Global Economic Policy and the Restoration of Right Relationships

A Statement of the Religious Working Group on the World Bank and IMF

(Endorsements may be sent to the RWG at P.O. Box 29132, Washington DC 20017, ogc@maryknoll.org)

Much has been said in the past few years about the need for a Jubilee.Overwhelming evidence has pointed to grave deficiencies of the global economy in protecting the dignity of millions of people and providing for their most basic needs.One significant expression of this concern has been the global effort to address the crushing debt burden exacerbating this reality.

But the moral trajectory of the Jubilee imperative goes way beyond the cancellation of debt to emphasize the restoration of right relationships among people (individuals, communities, nations), between human beings and the rest of creation, and between human beings and God.Our inability or unwillingness to eradicate poverty or reach basic accord on how to protect the integrity of creation -- and the ominous specter of pandemic disease, especially among the most impoverished communities -- compel us as people of faith to probe more deeply the meaning of right relationship in our own times.While we have taken a significant first step toward debt cancellation, the pursuit of right relationships requires that much more be done.

The continuing existence of the crushing debt burden on poor countries, the imposition of structural adjustment programs and inappropriate roles played by the international financial institutions:

·result in a distorted and broken relationship between the powerful, affluent nations and the developing countries of the global South. This relationship is characterized by domination rather than equal respect and mutuality.Creditor nations and institutions continue to dictate the nature and terms of debt relief.Theyrequire poor nations to make far-reaching economic policy changes without the democratic consent of their people.Indeed, officials* in creditor countries have openly expressed that they want some debt burden to remain because it provides leverage for maximizing control over the economic policies of countries in the global South;

·perpetuate a distorted relationship with creation – the natural environment.In order to earn the foreign-exchange needed to make debt service payments, impoverished countries are forced to pillage their own natural resources for export to the affluent nations.Structural adjustment programs harm the environment by placing an undue emphasis on exports, inducing unemployment and forcing desperate people to try to farm increasingly marginal land;

·constitute a moral failing of the wealthy countries and lending institutions, distorting their relationship with the Creator and Sovereign of nations.The policy makers and citizens in affluent countries are themselves deeply injured when they require people living in misery to use for debt repayment the scarce financial resources that impoverished people need for their own survival.Their actions have the effect of denying education to children, health care to entire families, and limit the resources available to counter the spread of HIV/AIDS in impoverished countries. The attempt to restructure the economies of other countries without the approval of their people is an act of hubris that separates us from the God of love and devastates our neighbors in need.

In view of these broken relationships, it is not surprising that the debt burden and the imposition of structural adjustment programs have increased poverty, inequality and environmental degradation in much of the global South.

As religious leaders and people of faith, we are convinced that the restoration of right relationships with others, creation and the Creator requires ending the relationship of domination.This in turn calls for a definitive cancellation of these crushing debts, the termination of externally-mandated economic policy prescriptions, and a transformation of the roles of the international financial institutions.We urge the adoption ofthe following specific steps:

Cancel the Debt

·Affluent creditor nations and international financial institutions must immediately cease accepting debt payments from the poorest countries

·The international financial institutions, as well as bilateral creditors, must cancel one hundred percent of the international debts of the poorest countries.

·Beyond this, creditors should cancel all debts of any developing country which resulted from illegitimate, unjust loans.Such loans, for example, are those made during the Cold War period which served the self-interests of the lenders while failing to benefit ordinary people in the borrowing countries.

End Structural Adjustment Programs

·Structural Adjustment Programs as currently constituted must end and macro-economic policy conditions must cease to be attached to debt cancellation

·Any economic policy reforms must be chosen through the democratic participation of the citizens of the reforming countries, with special attention to the voices of the poor.

Transform the International Financial Institutions

·The IFIs must cease mandating, recommending or contracting with debtor countries for economic reform programs that are not developed, adopted and monitored through fully participatory, transparent and democratic processes, involving all levels of civil society within the implementing country.

·The IMF's gatekeeper role -- in which compliance with IMF programs signals a country's presumed creditworthiness -- must end.

·Power within the international financial institutions must be redistributed toward developing country governments.

As people of faith with roots and partners in some of the world’s most impoverished communities, we are aware that these would be but first steps to eradicate poverty and safeguard the environment. A process of globalization is well underway about which we are profoundly skeptical. Without significant transformation of the assumptions, goals and rules shaping the global economy, few, if any benefits of this process will accrue to the most impoverished countries and communities.

Time after time we have witnessed the disastrous impact on marginal communities of decisions made in distant or disconnected places.We see this happening once again as people in increasingly centralized positions of power negotiate global rules for trade and investment that place profit and growth before human and environmental well-being.

By our faith we are committed to protecting the dignity of each human life and enhancing the integrity of creation.In our reflections on jubilee we have renewed our determination to help make right the unjust relationships between human beings, societies and the rest of creation. We will evaluate all policy proposals and decisions in this light.

February 2001