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More Making a Difference Activities

Debt, Debt and More Debt!

Have you ever owed money to someone? Have you ever been charged interest on the money you owe someone? Money lenders make money by charging what is called interest on the money they lend you. (They are very interested in money). So, if you borrowed $100 at 10% interest you would have to pay off $110.00. Can you imagine what it would be like to borrow, say, a million dollars? Or two million? Or more? Many poor countries around the world have done just that, borrowing from the rich countries and they are now in the situation of having to pay off their loans, which have swelled because of the interest being charged. It is impossible for them to pay off their debts because the interest just keeps building, and some countries have had to borrow more money just to pay off some of the interest. Rich nations take back $9 in debt repayments for every $1 given in aid.

In the meantime, in order to pay off their debts, these countries spend less on health, education and social services; cut back on food aid; cut jobs and wages; and take over small farms in order to produce large-scale export crops. In short, these debts are hurting the people in these countries. Over 50 countries in the world, including Peru and other Latin American countries, have debts that can never be paid back but continue to be paid daily with people's lives. The debt burden of the poorest countries is 93% of their income. 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 current lending and debt relief process is fundamentally unjust. International loans are negotiated in secret between local elite and powerful creditors like the International Money Fund, the World Bank, and government export credit agencies. Loans are often made for political reasons or to promote exports, or to recover from natural disasters such as drought or hurricanes. It is ordinary people who pay the costs as funds are diverted from water, health, education and sanitation into debt repayment.

An organization called Jubilee 2000 (check out their website) is proposing that these debts be cancelled and a new start be given if the money used for debt service was put into health and education. The campaign is inspired by the scriptural idea of the Jubilee Year: periodically, every 7 x 7 years (i.e. 50 years) debts are forgiven and slaves set free, and "liberty is proclaimed throughout the land". Jubilee is a time to apply self-righting mechanisms for restoring balance to society.

On June 18, the 8 governments to whom money is owed will be meeting in Cologne, Germany. In the countdown to this meeting, called the "G8 Summit," Jubilee 2000 will be targeting key G8 leaders to keep the pressure on. You can target your government. In the US, Clinton and Gore have finally joined the crowded wave of G8 leaders putting forward proposals for debt cancellation. However, as the largest creditor, they have yet to take an international lead on the issue. Play your part in raising the profile of the campaign in the US. Send a virtual postcard to President Clinton - you can Email him at this address: president@whitehouse.gov. Or you can write to:

President Bill Clinton
The White House
1600, Pennsylvania Ave.
Washington, D.C. 20500. USA

You can also send an email to the finance ministers of Britain and the USA: (To use this text, just copy and paste into your email message; or you can write your own message)

The proposals for greater debt cancellation put forward by you and your creditor colleagues are still putting a delay of at least 3 years on debt cancellation. I believe that debt cancellation needs to be agreed much more quickly, so that the poorest countries in the world can enter the new millennium with an opportunity to escape the cycle of poverty and debt they are still trapped in. When you join with other creditors at the World Bank spring meetings in Washington this month, please ensure that a much quicker timeframe for debt cancellation is agreed. Further delay is costing lives.

Send your message to:

Mr Gordon Brown, Chancellor of the Exchequer at info@hm-treasury.gov.uk
Mr Robert Rubin, US Secretary of the Treasury at dale.servetnick@treas.sprint.com

You can also sign a petition and send it back to Jubilee 2000 or start a chain email which you can send to all of your friends and contacts. TAKE ACTION NOW!

  1. Sign the Petition yourself. Send an email to signature@j2000petition.org. Put your name, city and country in the SUBJECT and copy and paste the following petition text into the message: We, the undersigned, believe that the start of the new millennium should be a time to give hope to the impoverished people of the world. To make a fresh start, we believe it right to put behind us the mistakes made by both lenders and borrowers, and to cancel the backlog of unpayable debts of the most impoverished nations. We call upon the leaders of lending nations to write off these debts by the year 2000. We ask them to take effective steps to prevent such high levels of debt building up again. We look for a new beginning to celebrate the millennium.

  2. Get your friends to sign the petition - select all the text from this box into a new email, put Cancel The Debt in the SUBJECT and then send the email to all your friends and contacts asking them to sign too. Be sure to include the address of where to send the signatures.


 
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