"JUBILEE" CAMPAIGN WANTS TO CANCEL ALL THIRD WORLD DEBT

October 6, 1999

An international "Jubilee 2000" campaign to cancel all Third World debt to the West, once thought to be dreamily naïve, is now catching fire as an issue. Once backed primarily by anti-Western ideologues and Religious Left organizers, proponents now claim the Pope, Billy Graham, the Archbishop of Canterbury, President Clinton and a host of entertainment celebrities as supporters.

The call for debt forgiveness is loosely based upon the Old Testament concept of "Jubilee" year. Every 50 years, the ancient Hebrews were supposed to cancel all debts. But most scholars doubt the Jubilee was ever actually observed in Israel. And the Christian church has never insisted on the concept as an economic doctrine.

But left-wing church groups, like the World Council of Churches, picked up "Jubilee" as a useful slogan connoting the redistribution of wealth. Through "Jubilee 2000," they have advocated the complete cancellation of hundreds of billions of dollars in debts by Third World governments to Western governments and international lending organizations, such as the World Bank and the International Monetary Fund (IMF). The implication is that Western leaders are the primary cause of chronic Third World poverty, and that the latter can be alleviated by defrauding the former.

A recent World Bank/IMF meeting in Washington agreed to $27 billion in debt relief. And President Clinton has advocated $1 billion in unilateral debt relief from the U.S., with the possibility of complete cancellation of $7 billion in debt to the U.S. by the world's poorest countries. But both Clinton and the banks have placed conditions on their offers: reduced corruption and more programs that directly benefit the poor.

It is not quite the sweeping cancellation that Jubilee 2000 seeks. But Jubilee activists see the offers as signals that their campaign is growing in popularity. They blame the West for lending to despotic Third World governments for political gain while ignoring how the money was often spent, i.e. on arms and personal enrichment. And they argue that Third World governments are now compelled to pay more in interest on their loans than on health care, education and anti-poverty programs.

True enough, but Jubilee proponents have been unable to explain how unconditional debt cancellation will necessarily benefit anyone other than the elites of still often despotic regimes. And they ignore indigenous causes of poverty that cannot be faulted on the West: Third World statism and economic mismanagement that stifle markets and inhibit economic growth.

The Jubilee 2000 Coalition, based in London, wants all Third World debts cancelled by next year. It portrays these debts as not only unfair but illegitimate. In its mythology, secretive Western lending organizations gave the money to undemocratic governments to create markets for Western goods and bolster pro-Western tyrants. Poverty and starving children were the inevitable result. The only salvation for the suffering poor of the Third World is a complete, unconditional and immediate debt cancellation.

Jubilee's proponents oppose conditions on debt relief that mandate freer markets and balanced budgets. A Jubilee 2000 pamphlet charges that such conditions would "undermine the sovereignty of indebted states" and "perpetuate or deepen poverty or environmental degradation." The campaign ignores the fact that much of the Third World remains under the throes of regimes that are openly dictatorial, or function only superficially as democracies as they seek to enrich ruling families or tribes to the detriment of most other citizens.

And Jubilee proponents ignore the debt forgiveness granted to Latin American governments during the 1970's. Within a few years may of these governments had already reacquired their full load of debt, much as a promiscuous credit card user will go shopping after finally paying off a credit card bill in full.

Furthermore, Jubilee advocates paint the Third World as homogenous, when in fact each country has unique debt and economic circumstances. Jubilee's supporters focus on freeing Third World governments from debt so those regimes can spend on the poor. But they tend to ignore the importance of private enterprise in creating wealth and reducing poverty.

And Jubilee's proponents treat Western debt forgiveness and additional aid as atonement for Western colonialism and exploitation of the Third World. As one characteristic statement from a liberal Anglican bishop in South Africa described the situation: "The old colonial powers no longer send gunboats and troops...They send the IMF instead." Governments that see a Jubilee debt cancellation as their deserved reparation are not likely to foster more thoughtful economic policies that restrict state spending and encourage private investment.

At their meeting last year in Britain, the worldwide communion of Anglican bishops endorsed Third World debt forgiveness but demanded accountability by Third World governments. Specifically the insisted that debtor nations should ensure oversight of loan contracts by legislative bodies, discipline corrupt government officials, and ensure that the benefits of debt relief are allocated for the poor.

"Total cancellation of Third World debt is not the solution," said Anglican Bishop Benjamin Kwashi of Nigeria. He cited the failed precedent of debt forgiveness for Latin America. "But selective debt reduction, e.g., the canceling or postponing of interest payments, will help the oppressed and promote the witness of the church."

Jubilee 2000 wants to claim Pope John Paul II and Billy Graham as unqualified supporters. But both have also called for mutual accountability in a gradual approach to debt relief. The Pope has been especially clear in stressing the church's compassion for the poor without claiming to endorse any specific economic solution to global debt.

Even more explicitly, a former agricultural missionary to Rwanda recently has written - surprisingly - in the left-of-center Christian Century that unconditional debt relief premised on Western guilt is not the answer.

"We in the West can not 'fix' the problems of the poor countries," Robert Snyder insisted. "The people themselves must rise up and say no to their corrupt power elites... Until this is done, debt relief will provide only a temporary respite, a time when leaders can rest more peacefully in their expensive villas. It will only camouflage the slow, under-the-surface boil in countries ruled by corrupt dictators and their minions."

Western governments and lending organizations should continue to grant some debt relief in exchange for practical economic reforms that can be effectively monitored. Meanwhile, more creative solutions should be explored before Jubilee 2000 is swallowed whole. One approach, based on the Brady Plan for Latin America of ten years ago, would exchange debt forgiveness for property. Western technology would then flow into inefficient, state-owned enterprises, creating trade, competition, employment and a growing private sector.

The original Jubilee in the Bible, proclaimed as a Day of Atonement, involved not just debt cancellation but also personal repentance. Resolution of the global debt "crisis" requires repentance not just by Western banks and governments, but also by Third World governments that have failed to allow freedom and prosperity for their peoples.