NORTH COAST TIMES EAGLE, WINTER 2000
Import liberalization assures that loaned money will
return quickly to the G7 conglomerate via trade. This effectively
turns these loans into grease for the wheels of large exporting
economies. Markets are pried open and the kind of trade pro
tection that is necessary for an emerging economy to survive is
undermined. In short, the billion dollar loans that come from the
IMF and the World Bank are only granted through the auspices
of G7 trade advantage. That is, the U.S. Congress will not sanc
tion an IMF loan if the conditions of the loan are not imminently
profitable for U.S. business interests. As long as this is part of
the loan restructunng apparatus then these loans are not really
granted in good faith to the onginal constitution of the Bretton
Woods Institutions like the IMF and World Bank. In the long run
imbalance of trade in conjunction with tiers of interest are a sure
formula for economic failure and a nation's eventual impoverish
ment — the exact opposite of the ideals espoused by the IMF
and the World Bank — i.e., 3rd World development. Instead we
have a sign on the dotted-line war of attrition and devastation
waged by New Age carpetbaggers armed with G7's money
monopoly
In the end loan pressure cuts into the very things devel
opment is supposed to provide, social progress and economic
independence. Compounding interest and trade liberalization
thus become the silent oppressors of three-quarters 6f the world
Add that real interest rates around the world are hovering at an
unprecedented and usurious 4%. the international credit cartel is
laying a heavy and brazen hand upon the land and its people
William Greider sums it up aptly in his Secrets of the
Temple
In time, when future generations are able to look back
on this system with clear eyes, they may recognize its true
ugliness: the rich nations of the world are acting like ancient
usurers, lending money to the desperate poor on terms that
cannot possibly be met and. thus, steadily acquiring more and
more control over the lives and assets of the poor This is done
mainly by commercial banks and private capital, but amplified
and policed by public lending institutions Citizens on the wealthy
end of the global system may claim to be innocent of these
practices, but their ignorance and indifference make them
complicit too
In recent years there has been outcry for the need to
forgive some or all of these LDC loans An international coalition
by the name of Jubilee 2000 is one critical force behind this
concern. Originally conceived in 1990 by Martin Dent, a political
economist at the University of Keele, Jubilee 2000 receives its
inspiration from the 'Year of Jubilee' as described in Leviticus 25
and the Christian concept of the forgiving of obligations every
fifty years Dent's campaign initially drew its support from com
munities of faith, but in the last three years secular and non
governmental organizations have picked up the cause
The Jubilee 2000 platform is aimed at the debts of all
impoverished nations, but focuses on 41 countnes, 33 of which
are in Africa, that fall into the category of 'Heavily Indebted Poor
Countries' (HIPC). The platform calls for the complete cancel
lation of debts that qualify as unpayable (Unpayable debts are
defined as debts more than two and a half times a country's
annual exports.) The cancellations are not to be tied to structural
adjustment programs. There must be an understanding that both
the lender and borrower share responsibility for the original debt,
and that the main benefactors of the relief will be the common
people.
Presently the coalition has sixty offices worldwide and
has collected some 20 million signatures on their petition for
debt cancellation. It has staged massive demonstrations at
recent G8 summit conferences, including 70,000 protesters
at the summit in Birmingham, England in 1998, and 40.000
at Koln, Germany in June 1999 (And several thousand more
at the Seattle WTO conference in late November 1999.) Due
to this pressure, there has been movement in the G8 for debt
relief What just ten years ago wuld have been unthinkable is
being considered. An initiative for HICPs was launched in 1996
in Washington. D C. by concerned world leaders and Washing
ton social institutions. In 1998 the World Bank and the IMF
attended the HIPC initiative meetings in Paris and for the first
time entered into the dialogue A month later, the first of these
new debt relief programs was offered to Mozambique.
Unfortunately, the IMF's new HIPC arrangements do
not meet the conditions of the Jubilee 2000 platform. It is not
complete cancellation and the package still contains structural
adjustments. There is even suggestion among IMF critics that
the new debt arrangements benefit the international lending
institutions more than the HIPC. That is, the restructuring really
amounts to further assurance that the credit cartel will continue
to receive its interest payments and that the debt reductions
were only to keep the HIPC solvent enough to remain a viable
source of bank income For all the "feel good" trappings of these
concessions — even with President Clinton's public statements
on the need for debt cancellation, there is no reason to believe
NOTES
1 The Group of Seven has added the former Soviet
Union to its number making eight For the purposes of this
article, however, the G7 have been the sustaining force behind
the international banking community
2 The G7 fractional reserve monetary system is a
system of "credit money " It allows a bank to extend credit in
great excess of its banked reserves (Generally, a bank needs
only 3% in reserves of what it loans out — i. e.. a $3000 reserve
entitles a bank to loan out $100.000) In this way "credit money"
or "synthetic money" is created whenever a loan is made It
appears only as a deficit on an electronic ledger and disappears
as it is paid back In other words, the only thing that is real about
the money loaned is the bank's judgment of the financial poten
tial of the borrower — can they make this money work? Meaning
the banks risk only some small portion of the loan in return for a
borrower's fee and the regular payment of interest
3 Yes. one hand shakes the other The United States,
the world's largest importer of oil accepted the new oil prices
only on the condition that OPEC's profits would be placed in
American banks In a round about way. the increase in oil prices
was given back to the United States by allowing American
bankers to make money off OPEC's profits Think of this —
Standard Oil buys a billion dollars worth of crude for its refineries
from Saudi Arabia Saudi Arabia then places that billion dollars in
Chase Manhattan, which is partly owned by the Rockefellers of
Standard Oil Chase Manhattan then loans this money out and
earns back many multiples of the original expense of the crude
oil OPEC gets its price increase and the Rockefellers make
percentage gains on every dollar of that increase One
Rockefeller s money buys OPEC crude, and then OPEC gives
that same money to another Rockefeller to invest In a sense
Standard Oil gets the money coming and going Meaning the
crude is simply free grease for their money making machine
PAGE 15
that the international leaders wll ever forgive these debts entire
ly What is going on is really a lot of public relations and smoke,
veiling a powerful credit cartel
For all the view points that complicate this discussion,
there is historical precedent for debt forgiveness of this magni
tude It is not something that should be considered unreasonable
charity in this age of capitalist rule. The London Agreement in
1953 vastly reduced Germany's debt to England from World
War II. This was relief from a war debt generated by one of the
most despicable of all despotic regimes. In another extreme
instance, the United States paid an estimated $1 36 trillion in
the 1990s to bail out several of its largest banks after the
massive savings & loan fraud of the late 1980s This amounted
to a wholesale forgiveness of vtfiat was really unconscionable
acts by greedy bankers. And most of the bailout money came
from U.S taxpayers. (Incredibly, $1 36 trillion vwuld be enough
to eliminate nearly three-quarters of the 3rd World debt! An act
of charity for the world's most needy individuals — not a bunch
of profiteering go-go bankers and sleazy real estate agents.)
At the very least, there is provision in international
law for the cancellation of what is called "Odious Debt," debt
incurred by corrupt dictatorships for personal gain When these
LDC loans are reviewed, it should be noted that large portions
were granted to the likes of Marcos in the Philippines, Suharto
in Indonesia, Somoza in Nicaragua, Mobutu in Zaire, or the
apartheid government of South Africa But this almost seems
secondary to the larger question These debts are simply
mathematically unpayable under the trade conditionalities that
the lenders demand They are also illegitimate because of the
economic conditions surrounding the loans of the mid-1970s
(a huge international oil deal) and the outside factors that
caused the interest rates to double and triple over a period
of payment (the cost of the Vietnam War) Moreover, they
are immoral because of the high percentage of government
revenues that must go to pay them, the resulting lost social
programs, the exploitation and devastation of the environment
that debt pressures incur, and the present usurious interest rates
that are being charged If the intent was development, then why
must the value of the original loan be paid ten times over?
To continue to milk the 3rd World for interest payments
on generations of debts that go back as far as the origin of the
Vietnam War is criminal, especially considering the circumstan
ces that now exist in the LDCs. It is no far stretch to say that it
is all odious. What the international credit cartel and its backers
are doing is nothing less than war A heinous war as ugly and
every bit as devastating as any the world has seen. The death
tolls, though they accumulate slowly through infant mortality,
improper medical attention and malnutrition, will eventually
exceed the death tolls of all wars ever fought. And it is not
soldier against soldier knowingly at war It is the impoverished
slowly squeezed to death by the hunger of international finance
In effect, huge portions of the 3rd World have become prisoners
of war camps, contained by an invisible barbedwire as real as
synthetic money
The ambiguity and hypocrisy of the situation is nause
ating Forty years ago one of the stated purposes of 3rd World
development was population control. Concerns for overpopulat
ion and dangerously high 3rd World birth rates first came to
public awareness in the late 1950s and early 1960s Along
with dissemination of birth control devices, it was believed that
development brought about social progress, education and
demographic transition — that is. vtfien increased awareness
through education brings population restraint by choice.
Unfortunately, as long as the payment of these debts is
prioritized over the advance of social programs and education,
demographic transition does not occur And population control
becomes something considerably different. The excess of
people are simply starved off the face of the earth through
crushing interest payments
At the bottom of this dark ;ituation breeds a dangerous
elitism Suggested is that there is something superior in the 1st
World It makes the rules. It monopolizes the creation of money,
and in its own roundabout way, it decides who has and who
doesn't All of this undermines the ideal of a global democracy.
It reinforces the strength of our world feudal state And it widens
the gap between classes of people There is a certain social
polarization in progress It is time for the monied aristocracy to
find benevolence If they cannot, their greed will torch the anger
of their wrking class subjects. Without change, without letting
up on the yoke of unpayable debt, the feudal lords and their
credit managers risk testing the tenets of Mr Marx anew It will
take only a single spark to start a prairie fire
Dan Armstrong's most recent article for the NCTE
was his satirical spoof of the Times Eagle editor in the May/June
99 issue. "When They Said Repent (I Wondered What They
Meant): An Inside Look At Y2K".
HOPE L. HARRIS
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