MIM Notes 186 May 15 1999 Jubilee 2000 End the imperialist deathgrip of debt As the year 2000 approaches many people are concerned about global disaster in the form of computer crashes, or religious catastrophes. Unlike many promoting these fears, MIM is not mystical in our analysis of the future. We understand that there is no special significance to the year 2000 except that the number and calendar system we use happens to make this a year with a nice round number. In fact, people have been predicting global religious destruction every year for many years with no outcome yet. The computer fears are somewhat more scientifically based in that people without much foresight set up many systems to rely on two digit years (i.e. 98) and these systems might interpret 00 as 1900 rather than 2000, causing some problems. But humans are perfectly capable of dealing with this problem and since it primarily affects the First World which is by far the most computerized, it really just means an opportunity to spend more money hiring parasitic First World workers to solve the problems created by parasitic First World workers. Even if some computer systems do not work right initially, the world will not come to a grinding halt on January 1, 2000. The problems will be fixed and life will go on. The real tragedy of the year 2000 is that humanity has made it this far and still the majority of the world's people suffer exploitation and oppression at the hands of the minority. The Jubilee 2000 Campaign addresses this situation, taking advantage of the religious significance of the year 2000 and calling for a "debt-free start to the Millennium for a billion people." This movement calls for a cancellation of unpayable debts for the "world's poorest countries" by the end of the year 2000. This includes over 50 countries which carry a debt burden of 93% of their income. "The campaign is inspired by the scriptural idea of the Jubilee Year: periodically, every 7 x 7 years (approx. 50 years), debts are forgiven and slaves set free, and 'liberty is proclaimed throughout the land'." MIM does not need religious significance to call for an end to the death grip of debt payments that keep Third World countries in poverty and under the thumb of the imperialists. But we do recognize this as a good opportunity to mobilize a broad range of people who can see the justice in 'forgiving' Third World debt even if they do not see that without socialism we will not be able to prevent the same problems arising again. In practice this movement means a potentially significant improvement in the quality of life of Third World peoples if even just a small fraction of what used to be used for debt payments is spent in the interests of the people, and it presents a great opportunity to educate people about the international debt as a tool of imperialism. And it is certainly the best spin that MIM has encountered on the year 2000 and all the religious significance people are attaching to it. International finance capital benefits from the people's misery Since the 1980s many Third World countries have taken out huge loans from the U.$., England, Japan, and other imperialist countries as well as the International Monetary Fund (IMF) and World Bank (WB) which are essentially acting as banks run by the imperialists. These loans far exceeded the capacity of the countries to repay. As a result the interest and further loans taken out to pay back original loans have led to spiraling debt. Again, MIM argues that it is the imperialists who have stolen from the rest of the world that owe reparations, not that the majority of the world should owe imperialists for loans taken out in efforts to rebuild from imperialist plunder. About half the debt of Third World countries is owed directly to the imperialist governments of the U.$., Britain, Canada, France, Germany and Italy (the G7). Most of the rest is owed to the IMF and World Bank. About 10% is owed to private banks. The Jubilee 2000 Campaign underscores the extent of the debt crisis by pointing out that "Each person in the Third World owes about L250 to the West - much more than a year's wage for many." They also note that Africa spends four times as much on debt repayment as on healthcare. The debt problems go hand in hand with overall economic inequality between the rich and the poor: "In 1960, the income of the wealthiest 20 per cent of the world's population was 30 times greater than that of the poorest 20 per cent. Today it is over 60 times greater." MIM likes this statistic much more than the ones usually reported by liberals in the u.s. which ignore the majority of the world's people. Liberals use statistics that try and make it look like people in imperialist Amerika are in the same exploited and oppressed grouping as Third World workers. In reality the vast majority of the people within u.s. borders fall within the grouping of the "wealthiest 20 per cent." In response to the debt repayment problem faced by Third World countries, the IMF has initiated Structural Adjustment Programs (SAPs). SAPs require countries to enact strict changes in social and economic structure as a part of a plan to pay off the debt. The imperialist goal of the SAPs is to help countries earn more hard currency by increasing exports and decreasing imports. These SAPs require a reduction in social programs, guarantees that no labor force will be unionized, cuts in wages and privatization of industries and other changes that reduce the quality of life and the actual life expectancy of the people in affected countries. In practice SAPs have had disastrous effects on the people, particularly the poorest people, in the countries where they are applied. Even without SAPs the diverting of resources to debt repayment hurts the people in the debtor countries. As the Jubilee 2000 Africa Campaign explains, "In Zambia, every citizen now owes the country's creditors $790 - more than twice the average annual income. Every year resources are being diverted from health, education and sanitation towards unproductive debt service. The United Nations Development Programme in 1997 stated that 21 million children's lives could be saved if the money used for debt service was put into health and education." They also point out "The UN estimates that if funds were diverted back into health and education from debt repayment, the lives of seven million children could be saved before 2000. That is 134,000 children a week." It is important to explain that loans have never been given to Third World countries out of the goodness of the hearts of the imperialist bankers. Instead, these loans are given for political and economic reasons. Supporting corrupt dictators by giving loans to prop up economic and military development that furthers the dictator's control while at the same time buying his or her allegiance to the foreign capitalists is very common. Other loans are given to promote exports. For instance, "96% of the debts owed to Britain by the poorest countries are owed to the DTI's Export Credit Guarantee Dept., as inducements to buy British exports." MIM can unite with the Jubilee 2000 Africa Campaign in saying that "In the same way now it is in the short-term interest of many Western nations to maintain strong influence over the poorer countries of the world. Justice demands that richer countries give up unfair privileges, held at the expense of the poor." But we go further than the Campaign which argues: "If creditors agree to remission of debts, the removal of a restraint on growth could allow poor countries to compete on fairer terms and reduce their dependence on the rich parts of the world." In fact the oppressed and exploited people of the world will never be able to compete on fair terms with the exploiters as long as the majority of the resources, wealth and military might is in the hands of the exploiters. This is not just a question of poor countries needing to pursue economic development. It is a question of political and economic power. In the publication Global Development Finance 1999, the annual report on global debt published by the World Bank, several useful facts are revealed which lend support to the argument that Third World debt should be forgiven. In 1998, Third World countries paid back $13 for every $1 they received in grants. This is up from $9 in 1996. Total debt in these countries rose in 1998 by $150 billion to a total of close to $2.5 trillion. Paying back more than they borrow does not actually help a country dig itself out of debt. In Latin America, the region as a whole paid back $20 billion more than in borrowed in 1998, yet debt in the region rose by 5% to $736 billion. Similarly, African countries paid back $3.5 billion more than they borrowed in 1998 while debt rose by 3% to $226 billion. Sub- Saharan Africa 'owes' $130 billion in debt, 83% of its total GNP. In reality much of the debt currently carried by Third World countries will never be paid off under the current system. Of course if we count the resources and labor taken from these countries towards the repayment of debt the First World actually owes these countries a huge debt. How to end the debt crisis The Jubilee 2000 Campaign is correct when they say "We think [the creditors] are keeping debts on the books, to keep poor countries on the leash. . . They are using the debt to pry open markets, and pick up assets cheaply." But we do not agree with the Jubilee 2000 answer: "We want relations between debtors and creditors to be governed by the law, not by greed. We want a new independent open and fair process for regulating international debtors and creditors." They argue that it is possible to prevent these debt problems from arising again with a few safeguards in place. These include eliminating secrecy in lending, creditors taking responsibility for only making loans to countries that can reasonably repay, ensuring that debt relief is diverted to the poor (advocating programs of groups like UNICEF), and some kind of controls on lending to limit speculators who invest short-term for profit. One of the basic principles of capitalism is greed and the fight to make ever more money at whatever expense. Much of the exploitation in the world is not done in secret, yet it is possible because the exploiters have the money and power and guns to defend themselves. MIM promotes the Maoist principles of foreign economic aid. The Chinese government under Mao had eight principles of foreign economic aid (from the Fundamentals of Political Economy): 1. Provide foreign aid according to the principle of equality and mutual benefit. Do not regard aid as a one-way gift. Regard aid as mutual assistance. 2. In providing foreign aid, strictly respect the sovereignty of the recipient country. Attach no strings and ask for no privileges. 3. Provide economic aid without interest or at low interests. When necessary, lengthen the period of loan repayment to lessen the burden on the recipient country. 4. The purpose of aid is not to create the recipient country's dependence on China but to help it to advance on the road of self- reliance and independent economic development. 5. Projects chosen for aid in the recipient country should require low investment and short gestation so that the aid recipient country can increase its income and accumulation. 6. Provide the best possible equipment and raw materials we produce and negotiate prices according to the international market conditions. If the equipment and raw materials provided do not meet the agreed specifications and quality, their return is guaranteed. 7. In providing any form of technical aid, guarantee that the personnel of the recipient country will fully master this technical know-how. 8. Experts sent to the recipient country to help with construction should receive the same material treatment as the experts of the recipient country. No special requirements or treatment are allowed. Only with a socialist system in place where a dictatorship of the proletariat can enact policies in the interests of the proletariat will it be possible to put these policies into place. Until that time the imperialists will continue their attempts to plunder the resources and labor of the majority of the world's people. But sometimes we can force concessions from the imperialists along the road to socialism. MIM supports the struggle to force the imperialists to relieve the debt burden of the Third World. On May 16, 1998, the Jubilee 2000 Campaign mobilized 70,000 people to form a human chain around the G8 Summit in Birmingham, England, forcing the British Prime Minister Tony Blair to meet with the Jubilee 2000 organizers. The next action dates are June 12-19 when Jubilee 2000 is calling for a Global Week of Action. In conjunction with this call MIM and RAIL are organizing educational events and rallies to call for the cancellation of all debt owed to the imperialist countries by Third World countries. Notes: Jubilee 2000 Africa Campaign and remarks from Professor Dennis Brutus, honorary co-president of the Jubilee 2000 Africa Campaign. Facts presented above can be found at the Jubilee 2000 Africa Campaigns web page: www.jubilee2000uk.org.