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| Debt Forgiveness: Isn't It
About Time? Faisal Kutty Wednesday, June 2, 1999 www.iviews.com an internet news publication from a U.S. Muslim Perspective A friend of mine recently returned from a
well-deserved vacation to Mexico. Even though he spent 10 days in the lap
of luxury, his most lasting impression of Mexico was the extreme disparity
between rich and poor. It was clear he was impacted greatly by the poverty
as he recounted the story of how neglected, dirty and malnourished six and
seven-year-old children scrambled to polish his shoes to make enough to
eat. The story struck a cord with me and brought
back my own memories of visits to India. The poverty I saw there was at
times unbearable. Everywhere I went people lectured me about how bad we
Westerners are. Interestingly, the origins of these negative sentiments
were not military or political in nature. Rather,
these people's negative impressions of Westerners stemmed from the fact
that so many of their best crops and other food items were exported to the
West. Whether it was an educated professional or someone who had never
even set foot in a classroom, the sentiment was unanimous: "We work,
while you in the West enjoy the best fruits of our labor and we get
whatever is left over." Simple, yet profound. I assume many who have ventured beyond the
comfortable confines of North America and Europe have witnessed poverty
and this kind of resentment to some extent. The
situation is not getting any better as the gap between rich and poor
widens, and governments in the developing world struggle to keep
education, health and nutrition programs afloat while juggling crushing
international debt. The negative impact of the
$2 trillion dollars of debt owed by the developing world is greatest on
the most vulnerable children, women and the homeless. Those who
actually benefit the economic and political elite escape virtually
unscathed. In fact, according to the 1997 United Nations Human Development
Report, the governments of Africa alone, relieved of their debt
repayments, could "save the lives of about 21-million children by the
year 2000." Millions more suffer
as their countries divert badly needed funds from basic health, social and
education programs to service the repayment of their towering debts.
According to Jubilee 2000, an international debt forgiveness movement,
Brazil's debt grew from $3 billion in 1964 to $72 billion in 1980 to $115
billion in 1989 to more than $212 billion now. This exponential growth
came about despite the country's payment of more than $216 billion over
the past 10 years in debt service alone. Brazil, like many others, now
spends more on servicing its loans than on providing basic necessities. It's not much different elsewhere. Developing
countries often pay out three times more in debt repayment then they
receive in foreign aid annually. Deplorably, African nations, which
have an abundance of mineral and other natural resource potential, are
even caught in a vicious cycle of debt and dependence. As explored in
great detail in the book 'Africa in Chaos' by George Ayittey, the crisis
has reached the point that "eating has become a luxury for many
Africans, and hunger stares them squarely in the face." Moreover,
some countries that one would not expect to be in such a situation are
suffering from the wrath of debt financing. Last month the world witnessed
Jordan's King Abdallah touring Western capitals literally begging for help
with his country's debt. And financing charges eat up a third of Jordan's
budget. Is anything being done about this? Responding to the growing calls to provide
some relief, some major creditor nations along with the multilateral
development banks, launched the Heavily Indebted Poor Country (HIPC)
initiative at the September 1996 Annual Meeting of the World Bank and
International Monetary Fund (IMF). For the first time, creditor nations
recognized that debt was a serious problem and agreed to work toward the
cancellation of some debt, as opposed to merely refinancing it. So what's wrong with the HIPC? For
starters, it doesn't take an economics expert to conclude that the HIPC
places too much burden on the developing world. Its stringent conditions,
including the linking of eligibility for debt reduction to adherence to
IMF economic reforms, make the program quite restrictive. The initiative's
definition of "sustainable level" of debt is also quite onerous.
For instance, the program deems it sustainable if a country's debt service
payments are less than 25 percent of its export earnings and its total
debts are no greater than 250 percent of its annual exports. Under such rules very few countries qualify
for relief. Such structuring does however help creditor nations and
international lending institutions weasel out from a very uncomfortable
predicament. In essence, it's little more than a "we care about the
poor, but lets move on now" program. What can be done?
First and foremost, this issue must be publicized for what it is:
exploitation, pure and simple, of the poor by the rich; be it richer
nations or the richer citizens of a particular country. What better time
then to join with the various Christian groups that have launched the
Jubilee 2000 movement to urge the leaders of the G8 to forgive $260
billion in debt owed by fifty of the poorest countries and bring
"balance and justice back to the world." The movement draws its
inspiration from biblical traditions in the book of Leviticus, which
celebrates God's promise of a new beginning. In the Jubilee year, which
comes around every 50 years, social inequalities are to be rectified. Part
of this involves the forgiveness of debts. The Jubilee 2000 campaign has gained
momentum over the last few months and organizers plan to present to the G8
at its meeting this month in Cologne, Germany, a petition with 24 million
signatures.The campaign's pressure has already begun to pay off. A number
of creditor nations are floating proposals to address the concerns of
campaigners. According to the Canadian Ecumenical Jubilee Initiative,
Canada has set a great example by agreeing to cancel commercial and aid
debts of the poorest nations even if the G8 countries don't. Hopefully,
this precedent will encourage others to follow through or perhaps even go
further. But debt relief should not only be a
Christian concern. This is a global problem that warrants a global
collective effort. Jubilee 2000 has taken the initiative to reach out to
other faith communities. In fact, it has successfully solicited supportive
statements on the issue from Dr. Muzammil Siddiqui, president of the
Islamic Society of North America, and Sahib Mustaqim Bleher, General
Secretary of the Islamic Party of Britain. Unfortunately, the campaign has
not picked up steam within the greater Muslim community or other religious
communities for that matter. This might partly be attributed to Muslims
and those of other religious and political persuasions having a problem
with the biblical origin of Jubilee 2000 and the positions of some
coalition members. But this should not stop Muslims from getting involved
in what is a commendable effort. The movement is flexible enough to allow
for differences in philosophy and approach. The spirit of this
initiative is not inconsistent with any moral worldview or religious
outlook. It certainly is not against the Islamic position. In fact, the
world's 1.2 billion Muslims, and no doubt, those of other religious
persuasions, can only add to the cause. From the Muslim perspective, the
movement provides a great opportunity to promote the Qur'anic teaching
that "wealth should not only circulate between the rich among
you" (59:7). Moreover, the forgiveness aspect is also clearly
consistent with Islamic teaching. And what is more, the Muslim adherence
to interest-free financial transactioning can add something totally unique
and so far unaddressed to the discussion. As bad as debt might be, Muslims
recognize the necessity to borrow. What Muslims do not accept is the
accumulation of interest on debt. And the current debt crisis is being
driven by the fact that countries cannot catch up with the compounding
interest on loans. So in the discussion of remedies for a world beset with
debt, the Muslim concept of interest free lending could be a viable avenue
of exploration. The lines of communication must be thrown
wide open on such issues of common concern. The movement must be more
forthcoming and active in reaching out to Muslims as well as others for
support with this endeavor. And the Muslim community should respond to
these ovations. Everyone who shares this planet has a moral obligation to make it a better place to live. And with a strong united campaign for debt relief there is a better chance that the less fortunate can begin to live again.
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