Jubilee Platform Explanation and Commentary
Recognizing that much of the debt charged to many countries is unjust and unpayable, and profoundly aware of the great social and environmental toll that these debts exact, the Jubilee USA Network calls for a Jubilee cancellation of debt that includes:
1. definitive debt cancellation of the international debt owed by countries burdened with high levels of human need and environmental distress which are unable to meet the basic needs of their people or achieve a level of sustainable development that ensures a decent quality of life.
In situations where the burden of debt repayment prevents a country from meeting the basic needs of its people or protecting the environment, the Jubilee USA Network believes that debt should be canceled regardless of whether or not the country is labeled a "heavily indebted poor country" by the World Bank and International Monetary Fund.2. definitive debt cancellation, in addition, of debts found to be illegitimate and odious, wherever they exist, through a just and equitable process not controlled by the creditors;
Furthermore, since the primary obligation of a government is to ensure a sustainable life of dignity for all its people, creditor inaction may oblige indebted countries to repudiate overwhelming debt. If this occurs, the Jubilee USA Network calls on the U.S. government and international financial institutions to recognize the justice of this action and refrain from retaliation.
Jubilee USA Network expands the call for debt cancellation to cover odious and illegitimate debts wherever they exist. This includes countries whose level of need might not be as high as countries for which blanket cancellation is appropriate. Debts deemed odious and illegitimate must be declared null and void as a matter of law and justice.3. Definitive debt cancellation that benefits countries’ impoverished majorities, is accountable to them and advances their authentic participation in determining the direction of their economies and societies;
Odious debt is a legal term that refers to money secured by an oppressive regime and used for purposes other than the "needs and interest" of the country. Moreover, in cases in which borrowed money was used in ways contrary to the people’s interest, with knowledge of the creditors, the creditors may be said to have committed a hostile act against the people. Odious debts are appropriately annulled, not simply canceled, since they never existed as authentically incurred debts.
Illegitimate debt expands the definition of odious debt to include debt incurred by a legitimate power that was subsequently misused. Examples include:The argument that such debts are illegitimate is strengthened by the creditors’ knowledge of and complicity in such misuse.
debts resulting from loans diverted as stolen wealth (see Platform Plank #5); debts resulting from loans used to serve the interests of an elite minority and not society generally; debt that resulted from irresponsible projects that failed to serve a greater purpose, or caused harm to people or the environment; debt incurred by undemocratic means, without any transparency or participation by the larger society or representative branches of government; debt incurred under predatory repayment terms, including situations where original interest rates skyrocketed and compound interest made repayment impossible.
Furthermore, still additional Southern debt may be illegitimate because historical, political and economic forces have resulted in profound systemic injustices in the global economy. For example:Jubilee partners in the global South note that a greater debt is owed to the South by Northern nations as a result of slavery, the colonial and neo-colonial extraction of mineral wealth and other resources, and environmental damage resulting from Northern policies and lifestyles. In view of this, Jubilee USA asks, "who truly are the debtors and who the creditors?"
Southern debt is largely the legacy of unjust and destructive colonial and neo-colonial domination by the North; Southern debt exists at excessively high levels because of unjust and inappropriate economic policy changes externally imposed on impoverished countries that have increased poverty and dependence; Excessive Southern debt also exists because of exploitative trade rules imposed by powerful Northern governments.
Jubilee USA Network calls for a fair, transparent, non-partisan and just process to address these issues. In contrast to current debt reduction processes, this must be independent of the creditors. Creditors are self-interested parties and share culpability for the problem. Furthermore, the existing global financial architecture already favors creditor nations and institutions. A just process must be free of this power imbalance.
Jubilee USA Network calls for debt cancellation to serve the goal of poverty eradication. This raises the issue of the role of external actors in "positive conditionality."4. definitive debt cancellation that is not externally conditioned on economic policy prescriptions, such as IMF-designed and imposed Structural Adjustment Programs (SAPs);
Some Southern anti-debt activists have supported a very limited form of external conditionality imposed on budgetary spending: external accountability to ensure that their governments channel the savings from debt cancellation into vital social services and poverty alleviation. These Southern partners hold this view, as a practical matter, because they believe their governments will not use the money for poverty reduction unless they are forced to do so by external institutions or governments.
Other Southern campaigners oppose any external conditions. They look to domestic civil society to hold governments accountable for resources freed by cancellation. In their view, Northern governments have no legitimate authority to impose conditions. Since Northern governments bear a large measure of culpability for the debt, it is morally inappropriate for them to impose conditions. Furthermore, any such conditions would serve to reinforce unequal power relationships between the North and South. Arguments that conditions combat corruption in Southern governments serve to transfer the blame to Southern governments while excusing, and refusing to change, the fundamental problems that create debt.http://www.jubileeusa.org/jubilee.cgi
The Jubilee USA platform takes no specific position in this debate over the mechanism of "positive conditionality," though we insist that savings from debt cancellation directly benefit countries’ impoverished population. Jubilee USA members, like our Southern partners, have expressed different views on how this is best accomplished.
Popular accountability and participation is the sure way for debt cancellation to benefit a country’s impoverished majority, and is necessary in the long run for economic justice. However, this raises the issue for some of whether debt cancellation should be postponed until authentic mechanisms of democratic accountability are permitted and developed. While calling for the empowerment of civil society, Jubilee USA does not support such delays.
From debt "restructuring" in the early 1980's through the current Enhanced Heavily Indebted Poor Countries Initiative, debt relief has been conditioned on "free market/free trade" economic policy changes most often implemented through "Structural Adjustment Programs" (SAPs). SAPs link Southern countries into the global economy in ways that have primarily benefited Northern economies and transnational companies. Nobel Peace Prize recipient Bishop Desmond Tutu of South Africa has called SAPS "immoral" because of the harm they do to poor communities. For example, SAPS often include fees for primary health care and education and the privatization of basic essential resources like clean and safe water, turning basic human needs into commodities for profit.5. acknowledgment of the responsibility of both lenders and borrowers and action to recover resources that were diverted by corrupt and undemocratic regimes, institutions and individuals;
Through SAP conditionality, the United States and other wealthy countries have used international debt as an instrument to control Southern economies. Jubilee USA believes that the refusal of wealthy countries to fully implement debt cancellation for impoverished countries is rooted in the desire to maintain this control.
Jubilee USA opposes externally imposed economic policy conditions on debt relief, whether labeled as SAPS or something else. In view of universal standards of justice and human dignity and the internationally guaranteed right of self-determination, peoples and nations must be free to democratically develop their own economic policies, structures and relationships.
Jubilee USA Network challenges the common notion that debtors are solely responsible for their burdensome debts, and draws attention to irresponsible and "bad faith" lending and banking by the creditors. Northern countries are especially culpable for:6. the emergence of global economic policies and trade rules that eradicate poverty promote sustainable human development and prevent recurring, destructive cycles of indebtednessJubilee USA Network also calls attention to the issue of stolen wealth, which refers to loans secured by a government or ruler and diverted for personal use. Jubilee continues to participate in the search for appropriate avenues by which to recover such resources.
the practice of urging loans on developing nations, especially in the 1970s, simply because creditors had capital to lend; knowingly lending to corrupt governments to gain political and military allies; lending with conditions that ensure that the profit returns to the creditor nation or institution; approving loans for inherently flawed projects without adequate attention to design or location.
The Jubilee USA Network vigorously maintains that repeated cycles of destructive indebtedness are symptomatic of deeper injustices in the global economy. A lasting solution to the debt crisis requires major systemic changes to the shape of global economic relationships. International treaties, strategies for sustainable development and trade rules must promote social justice among and within nations. International agreements that permanently give preference to wealthier, more powerful sectors or countries must be eliminated or replaced.