Oswald B. Firth OMI

(Ed. Note: the author is also the editor of "Social Justice", the monthly journal published by the Centre for Society and Religion.)

Hallucinations of Progress

The world is fast approaching the dawn of the Third Millennium. Considering the crisis of dehumanising poverty, malnutrition and viral diseases, interminable wars and outrageous violence in all their weird forms, disturbing levels of youth unemployment, devastating hunger, destruction of bio-diversity and the gradual deterioration of cultural values, what emerges is a bleak picture of the Twentieth Century whose life is gradually ebbing away.

The Twentieth Century may have scored its victories in the field of high-tech, but it has left the Third World people crushed and crumpled under the insurmountable burden of debt. The travails of the poor as cited above is a cruel tale of woe caused by international debt which defies the hallucinations of ‘progress’ we were all beguiled into believing. Only the most blinkered could retain an unalloyed faith in the notion of human progress at the end of the Twentieth Century of which the philosopher Isaiah Berlin has said: "I remember it only as the most terrible century in human history". Only those who have forfeited the spirit of resistance and struggle for justice would concede even a modicum of credibility to the asinine words of Francis Fukuyama that with the so-called conquest of capitalism over socialism at the end of the Twentieth Century humanity had finally reached the "end of history".

Struggling for an Alternative

The multifarious struggles of the world’s people for greater control over their own lives, for decent standards of health, education, nutrition, for social justice, for peace and civil rights are signs of hope and evidence enough that there are alternative models to capitalism and that Fukuyama’s dream is a fallacy that would send neo-modernists reeling with laughter. The words of the Latin American revolutionary, Ernesto ‘Che’ Guewara, will add a wealth of meaning to the aspirations of the poor who envisage a different history where life is valued over debt. "The life of a single human being" says Che "is worth a million more times than all the property of the world". ‘Che’ Guewara may fail every possible test to qualify as a saint, but it is very unlikely that he was far removed from the well-springs of wisdom and the vicissitudes of human suffering.

Of course, the balance sheet at the end of the Century can point to amazing improvements, not the least in higher life expectancy and declining infant-mortality rates all over the world. But all too much of the progress has been for the benefit of the richest fifth of the world’s people, who now receive over 80 per cent of the world’s income compared to the 2 per cent earned by the poorest fifth as pointed out very poignantly by one of the more recent millennial authors, Clive Ponting, in his book Progress and Barbarism: The World in the Twentieth Century (1998).

The Debt Burden

Only sycophants will refuse to be bestirred by the monumental damage to the poorest of humanity caused by one of the principal forces of destruction, viz. International debt. This monstrous behemoth has robbed the poor of their dignity and drained out their life. The total external debt of the developing countries, as it stands today, is over US $ 2.2 trillion; that of the forty most impoverished and indebted countries amounts to about US $ 214 billion. In many cases, the poorest countries cannot even pay the interest on their debts, let alone the principal, without an unacceptable cost to health, education and nutrition.

For example, Ethiopia spends four times more on debt service repayments than on health, yet 100,000 children die each year from easily preventable diseases. In Tanzania, debt service repayments were equivalent to nine times the government’s spending on primary health care in 1997, yet almost a third of the population dies before reaching the age of forty. In 1998, Mozambique’s annual debt service obligation was over half of its public revenue. In a country still emerging from a sixteen-year civil war, half the rural population does not have access to safe drinking water; 200,000 children die annually from preventable diseases such as malaria, measles, and respiratory infections; two thirds of adults are illiterate; and most children have been forced to abandon primary school. Could the civilised world permit such demented aberrations any further?

Sensitised to the slow death debt was causing to the people of the Third World, Cardinal Roger Etchegary, head of the Vatican’s Commission for Justice and Peace, summed up the sufferings of those sunk in the quagmire of debt in his An Ethical Approach to the Inter-national Debt Question: "Debt servicing cannot be met at the price of the asphyxiation of a country’s economy, and no government can morally demand of its people privations incompatible with human dignity".

The Root of the Crisis

The international debt crisis became apparent in 1982, when Mexico announced it could not pay its foreign debt, sending shock waves throughout the international financial community as creditors feared that other countries would do the likewise. The immediate cause of the crisis occurred in 1973, when the members of the Organisation of Petroleum Exporting Countries (OPEC) first quadrupled, then doubled the price of oil and invested their excess money in commercial banks.

The banks enticed developing countries into taking loans, often with no monitoring whatsoever of how these loans were to be used. The fact is that much of the money borrowed were wasted on programmes that did not benefit the poor ­ purchase of military hardware, large scale development projects such as mega dams, and private projects benefiting government officials and a small elite. Certain dictators spirited away the funds and deposited them in foreign banks. Worst still, the rise in oil prices created a significant rise in inflation in the Third World, exports declined and the domestic cost of production turned out to be prohibitive to the small investor.

Debt Reduction Initiatives

In October 1996, the World Bank and IMF reached an agreement on the first ever comprehensive debt reduction plan to enable the debtor country to pay back its loans without building up arrears again in the future. The scheme included 41 countries classified by the World Bank as ‘Heavily Indebted Poor Countries’ (HIPC). As a condition for debt relief, the HIPC had to implement Structural Adjustment Programmes (SAP) approved by the World Bank and the IMF. These SAPs called for cutbacks on social expenditure (i.e. health and education), retrenchment of public sector employees, closure of local small industries facing competition from abroad, low wages and degrading working conditions, currency devaluation, focus on export even of natural resources, recruitment of women to work in sweat-shops at subsistent wages, etc. In practice, however, the shortcomings of the HIPC initiative are causing paroxysms of pain in the body politic of many of the selected countries. To begin with, indebted countries need relief now, not three or six years in the future, as the HIPC framework suggests. For example, Uganda, the first country evaluated for debt relief, adhered to all the demands of Structural Adjustments for ten long years. This country is now being asked to wait for another year, which will result in an additional debt of US $ 200 million for which no relief is foreseen. The other flaw in the framework of debt relief is that too little relief is available to bring debts to sustainable/payable levels. The World Bank has set aside only US $ 2 billion for debt relief, whereas Third World debt stands at US $ 2.2 trillion right at this moment. In any event, only 14 of the 41 HIPC countries will have cleared the WB/IMF hurdle by the millennium.

The Pope’s Call

Pope John Paul II observing the Third World’s tryst with the backlog of Un-payable debt has declared the year 2000 as a "Jubilee Year", which, according to the Book of Leviticus (25/8-15), calls for the reparation of injustice committed against the poor by an outright cancellation of all their debts. Translated into terms that can metamorphose the frustrations of the poor into aspirations of hope for a fresh beginning in life, the admonition reads: "Christians will have to raise their voice on behalf of all the poor of the world, proposing the jubilee as an appropriate time to give thought…to reducing substantially, if not cancelling outright, the international debt which seriously threatens the future of many nations"
(Tertio Millennio Adveniente, 51).

While the Centre for Society and Religion resolutely subscribes to the challenge being addressed by the Pope to creditor nations and international monetary institutions, it wishes to reiterate the brazenly outrageous fact that the debts incurred by poor countries (often dictatorships) neither had the consent of the poor nor were the loans obtained in any way used to ameliorate their conditions in life. The nemesis the poor look forward to must necessarily transcend debt cancellation. They demand compensation for stolen resources and the impoverishment of their generations, made possible with the connivance of corrupt local rulers, who operated under the dubious umbrage of political stability for economic growth, even at the cost of denying human rights, the sad and opprobrious outcome of which has been an unpayable international debt.