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Without debt relief, the developing world has little hope of economic progress, say the Rev. John Welch* and Ruth Messinger*.

The two members of Jubilee USA argue for debt cancellation in the poorest countries in a compelling article published in the Pittsburgh Post Gazette on the eve of the G-20, the international financial summit being hosted by President Obama.

According to the two religious leaders, “The global financial crisis, which has devastated families in Western Pennsylvania and nationwide, is having an even more dire impact in the developing world. Throughout sub-Saharan Africa and the rest of the global South, children who should be in school are instead hospitalized with diseases that could have been prevented with simple vaccinations. But the money many of these countries should be spending on basic education and health care is instead being funneled to multilateral banks in the form of steep debt payments.

The affected countries didn’t land in this predicament just by their own irresponsibility. If anything, they are paying the price for recklessness on Wall Street. They have often been victimized by bankers who aggressively made loans to brutal and corrupt governments, knowing full well that those loans would not benefit the people. In many cases, soaring interest rates and compound interest make it impossible for these countries to eradicate debt even after scrupulously making their payments time and again.”

Read the article in its entirety.

*Rev. John Welch, vice president for student services and dean of students at the Pittsburgh Theological Seminary, is president of the Pittsburgh Interfaith Impact Network (www.piin.org). Ruth Messinger is president of the American Jewish World Service (www.ajws.org).

The Oblate JPIC Office joins other members of the Jubilee USA Network in welcoming the news that, at last, Haiti has reached “completion point” in the Heavily Indebted Poor Countries program.

This step means the cancellation of $1.2 billion in external debt owed by the impoverished island nation to bilateral and multilateral lenders including the IMF, World Bank, and US government. The Boards of the World Bank and IMF met on June 30 to formally approve Haiti’s debt stock cancellation under HIPC and the Multilateral Debt Relief Initiative.

“Today’s action to free Haiti of its unjust and unpayable external debt is a welcome and long overdue step. Debt cancellation will provide desperately needed relief for the people of Haiti,” said Neil Watkins, Executive Director of Jubilee USA Network, an alliance of religious groups, development agencies, and human rights groups that has campaigned for Haiti’s debt cancellation for more than five years.

Haiti suffered through a serious of humanitarian crises in 2008 and endured the devastating impact of four hurricanes. Sharp increases in food and energy prices have also led to an escalation of hunger among the poorest sectors of the population. And Haiti now faces the severe and negative effects of the recent downtown in the global economy.

Through this time of crisis for the island nation, a coalition of political leaders and organizations has pressed for the immediate cancellation of Haiti’s debt. US organizations including Jubilee USA Network, Institute for Justice and Democracy in Haiti, TransAfrica Forum, the Quixote Center, Center for Economic and Policy Research, the Episcopal Church, and Partners in Health worked together to build the political will in the US for Haiti’s debt cancellation, in partnership with colleagues in Haiti, throughout the Americas, across Europe and around the world.

In the US, a bi-partisan coalition of 72 Members of Congress signed a letter to World Bank President Robert Zoellick in February 2009 urging immediate debt cancellation for Haiti. In April 2009, the Obama Administration announced it would cover up to $20 million in debt service payments from Haiti until Haiti reached completion point.

Haiti – the most impoverished nation in the Hemisphere – faced a long struggle to achieve debt cancellation, facing repeated delays under the World Bank/IMF Heavily Indebted Poor Countries (HIPC) Initiative. Haiti’s completion point date was repeatedly pushed back by the World Bank. Jubilee USA and its partners have long argued that much of Haiti’s debt should be considered odious, dating back to loans contracted and often stolen by the brutal Duvalier dictatorships.

For more information, read the World Bank press release on Haiti’s completion point.

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Read our Action Alert for more information and details of how you can help.

Debt Cancellation: A Victory for the World

By: Desmond Tutu

Last month, the House of Representatives showed leadership in the fight against global poverty by passing the Jubilee Act for Responsible Lending and Expanded Debt Cancellation, which would extend lifesaving debt cancellation to more poor nations around the globe.

Too many of the world’s poor children needlessly starve or go without education because too many impoverished nations – even after the laudable debt relief provided to date – are still funneling scarce resources to multilateral banks instead of paying for needs at home.

The world community has found crushing debt to be akin to a modern-day apartheid, and has responded with debt cancellation. Unjust debt leaves developing nations at the behest of the powerful. Shall we let the children of Africa and Asia die of curable disease, prevent them from going to school and limit their opportunities for meaningful work – all to pay off unjust and illegitimate loans made to their forefathers?

When I think of the crisis of international debt, I think of my African neighbor, Lesotho. Many of Lesotho’s people cannot afford basic nourishment. The AIDS epidemic has plagued the nation, but needed medicine is out of reach for too many.

Lesotho’s situation shows how debt and extreme poverty create a crisis for children. Children’s wards in that nation’s hospitals are filled with anxious mothers 24 hours a day, administering medicine and caring for their children as a nurse or doctor might do in my country of South Africa. They have no choice. Lesotho has only six pediatricians looking after its 800,000 children.

One-third of Lesotho’s children are not in school. Meanwhile, Lesotho’s debt repayments equal its entire education budget. Instead of investing in its people, health and development, Lesotho – a nation of 2 million people with external debt of $647 million – sends debt payments to the developed world.

Millions of the world’s poorest people suffer hunger and illness as desperately needed resources flow out of their countries in the form of debt payments. Yet many countries, like Lesotho, are not eligible for debt relief because current initiatives are not based on a country’s level of poverty or need.

Much of this debt originates from loans made to corrupt and oppressive regimes that did not benefit the population. As a South African, I know firsthand the injustice of this situation as our country continues to repay money that was used to sustain the apartheid system and suppress the movement for racial justice. The Jubilee Act calls for an audit of the odious debts of countries such as South Africa so that the question of whether this money is truly “owed” can finally be addressed.

The movement to cancel debt is an ongoing moral campaign that joins religious leaders around the globe under the biblical principle of Jubilee, which says that everything belongs to God. My own Anglican communion has long supported debt relief, calling the continued burden of debt upon the poorest people of the world “a moral scandal.”

Christian evangelical organizations, including Baptist World Alliance and the Salvation Army, have called on President Bush to support the Jubilee Act. Pope Benedict XVI, who made his first visit to the United States last month as Congress voted on the Jubilee Act, has called for debt cancellation for the poorest countries to be “continued and accelerated.”

As the Senate now considers the Jubilee Act, it can do its part to help ensure that Africans and Asians are able to use their own resources for their own development. When success comes on expanded debt cancellation, as it did with an end to apartheid, this victory will not be ours alone but will belong to the whole world.

Desmond Tutu is archbishop emeritus of Cape Town, South Africa.

This article appeared in the The Baltimore Sun on May 7, 2008

The Cancel Debt Fast has garnered 85 co-sponsors for the legislation to date, and the number increases daily as people meet with their Congressional Representatives. Please visit the Jubilee USA website for information on the legislation as well as all the supporting information you might need to talk with your Representative.

You can check to see whether your Representative has co-sponsored the legislation by clicking on The New Jubilee Act: H.R.2634 toward the bottom of the page cited above.

If your Representative has not yet co-sponsored the legislation, please call or write to urge him/her to do so. Jubilee USA has made it easy to send an email letter, although a personal letter or call is always most effective. The link to Take Action Now! is on the same website page given above.

Please take action today!

Tuesday, April 24, 2007 — Today at the UK Royal Court of Justice in London, a judge ruled that Zambia must pay $15.4 million plus a yet to be determined share of legal costs to Donegal International, a vulture fund that had sued Zambia for more than $50 million.

While Donegal was not awarded the full amount it sought, debt campaigners were outraged by the outcome as Donegal, led by American investor Michael Sheehan, purchased the debt for just $4 million.

“With this ruling, Donegal stands to make an outrageous profit out of one of the world’s most impoverished nations, winning almost half of the amount Zambia was expected to save from debt relief this year. This money should have gone to build desperately needed schools and clinics in Zambia, not to line the pockets of a wealthy American investor and his cronies,” said Neil Watkins, National Coordinator of Jubilee USA Network.

This year, Zambia expects to save about $40 million from debt relief enacted in 2006 by the IMF, World Bank, and US government.

Jubilee USA Network members and debt campaigners around the world are working to try to stop Donegal from actually getting the money, and even more importantly, to make sure the vultures don’t prey on poor countries any longer. Several Members of Congress have committed to hold hearings on the practices of these vulture funds in May.

“This must never be allowed to happen again. We are calling on President Bush to work with other world leaders at the G-8 summit this coming June in Germany to take definitive action to stop these vultures from preying on poor countries in the future,” said Watkins.