Excerpt from the Soroptimist Magazine September/October/November 2002 –
A MATTER OF LIFE AND DEBT

As third world countries struggle to pay back international debt, poor women and children suffer. by Marielena Zuniga
Josephine from Kenya was 4 years old when she became ill. At a health clinic, Josephine’s mother was told she would need to buy a penicillin ointment for her daughter’s eyes. But Kenya had already drastically cut support of health care because of its debt burden to wealthier nations. Already poor, Josephine’s mother had to make a life-changing decision in a split second. Did her daughter receive medical care or did her family eat? Today, Josephine Sinyo, a member of Kenyan Parliament, is blind.

The explanation is morally disturbing. Impoverished countries are spending more-in some cases three to five times more-in repayment of their debt to wealthier nations instead of investing in their own economic development, health, education, infrastructure or industry.

“Women must figure out how to manage the family’s budget, how they can feed their family, how they can provide for health care, as in the case of Josephine Sinyo, who is now blind,” Njehu says. “Can you imagine being a mother and having to make that decision? These are the life-and-death decisions women are having to make every day due to debt servicing.”
History of the Debt Crisis
The crisis began in the 1970s when many oil-exporting countries had large amounts of extra money that they deposited into Western banks to earn interest. Flush with funds, these banks then loaned this money at very low interest rates to Third World countries for major development projects.

The banks and governments of Europe, Japan and the United States did not look very closely at how the money was being used and assumed the loans would be repaid. But military governments, particularly eager to borrow, failed to use the money for socially responsible programs. Widespread corruption did nothing to slow lending, however.

In the 1980s, a recession hit the industrialized world and interest rates soared, including rates on loans to the Third World. At the same time, Third World countries were earning less money from their exports and the retail price of goods and materials went down. Many countries found it difficult to pay even the interest on their debts, never mind the original principal. Poorer nations had to continue borrowing money just to repay the interest. The debt grew.

Today, the Third World as a whole wobbles under the weight of a $2.3 trillion debt owed to the world’s wealthiest nations, including the U.S., Britain, Japan, France and Germany. Other important creditors include the large international financial institutions like the International Monetary Fund (IMF) and the World Bank (WB), which are controlled primarily by the world’s wealthiest nations. Regional development banks and commercial banks also have outstanding loans to poor nations.

While these poor countries have paid the principal many times over, the debt remains because of increases in original interest rates and rescheduling arrangements. In the 42 countries defined by the WB as Heavily Indebted Poor Countries (HIPC), 700 million people live on an average of $4 a day. Many survive on less than $1 a day. Yet these countries are expected to repay more than $220 billion in loans.

Sapping the Poor
The most disturbing manifestation of the debt crisis, contend anti-debt advocates, is the implementation of Structural Adjustment Programs (SAPS). These are economic policies imposed on debtor countries by the WB and IMF as conditions for debt relief and new loans.

Originally intended to stimulate economic growth and control inflation, SAPS have only increased poverty because they require severe cutbacks in public spending. Conditions imposed by SAPS include:

· the payment of “user fees” on government-provided services like schools, health clinics and clean drinking water

· the selling of government-owned enterprises to private owners, often leading to job losses

· the promotion of exports, in which the land of poor people is taken over so crops can be grown for foreign markets.

In Bolivia, for example, fees for water have risen drastically, sometimes by 30 percent, says Marie Clarke, national coordinator of the Washington, DC-based Jubilee USA Network, a coalition dedicated to debt cancellation.

With increased unemployment comes increased domestic violence, a breakdown in the family unit, and women forced into prostitution in order to survive, hastening the spread of AIDS.

The Debt Trap Deepens
Especially of concern to partners of the Jubilee USA Network is the rising infant mortality rate and women dying in childbirth due to repercussions of Third World debt. “Women are having problem pregnancies and are not getting the pre-natal care they need because they are not able to pay the fees,” says Clarke.

SAPS also means families pay user fees for education, and often invest in their sons instead of their daughters. As a result, female children lose future opportunities for advancement, with the domestic workload often falling heavily on them.

Debt Relief Begins
In 1996, in response to public pressure from Jubilee and other organizations, the WB and IMF launched the Heavily Indebted Poor Countries (HIPC) initiative to address the debt crisis. The program was designed to help the neediest countries-those whose debt levels are unsustainable, meaning so high that paying their debt obligations makes it impossible for them to invest adequately in social programs.

While the initiative has delivered some relief in the form of education and health care, it has failed to meet its promised goal of finding an exit to the debt problem for poor nations, say debt-cancellation advocates.

Surviving Debt
“In my home village in Kenya, the people are working hard to build a clinic … they are pooling their meager resources,” says Njehu of 50 Years Is Enough. “What they are looking for from the G8 (the world’s eight most powerful industrialized nations) and other world nations is the support they need to succeed and the political success to pursue their dreams.”

Women, in particular, are making a difference. In Africa, one of the areas hardest hit by debt servicing, they are calling for an end to SAPS and for the development of economic policies that reflect their needs and priorities.
A recent article in The New York Times touched Njehu, who believes it should prompt everyone to ask some disturbing questions. In a remote village in Kenya, the Maasai people had heard of the September 11th disaster. Already poor, they donated 14 cows-their wealth-to help those suffering in America.

“What does this say about the Maasai people,” she questions, “… and what does that say about this country and other wealthy nations that they are willing to allow kids to continue to die and let mothers bury their children too young because they couldn’t afford 30 cents of malaria medication? What does this say?”

Dropping the Debt
What can be done to lift the burden of debt and Structural Adjustment Programs (SAPS) from the backs of the poor? Quite simply, cancel the debt, say advocates. Developing countries would not have to repay loans and would not have to pay the interest.
And don’t use the term “debt forgiveness,” say anti-debt groups. This implies a wrong has been committed and poor nations have already repaid their loans many times over in interest. In many cases, developing countries have paid the First World more than Western countries have given in aid, loans and investments.

Second, SAPS must be scrapped, contend anti-debt campaigners, along with user fees for health care and other basic life services. Others advocate a more gradual approach. They believe these programs don’t have to be eliminated, but that prior to their implementation, independent groups should make social assessments, making SAPS more sensitive to the special needs of the poor.

But no reforms will occur if leaders of the World Bank (WB) and International Monetary Fund (IMF) are not convinced of their necessity, say many organizations. And the WB and IMF are not faceless institutions, says Marie Clarke, national coordinator of the Jubilee USA Network in Washington, DC. They are influenced and run by member countries.

In every country, organizations have been networking and campaigning for debt cancellation, says Njoki Njoroge Njehu of the DC-based 50 Years Is Enough Network. In 1999 at the G8 Summit in Cologne, Germany, 21 million people from around the world signed a petition for debt cancellation, she says. It was the largest number of names ever signed on a petition according to the Guinness Book of World Records.

 
Clarke believes that if the wealthiest countries have the political will to cancel the debt, it will happen. She states, “It’s time for people of faith to call on the Biblical Jubilee principle* for people of conscience to stand up and say enough is enough, this needs to change.”

*According to the New Testament book of Leviticus, during the Jubilee those enslaved because of debts are freed, lands lost because of debt are returned, and community torn by inequality is restored.

Taking Action
· Supporting women in debt-heavy areas with the Women¹s Opportunity Awards program helps encourage and promote economic development. Clubs can also apply for and implement Making a Difference for Women grants that encourage microenterprises in developing countries.

· Support Project Five-O, which was adopted by Soroptimist International in 1980 and focuses on providing vocational training and employment for women in developing countries and countries in transition, with the goal of alleviating poverty and advancing the status of women.

· Urge local and national governments to authorize and appropriate critically needed funding for debt relief for impoverished countries by holding letter-writing campaigns. In the U.S., contact senators and representatives to approve $810 million over the next three years to fulfill U.S. debt-relief commitments made at the G8 Economic Summit in Cologne, Germany. For a general form letter urging government officials to help solve the debt relief crisis, go to the Lutheran Office on Government Affairs <www.loga.org>.

· Link up with members of Jubilee 2000, an international organization devoted to providing debt relief for the world¹s poorest nations, <www.jubilee2000.org>.

· Raise awareness about debt relief in local communities. Encourage citizens to endorse the urgent need for debt cancellation. Several organizations campaigning for debt relief have background information on the debt crisis and resources-including the World Development Movement <www.wdm.org.uk>, and OxFam <www.oxfamamerica.org>-which help make the issue of debt relief accessible to others.

You can read the full article by visiting:
http://www.soroptimist.org. Click on Magazine, Magazine Feature Article, Sept/Oct/Nov2002

 
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