targets set in the Millennium Development Goals (MDGs). If developing countries are to achieve MDG 1 of halving poverty by 2015, the international community needs to seriously implement most of the promises made, related to debt relief and reduction, as several countries in Africa actually spend more money servicing debts than they do for health and education. According to OXFARM New Zealand, a country like Zambia spends $150 million more on debt servicing than they do on education and Ghana spends more on debt, than for example, on health.  According to EURODAD, a European Network on Debt and Development “because the International Financial Institutions enjoy ‘preferred creditor status,’ even extremely impoverished countries face strong pressure to divert resources to pay multilateral debts.”

As a result of much pressure on the west and IFS following the realisation that some countries will never be able to pay their debts, the Highly Indebted Poor Countries Initiative (HIPC) was initiated in 1996 and in 2005 the HIPC initiative was enhanced by the Multilateral Debt Relief Initiative (MDRI) that called for a principled 100% relief of debts by countries that meet the conditions of the HIPC Initiative and for only a handful of the international financial institutions-the International Monetary Fund (IMF), the International Development Association of the World Bank, the African Development Bank and later on the Inter-American Development Bank as well as the Asian Development Bank.  The HIPC Initiative called for the cancellation of about 50% of debts of countries deemed to be very poor and highly indebted and these countries were selected based on a select economic criteria and had to proceed with the implementation of strict conditionalities in order to qualify for debt relief. These initiatives have not been able to resolve the debt crisis because: firstly, they are accompanied by certain economic conditions which sometimes include privatization of certain state corporations/enterprises and services, retrenchments in key sectors and the liberalization of trade as well. Secondly, some countries that desperately need to have their debt cancelled so as to be able to achieve the Millennium Development Goals by the target date are excluded from these initiatives.  Thirdly, the European Network on Debt and Development notes that the initiatives do not include the complete cancellation debts owed by the selected countries. And lastly, the institutions directly involved are just four in number- the IMF, the Development Association of the World Bank, the African Development Bank and the Inter-American Development Bank, these excludes other western countries and organisations.

The resolutions undertaken during the 2005 Gleneagles G8 Summit on debt, not to mention trade and aid were just a fraction of the many other unfulfilled promises made to the developing world. The G8 leaders agreed in principle to cancel about $ 40 billion of debt for highly indebted countries in Africa as part of their “renewed commitment to Africa,” but two years after Gleneagles, the debt crisis is being aggravated by what EURODAD terms “vulture funds.” The total amount of debt owed by countries in sub-Saharan Africa is above  $300 billion while about 2.4 trillion is owed by the entire developing world. The G8 leaders have not been completely able to practice the democracy they preach in terms of promises made to the South, this comes at a time when it is becoming increasingly evident that some world leaders have misplaced priorities, especially when one takes into consideration the fact that the United States spends over $4 billion a month on military operations in Iraq, not to mention the over $ 400 billion -a-year military budget, while there is the persistence of  extreme poverty, the HIVAIDS virus , malaria and tuberculosis affecting the lives of millions of men women and children in the developing world.     

Civil society organisations around the world as well as member countries in the developing world, together with citizens in the west are therefore standing up to say Pacta sunt servanda, promises which have been made by the international community should be fulfilled before more commitments are made.

The imposition of economic conditionalities should be reviewed because they do not take into account the domestic priorities of states and some have adverse repercussions on the very poor. Instead, developing states should have the flexibility of charting their own development priorities.

The 100% debt relief promises advanced by G8 leaders in Gleneagles is not at all reflective of the status quo because the debt relief package does not include total debt relief and just 18 countries are to date included in the package, while those clamouring for the cancellation of debts say the actual number of countries should be no less than 60. 100% debt relief should include all countries which are heavily indebted, total debt relief for all the countries and debt owed to the international community as a whole and not just to the four International Finance Institutes that are part of the HIPC Initiative.  

The international community must take full responsibility for the cumbersome nature of the international financial system as we all rise up on October 17 to say “we stand up against poverty” and the time to act is long overdue.

References

• EURODAD, “Debt Overview,”  www.eurodad.org/debt/?d=110
• EURODAD, “Week of Global Action Against Debt and IFIs 2007-10-05” www.eurodad.org/debt/article.aspx?id=1148&item=01702
• EURODAD, “Multilateral Debt,” www.eurodad.org/debt/?id+112

• EURODAD, “Illegitimate Debt,”  www.eurodad.org/debt/?id=14

• Patrick Bond, “A Review of Progression and Regression in Debt, Aid, Trade Relations, Global Governance and the MDGs,” AFRODAD Occasional Papers, Issue No 3 February 2006, p.4.  

 “Take the first step in faith. You don’t have to see the whole staircase, just take the first step”                                      

Martin Luther King jnr

The Global Call to Action against Poverty (GCAP) decided in Beirut in March 2006 to continue its work. Policy demands contained in the Johannesburg statement were confirmed in Beirut, with an emphasis on national accountability. Indeed, the issue of governance was brought to the fore and campaigners from the South and the North mentioned the importance of dealing with governance in their countries while also tackling global issues of debt, trade and aid. The decision was taken to keep our global policy messages at a broad and inclusive level in order to incorporate diverse sections of civil society at the global level. However, at the regional, national and local levels, more clearly focused and detailed policy constructions and messages targeting national governments and national change agendas are necessary.

We see now GCAP coalitions developing their demands and messages, based on the broad policy framework of the Beirut Declaration.

National platforms have increased from only 15 in January 2005 to approximately 115 in September 2006.  The formation of autonomous national platforms was part of the plan, building at the national level on existing organizations and networks, based on their own national concerns and contexts. The process of building a global campaign based on national coalitions and networks is very much a process in the making. The potential for building on existing coalitions, networks and organizations, of mobilization, varies by region and country depending on the political environment, the existence or strength of NGOs and existing coalitions and networks.

New partners are coming on board every week. Since there were less global events this year, coalitions focused on their own calendar, and respond to social and economic justice needs. The G20 was meeting in Australia, and Make Poverty History (MPH) Australia has been acting and supporting the involvement of other coalitions concerned, such as the South-African coalition. Hopefully, the actions promoted by MPH Australia will inspire follow up in South Africa in 2007. Equally, the Japanese coalition was involved in the civil society preparations for the G8 in Germany, as Japan will host the 2008 G8.

The way the campaign operates is therefore changing. GCAP 2006 is less driven by global events. The emphasis is on national demands and activities. GCAP campaigners support each other and national coalitions by sharing experiences, best practices, knowledge, analysis, materials and tools.  As a consequence, the 2005 International Facilitation Group became the International Facilitation Team (IFT), in which all regions are represented.  It took time to establish this international steering committee, but it is now fully operational; its members voice concerns, actions, from all parts of the world. The IFT represents national coalitions, international organisations, youth and children, workers and religious constituencies. Similar structures were established at the regional level, with the Asian, African and Latin American Facilitation Teams.

Where Are We Coming From?

GCAP was initiated as an international alliance of organizations, networks and national campaigns to pressure world leaders to act on poverty and hold them accountable for commitments they have made regarding debt, trade and aid.  It was conceived as a direct response to the opportunity (and challenge) presented by the congruence of three major international events to take place in one year, 2005. GCAP’s demands set forth in the Johannesburg Statement, adopted by consensus of 60-70 diverse organizations called broadly for eradication of poverty, trade justice, debt cancellation, significant increase in the quantity and quality of aid, and national efforts to eliminate poverty, with achievement of the MDGs as a first step.  GCAP’s goals were and are by necessity broad, to accommodate the very wide spectrum of viewpoints expressed by those present. Given accountability of representatives to their own organizational constituencies, the construction of a statement broad enough to encompass the whole, yet sharp enough to present an effective policy and lobbying platform meant that the consensus was a fragile one, and its maintenance a key challenge.

Justice delayed is justice denied

“First, was the realisation that there is a huge gap between the rhetoric of working to make the world a just place and the reality of implementation, particularly from those that wield immense power. So while we acknowledge the progress made every day in the lives of ordinary people around the world as a result of action taken by ordinary citizens for the public good, we must also acknowledge that ‘justice delayed is justice denied’’

An assessment of achievements reached in the course of 2005/2006 in relationship to the goals of the Johannesburg Statement would need a close monitoring. Multilateral debt write off, commitment to the largest single ODA increase ever, reduction of export subsidies by 1 billion/euros/year by 2013, and other gains made at the three international fora must be limited by the conditions attached to them. Above all these include forced expansion of liberalization and privatization, leading to erosion of public services and greater impoverishment.

Some gains were made in the area of gender equality through extensive collaboration among women’s groups.  The GCAP Feminist Task Force contributes to a growing recognition of the interrelationship of issues, help reconsidering the Johannesburg Statement, making stronger connections between issues of debt, aid and trades and the complex web of other human rights and social development issues.

While it is difficult to measure the policy impact of GCAP, there were some notable achievements in terms of constituency building.  The value of the various planned activities, concerts, stunts, demonstrations, lobbying, etc. was thought to be in their combination, rather than one or another singled out.  Some of the achievements were the increased mobilization with synergy created by the combination of high profile activities: concerts, stunts, demonstrations, march, etc., and the extensive global recognition of the white band, to symbolize a growing global social movement around issues of poverty. The political influence with elected political officials and leaders made possible by the mass mobilization, and the recognition and respect for GCAP in international fora, with space created for civil society input, e.g. the GA Informal Interactive Hearings. Finally, GCAP supporters wrote valuable MDG shadow reports, produced useful tool kits and information materials and established new and productive working relationships

A Global Call and a Modern Campaign

Some associations and partnerships have influenced the way in which GCAP is perceived, both to its benefit and its detriment.  Some saw GCAP as focusing on high visibility to the detriment of grass-roots mobilisation. At the same time, building on existing coalitions is central to GCAP’s strategy.  All our efforts this year were directed to dovetail with existing mobilizations and movements in order to gain support and achieve widespread mobilization. The need to create effective ties to national entities of such international bodies as the ITUC, and faith-based organizations operating at the local level has begun, with emphasis shifting from global fora and events to the regions and national platforms. 

Is this Global Call a Modern Campaign? Definitely, as the emblem of the campaign –the white band- and its national variations are in itself very appealing to the youth constituencies. GCAP uses a combination of actions: lobby work at the UN, the EU the AU and at government levels; evidence based advocacy with the public presentations of MDG shadow reports; media work and celebrity support, stunts, concerts; traditional marches, vigils and pickets; but also online campaigning, e-action using email, sms, faxes.

2006 Month of Mobilisation

The Global Call to Action against Poverty (GCAP) Month of Mobilisation 2006 was launched on September 16.  Coinciding with the World Bank (WB) / International Monetary Fund (IMF) Annual Meetings, the launch aimed to highlight the harmful impact of World Bank and IMF policies on poor countries. Under the slogan of ‘We Must Have a Voice’,  GCAP highlighted the role the IMF and World Bank play in restricting the ‘voice’ of poor countries in determining their own economic policies, as well as highlighting the lack of ‘voice’ that poor countries have in the way the two institutions are governed. 

The Month of mobilisation culminated with the Stand Up against poverty event: between 11am on Sunday 15 October and 11am on Monday 16 October, 23,5 millions  people from all over the world stood up against poverty. They rose from sitting or kneeling to a standing position for one minute, while someone read a STAND UP pledge.

Will GCAP Make History?

GCAP did not make poverty history in 2005, but GCAP is truly based on the amazing efforts done by all the existing anti-poverty campaigns of the world. GCAP might make history by connecting CSOs and supporting their engagement with decision-makers at all level. If one should recognize that GCAP remains a fragile alliance, we see CSOs getting together and developing common actions and demands, based on the Beirut Platform. Some are using GCAP outreach to showcase their specific and unique experience and knowledge. Most of us know that CSOs are essential in the difficult exercise of “localising the MDGs” and of the promotion of the UN agreed goals.

There is an emergency. The crisis of poverty and inequality has reached an unbelievable scale. Over thirty thousand children are dying every single day just because they don’t have clean water, enough food or the most basic of medicines. More people have died from extreme poverty in the last ten years, than all of the wars of the 20^th century put together. And the most tragic thing about all of these deaths is that we can afford to stop them. The world has never been richer, yet we have never left so many to die. For all civil society and members of the public, GCAP is your call to get involved and show the world that we are a strong voice that cannot be ignored.

IFT Support team at CIVICUS - January 2007

CIVICUS provides support to the GCAP International Facilitation Team, with a small team, based in Johannesburg, South Africa. One of CIVICUS’ overall goals is to work towards breaking down barriers to effective collaboration within civil society. The MDGs initiative allows for the possibility to achieve this goal. Engaging around the MDG campaign will boost civil society’s capacity to engage national governments and intergovernmental bodies, while increasing their collective experiential knowledge of the politics and operational dynamics of engagement with governing institutions.