Latin America: New moves on foreign debt relief

by Diego Cevallos

Mexico City, Aug 4 (IPS) -- The international pressure group Jubilee 2000 is planning a plebescite throughout Latin America next year in an attempt to force wealthy nations and multilateral financial institutions to cancel more of the region's foreign debt.

In June, the seven wealthiest western countries, who with Russia form the Group of Eight (G-8), cancelled some $367 million owed by Latin America. It was a "positive measure but clearly insufficient; besides, it strengthens the creditors," says Liana Cisneros, Jubileo 2000's regional coordinator.

The organisation and other political and social groups gathered more than 20 million signatures in support of its campaign before the G-8 decided to cancel some of the debts owed by Bolivia, Guyana, Honduras and Nicaragua.

Other countries in Latin America and the Caribbean - such as Ecuador, Haiti, Jamaica and Peru - also are burdened with foreign debt, which forms a significant part of the national budget of these nations.

Jubilee 2000 wants the wealthy countries and multilateral organizations to cancel at least $700 million of Latin America's debt before the end of this year. Furthermore, it is attempting to restructure the conditions and terms of payment of much of the debt incurred in the region.

To help achieve its objective, Jubilee 2000 is joining various social groups in preparing to gather together Latin American voters between April 22-May 1 next year in a "Latin American Outcry of the Excluded."

It also will establish a Continental Tribunal in Mexico on Oct 12 of this year, where diverse social groups will "judge" creditors. Currently, 41 countries are benefitting from debt-reduction programs and "we will continue pressuring for this to be extended to at least 52," Cisneros says.

Latin America's foreign debt - which jumped to $60 billion in the mid-60s, grew to $204 billion in 1980, and then to $443 billion in 1990 - stands at $706 billion this year according to Jubileo 2000 studies.

According to World Bank data, the region paid $739 billion just to service its debt between 1982 and 1996.

"We will redouble our efforts from now until the end-of-the-millennium festivities to have greater amounts of the debt cancelled," says Cisneros.

The debt-cancellation program agreed on by the G-8, which includes conditions related to belt-tightening and fiscal-discipline policies, will be implemented according to standards to be defined at a meeting in Washington next month of the World Bank and the International Monetary Fund.

The objective of Jubilee 2000 - a group that receives support from various churches, social groups, unions and personalities in 53 countries - is to end the century in the light of Christian precepts that state the year of jubilee comes every 50 years and is the time to forgive debts and free slaves.

In its June meeting, the G-8 recognized that "recent experiences suggest that additional efforts are needed to achieve more durable solutions to the problems caused by these unsustainable debts."

According to UN Secretary-General Kofi Annan, it is necessary to eliminate "the catastrophic burden imposed by foreign debt on the children and families of the planet's poorest nations."

The United Nations Development Program (UNDP) reports that, if the combined debt of the 20 poorest countries of the world were cancelled and the money invested in health care, it would save the lives of seven million children each year.

The above article by the Inter Press Service appeared in the South- North Development Monitor (SUNS) .