by Nan Cobbey
Lambeth Conference Communications

Twenty-two of the 36 bishops in the Lambeth Conference sub-section addressing international debt have sent a letter and five-page commentary to World Bank President James Wolfensohn to raise questions about the bank's approach to international debt.

Their missive, mailed August 1, details some of "the worst and most salient examples of institutional optimism" for which they hold the bank responsible. They describe the suffering that results when such "optimism" over-estimates a nation's earning abilities and annual incomes and results in disastrous debt burdens.

"It is clear that no blame can attach to individual [World Bank] staff members, still less to a bank president only two years office," says the commentary. "At most they reflect a mind-set, which does not sit well with a preferential option of the poor." The bishops then ask the question they could not ask when Wolfensohn had to leave so abruptly after his address to the conference, July 24. "Does it derive in part from an unacknowledged preferential option for the rich?"

Commentary reflects report's passion

The commentary sent to Wolfensohn reflects the passion illustrated in the subsection's draft report released to the conference this week. That report emphasizes an important credal statement: "We believe God created a good world for all persons . . . a world in which we are bound together in our common humanity, formed in God's image and in which each person has equal dignity and value . . . . God has given bountiful resources for all to share . . . . We are responsible to hold God's gifts in trust for one another seeking the good of all."

The subsection's report, however, claims that statement is not reflected by the bank's policies.

"Developing nations represented among us pay up to 10 times as much each year in debt repayment as they receive in aid from the wealthier nations," the report states. "Up to 40 percent of a nation's income is spent in debt servicing instead of basic needs such as food, health and education. This is a scandal."

The report explains how the situation evolved: "The crisis of indebtedness . . . must be placed in the context of decisions by Western banks in the 1970s to disburse, rapidly and widely, 'petrodollar' loans as a way of averting a crisis of inflation in the West."

Then, says the report, during the 80s and 90s when interest rates were at historically high levels and prices of the borrowers' export commodities fell, it became "difficult for indebted nations to raise the hard currency (US dollars, Yen or Sterling) needed to repay debts." At the same time, the cost of imports from Western nations kept rising. With the World Bank and IMF encouraging de-regulation of capital flows, investors could repatriate capital and profits, leaving debtor nations little hard currency with which to pay loans. Converting local currencies brought even greater losses.

"As the debt crisis in the countries of Asia, Africa and Latin America worsened in the 1980s, the IMF and World Bank stepped in and began offering concessional or 'soft' loans (lower rates of interest, longer grace periods) to help in the repayment of old loans. According to the report, "by the mid 1990s it had become clear that these loans . . . were adding to the problem."

Serving the West's economies

In some countries, report the bishops, poor people turned from the production of coffee or cocoa to drugs like coca "more valued in the West." Governments in poor nations "stripped hardwood timber forests to raise hard currency . . . damaging the environment further."

The agreement in 1996 to write off some of the debts for the poorest nations-known as HIPC or Heavily Indebted Poor country Initiative-draw mild praise and strong blame in the report.

"[The agreement] embraces the principle of debt cancellation . . . and thus implicitly accepts joint responsibility for the accumulated burden," said the report. In practice, however, HIPC provides almost no relief, it claims. As examples, the report notes that "the Mozambique government will make a saving of £13 million a year on debt service under HIPC. Instead of paying £113 million in debt service, Mozambique will be paying £100 million . . . to her much richer creditors."

Uganda saves even less. "Before HIPC, average debt service . . . was $118 million per year. Between 1999 and the years 2002/2003 debt service is due to fall to an average of $117 million per year," states the report.

Threat to democracy

Instead of proposing a series of resolutions to support their report, the bishops wrote a two-and-a-half-page statement and have submitted it for the "Agreed" list. In their statement they call the "vast expansion" in the power and quantity of money and the "huge increases" in borrowing, damaging, both materially and spiritually. They call debt relief, including cancellation of unpayable debts, "not sufficient." They call for negotiations to be speeded up, saying, "children are dying, societies unraveling under the burden."

To the political, corporate and church leaders in both creditor and debtor nations they issue a series of requests for oversight, monitoring, and holding governments accountable. The bishops also call for leaders to cooperate with the United Nations in establishing a Mediation Council to respond to appeals from debtor nations, identify "odious debts" and ensure accountability on all sides.

In the end, all the theology, statistics, data from banks and non-governmental organizations, stories from human rights monitors and advocacy groups boil down to one simple statement, printed on page two: "If my bowl is full and yours is empty, I must share what I have."