Putting Life Before Debt (CI - CIDSE, 1998, 38 p.): CONCLUSION

Putting Life Before Debt (CI - CIDSE, 1998, 38 p.)

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EXECUTIVE SUMMARY

INTRODUCTION

PART I: Debt and Jubilee

What is International Debt?

A Catholic Framework on Debt

Why Now?

How did the debt crisis come about?

Impact in the South

PART II: Reducing Debt

Early Attempts to Reduce Debt

Heavily Indebted Poor Country (HIPC) Initiative

Shortcomings of the HIPC Initiative

PART III: CIDSE/Caritas Internationalis Position on International Debt

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1. Cancel the unpayable debt by the year 2000

2. Improve the HIPC Initiative

3. Link debt cancellation with investment in human development

4. Ensure decisions on debt relief are made in a transparent way

5. Change the Structure of International Financial Relations

CONCLUSION

APPENDICES

Appendix 1: CIDSE and Caritas Internationalis contacts

Appendix 2: Catholic Church Statements on Debt, 1987-1997 (by year)

Appendix 3: International and National Organizations on Debt

Appendix 4: Advocacy: Steps to Build a Campaign on Debt

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1. Learn more about the debt issue

2. Establish clear aims and specific objectives

3. Build awareness at the grassroots level and among coalitions

4. Lobby decision makers

GLOSSARY

NOTES

BACK COVER

CONCLUSION

The members of CIDSE and Caritas Internationalis collaborate with thousands of partners throughout the developing world. Our call for the cancellation of the unpayable debt of the most impoverished countries by the year 2000 is rooted in our partnership with those who suffer the consequences of the debt burden.

In many countries, large external debt obligations prevent governments from investing sufficiently in those basic human needs that are the foundation for sustainable development and human security. CIDSE and Caritas Internationalis intend to mobilize official and public opinion in favor of putting development before debt.

The policy recommendations made in this booklet provide a framework for a just and lasting solution to the debt problem. CIDSE and Caritas Internationalis member organizations have committed themselves to advocate these joint policy options in various national and international fora through the use of the material contained herein.

We express our thanks to all, individuals and groups, who will use this document as a tool for “putting life before debt”. We would appreciate receiving a feed-back on initiatives taken through the use of this statement.

1. All members of the CIDSE/CI task group on debt contributed to this document. Barbara Kohnen, Christiane Overkamp, and Duncan MacLaren took primary responsibility for writing. Special thanks go to Fr.J. Bryan Hehir, CRS Counselor, for drafting a portion of A Catholic Framework on Debt, to Catholic Relief Services for layout and initial printing, and to the many readers around the globe who offered suggestions for improvement.
2. Bilateral aid is assistance given by one government to another. It is increasingly used to repay debt owed to the World Bank and International Monetary Fund.
3. Major creditors include governments and international financial institutions. Commercial banks are a less relevant creditor for heavily indebted poor countries.
4. Poor Country Debt Relief: false dawn or new hope for poverty reduction?” April 1997, Oxfam International Position Paper. The study compares the external financing requirements needed to meet targets in health and education set by the 1990 World Summit for Children with debt service payments for 7 countries: Benin, Ethiopia, Mozambique, Burkina Faso, Mali, Zambia, and Niger. In all but one country, the cost of debt servicing represents more than the financial resources needed to achieve significant human development.
5. From Peter Henriot, SJ, Zambia: debt and structural adjustment, The Month, August 1997.
6. Commercial banks are major creditors for only a few HIPCs (notably, Cote d'Ivoire.)
7. Tony Killick, Principles, Agents, and the Failings of Conditionality, Overseas Development Institute, London, 1997.
8. In this context, the term bankruptcy is most commonly used in the US, while insolvency is used in Europe.