Jesuits on G8 meeting in Cologne (fwd)

[Robert Weissman <rob@essential.org>]

Cologne
Monday, June 21st, 1999

Dear Friends

Following Sunday's announcement on debt relief by the G8, below is the
sample press release we wrote about last week.

We urge you to press release it (or a version thereof) in your national,
local press and Jesuit publications.  Following the release is the
background information which we sent last week for those of you who may not
have received it.

The campaign is far from over.  JDRAD will continue to push for real and
lasting reform.  Please use this information as you see fit to join with us
in our call for justice.

With many thanks

Niamh Gaynor
JDRAD Coordinator





* Press Release * Press Release * Press Release *

Date                                    Address
                                    Immediate Release

Cologne Communique Disappoints : International Jesuit Network calls for an
Ethical Solution to the Debt Crisis

The international Jesuit network campaigning for debt cancellation, JDRAD
(Jesuits for Debt Relief and Development), has criticized Sunday June
20th's G8 communique on debt relief as being flawed in its priorities,
being cost driven rather than needs based and failing to release sufficient
resources for poverty eradication and human development. 

JDRAD, a network of over 200 Jesuit and non-Jesuit academics, researchers,
and community activists from around the world, has consistently argued that
indebted nations are under no absolute moral obligation to repay their
debts.  Employing the Christian principles that legal contracts undertaken
in conditions of unequal power and severe need are fundamentally unjust,
and that in conditions of extreme need - such as danger of death by hunger
- one may take from the riches of others, JDRAD argues that an ethical exit
is imperative.  JDRAD further argues that what such an ethical solution
will be economically viable for the poor. The Social Justice Secretary on
behalf of Father General Peter Hans Kolvenbach SJ, Superior General of the
Jesuit order, together with sixty-four Provincials and Regional Superiors
from around the world, last week each independently endorsed a letter
supporting the Jubilee 2000 call for the cancellation of unpayable debts.

In Cologne this weekend at the Jubilee 2000 demonstration, JDRAD
representatives expressed frustration and disappointment at the G8
communique.

"This package is designed around what costs creditors will agree to incur
rather than on what debtors can afford to pay", JDRAD's German partner
Klaus Vaethroeder, SJ explained.  "If the G8 were really serious about
poverty eradication, and as signatories to various UN commitments to halve
world poverty by the year 2015 one would think they would be,  they would
first subtract the amount of resources each country requires to meet the
essential needs of it's people (food, shelter, health, education, etc )
before digging into the resources of a country.  They would also
concentrate on reducing the amount of money countries actually spend on
servicing their debts, rather than on the unpaid debt stock.  Today's
figures relate only to debt stock and reduce it insignificantly however",
he added.

JDRAD's Zambian partner Pete Henriot, SJ was concerned that the G8
communique made debt relief still conditional upon a three year record of
economic reform in line with the IMF's dictates.  "Conditions imposed from
the outside emasculate the responsibility of decision makers within the
country to seek and effectively represent the wishes of their citizens", he
said. "The 'probationary period' imposed on indebted countries is
economically damaging and politically destructive", he added.  JDRAD
proposes that conditions for debt relief be defined in-country by a
partnership association between national, political, and civil structures,
and international bodies. 

The network coordinator, Ms Niamh Gaynor, pointed out that debt relief, no
matter how significant in cost, may not benefit the poor until structures
and mechanisms are put in place to ensure that resources released reach the
most needy. "Today's communique makes no reference to such a structure",
she said.  She also reiterated the Jubilee 2000 call for a fair and
independent procedure to determine debt cancellation deals.  "The G8 have
no political mandate to make decisions on debt relief" she said.  JDRAD
proposes partnership association between national political and civil
structures and international bodies for determining, delivering and
utilising the proceeds of cancellation.



ENDS 

JDRAD Calls on G8 leaders in Cologne for a Just and Sustainable Exit to the
Debt Crisis

Background Briefing Paper


>From Thursday to Saturday, June 17-19, G8 heads of state will meet in
Cologne to discuss the debt issue.  G7 Finance Ministers have already met
(last Saturday, June 12th) and agreed a joint strategy for debt reduction. 
A few details of this have been released (Monday's Financial Times), and it
will form the basis for a final decision and Communique on the issue from
the G8 summit expected to be issued on Saturday next (June 19th).

Members of Jubilee campaigns from all over the world will converge on
Cologne on Friday and Saturday to call for debt cancellation.  A number of
JDRAD members, representing both JDRAD and their national campaigns will be
there.

The Social Justice Secretary on behalf of Father General Peter Hans
Kolvenbach SJ, Superior General of the Jesuit order, together with
sixty-four Provincials and Regional Superiors, have each independently
endorsed a letter supporting the Jubilee 2000 call for the cancellation of
unpayable debts. This has been sent to the respective Ministers of Finance.
 Many of our members have been active in the campaign in their own
countries.

On the Monday following the announcement (June 21st) JDRAD will send out a
sample press release to all our members, outlining our position on debt
cancellation and our reaction to the announcement.  We are asking our
members to press release this (or a version thereof) in their national and
local press and Jesuit publications. Below is some background information
on the issue and our information on the G8 position to date.  Please use
this information to brief your media in the days preceding the Saturday
announcement.

While the G8 have been forced by campaigners to put the debt issue on the
agenda, indications are that Saturday's proposal will fall far short of
what JDRAD has pushed for in Position Papers and our HIPC Review
Submissions:


A Poverty Focus : JDRAD has consistently argued that levels of cancellation
must be determined by debtors needs rather than by creditors costs.
Significant resources, currently employed in debt service, must be released
for poverty reduction. The current debt relief initiative on the table,
HIPC, concentrates on reducing debt stock not service. If significantly
greater levels of stock are not cancelled, service levels will remain
largely unaffected and there will be no impact on poverty.  Indications are
that Saturday's communique will reduce the debt stock to export ratio from
200% (current HIPC levels) to 150%.  This is a paltry reduction and will
fail to make significant inroads into reducing service levels.  JDRAD
supports other groups in the view that the assessment of what percentage of
government tax revenues can be spent on debt servicing should be made after
subtraction of essential spending on basic needs (food, shelter, health,
education, etc ). None of the G8 leaders have supported this proposal.     


Conditionality : JDRAD feels that pre-conditions imposed from outside in
order to become eligible emasculate the responsibility of decision makers
within a country to seek and effectively represent the wishes of their
citizens.  We have strong objections to the way in which ESAF conditions
are imposed and have repeatedly called for a delinking of ESAF conditions
from debt cancellation initiatives.  We propose that conditions for debt
cancellation be defined by officials, parliamentarians and civil society
in-country in a national plan that would concentrate on the use of
additional resources for development purposes and poverty reduction.  This
plan would evidently also need creditor approval.  Starting with an initial
tranche of cancellation, further cancellation should happen on fulfilment
of successive aspects of the national plan.  None of the G8 governments
support a delinking from ESAF.  The best they are offering is a reduction
of the timeframe of policy reform to three years maximum although countries
will continue to wait up to 6 years for debt stocks to be reduced. 


A Democratic Framework to Deliver Cancellation
JDRAD sees debt cancellation as the first step towards the development of
more permanent national and international structures to deal with the
problem.  In line with Jubilee's call for a fair and independent procedure
we have proposed a partnership association between national political and
civil structures and international bodies for delivering and utilising the
proceeds of cancellation.  Indications from the G8 are that their Saturday
communique will make no reference to the development of such structures.


The Cost
The cost of Saturday's package in 'net present value terms', (ie if it was
to be paid today in a lump sum) looks set to rise from it's current level
of US$ 13 billion to US$ 27 billion.  This is significantly lower than the
figures earlier pushed by the US ($36 billion) and the UK ($42 billion) in
negotiations running up to Cologne, and far less than the figure of $51
billion sought by Oxfam.  

This cost does not represent an up-front financing requirement as :
approx half of the costs are nominal yearly losses to donors which will be
written off anyway
much of the additional financing required can be met through IMF gold sales
and the transfer of World Bank net income, and
since the costs of debt relief will be spread over several years, they can
be absorbed on an annualised basis.

Oxfam calculates that the real cost of US$51 billion (NPV) debt
cancellation would be around $2.5 billion per annum over a ten-year period.

What could $51 billion achieve?  UNDP estimates that $6 billion could
achieve universal education for all, $9 billion water and sanitation for
all, and $13 billion basic health and education for all.  


The campaign is far from over. The demands of millions of signatories from
around the world cannot be ignored.  Our press release will be sent to you
on Monday.  Please use it as you see fit to continue the pressure for a
real and lasting solution.