Thanks in large part to persistent campaigners in the global South and their international supporters, a plan granting 100 percent multilateral debt relief for 18 impoverished countries has been approved by leaders of the Group of Eight industrialized countries in advance of their July meeting in Scotland.
When President Bush stood with British Prime Minister Tony Blair at the White House recently and argued that “highly indebted developing countries that are on the path to reform should not be burdened by mountains of debt,” he may have been the first American president to endorse full debt cancellation for some of Africa’s poorest countries. But he merely echoed what debt relief activists in the globalization movement have been saying for a decade.
Observers have often remarked in recent years that globalization demonstrators have won the moral argument about trade and development, yet have not been able to translate their positions into policy. The debt victory, however, provides a clear instance in which allied activists from Africa, Europe, the United States, and beyond have affected governmental decision-making and opened real possibilities for human development.
For years, demonstrators promoting debt relief were dismissed or derided. In the early ’90s, citizens of the developing world condemned an emerging situation in which some impoverished countries, especially in sub-Saharan Africa, paid more in debt service to wealthy nations than they were receiving from in aid. Still, the issue had little traction in affluent countries. “There was almost zero awareness” of the debt issue in the United States at the time, says Neil Watkins, National Coordinator of Jubilee USA, the leading coalition of debt relief advocates.
Social movement efforts changed that. In 1998 and 1999, global activists, who had united in the international Jubilee debt campaign, mobilized protests of more than 50,000 supporters at the respective G-8 summits in Birmingham, England, and Cologne, Germany.
They also gained the support of religious leaders such as the late Pope John Paul II, who held up debt relief as “a precondition for the poorest countries to make progress in their fight against poverty.”
By this time policy-makers and pundits could no longer ignore the call for debt cancellation. Some went on the attack. Following the Birmingham demonstrations, Andreas Whittam Smith, a columnist from the London daily The Independent, echoed much of elite opinion by calling the Jubilee campaign’s goals “laudable” but criticizing its political strategy as “badly conceived.” He charged that the coalition’s political action would “be ineffectual … if not counter-productive.”
In fact, as grassroots efforts to highlight the issue grew, wealthy countries responded at each stage by grudgingly expanding their limited proposals for debt relief. While never satisfactory, the previous G-8-endorsed plan — the Heavily Indebted Poor Countries initiative — nevertheless began establishing a track record for what cancellation could accomplish.
Conservative critics have regularly charged that money from debt cancellation would be mismanaged and would not be used to reduce poverty.
In fact, HIPC demonstrated that cancellation could be a most effective form of foreign aid, allowing developing countries to retain and use their own resources.
By 2004, HIPC had advanced some measure of relief to 27 countries, including Tanzania, Uganda and Mozambique. A report from the World Bank that year showed that together these countries nearly doubled their total spending on poverty reduction — including education, health care and clean water — in the period from 1999 to 2004.
A final turning point in the debate came in the aftermath of the invasion of Iraq, when the Bush administration appealed to creditor nations to forgive tens of billions of dollars worth of Iraq’s foreign debt.
With long-time advocates of cancellation unexpectedly hearing the leader of the world’s largest economic power contend that unfair debt endangered a poor nation’s “long-term prospects for political health and economic prosperity,” the moral debate was effectively closed. All that remained was for policy to catch up.
While the G-8 agreement, involving more than $40 billion of debt, sets a landmark precedent, Jubilee campaigners will have much work ahead of them making sure that 100 percent cancellation is granted to other poor countries in need, as well as to nations who hold “odious” debts accumulated by past dictators.
Yet the challenges that remain should not obscure a major milestone — one 10 years and dozens of protests in the making.