Jubilee
Zambia stands for Debt Cancellation and debt reparations
By
Jack Jones Zulu
As you have heard from the introductory remarks, the role of the church in development is crucially important and cannot be overemphasized. Since time immemorial the church has always and will continue to speak out on societal structures that impinge on people’s well being. We strongly believe that before a person can attend to his or her spiritual needs, his or her physical needs must be met first.
In line with the topic above my presentation will be in two parts.
· First, I will deal with three major reasons why Jubilee-Zambia continues calling for total debt cancellation.
· Second, I will then lay an historical and analytical foundation for Jubilee-Zambia to demand debt reparations.
PART ONE: TOTAL DEBT CANCELLATION
I am looking at three reasons for debt cancellation in Zambia: (1) Economic, (2) Social and (3) Political. Is total debt cancellation feasible? This important question needs a careful analysis and well-thought out answers from all the participants in this room. The way we respond to it will determine and shape the future role of the church in adding its voice to the issue of debt cancellation in Zambia.
A) Economic Reasons
The world today is bipolar, that is, divided into the two economic blocks of the rich North and the poor South. The former determines the global economic order while the latter hesitantly follows on. Unfortunately Zambia finds itself in the category of the poor countries and the implications of such are obvious. A cursory economic glance at Zambia today brings to the fore a glaring picture of marginalisation in terms of the national development process.
Zambia is one of the most highly indebted poor countries with a debt per capita of close to US$600 contrasted with a GNP per capita of slightly over US$300. The external debt stock currently stands at US$5.84 billion, mainly owed to the multilateral and bilateral financial institutions.
First, most of Zambia’s national debt was incurred due to the double tragedy that happened in the 1970s when the price of Zambia’s chief export, copper, plummeted, while at the same time the price of Zambia’s chief import, petroleum, more than trebled at the world market. We borrowed heavily to compensate for this imbalance of trade. Second, Zambia’s frontline role in supporting liberation struggles in Southern Africa cost the nation dearly both in financial and human resources, in what has come to be known as the “Apartheid-caused debt.” For instance, in ensuring that the Apartheid and racist regimes were totally isolated, Zambia and a host of other nations imposed economic sanctions. But this meant that we had to borrow heavily to secure alternative trade routes to the sea for our imports and exports. Moreover, the stance we took against the oppressors came with costs such as destruction of bridges and roads through bombings and air raids. Sanctions and counter sanctions cost us about US$9.630 billion. Our research findings (“The Apartheid Caused Debt,” August 2000) show that Zambia contracted a debt of US$5.3 billion in the struggle to free its neighbours from the shackles of oppression.
In order for our country to free itself from the yoke of external debt, it had to undertake a series of economic reforms (SAP). We all know what this has meant: removal of subsidies on our staple food, Unga, a drastic reduction in budgetary allocations to the social sectors with a corresponding introduction of user fees in schools and health centers, privatisation of nearly all state-owned parastatal organizations, opening up of our borders to foreign competition under the guise of trade and financial liberalisation, etc.
By December 2000, Zambia reached its decision point for debt relief under the auspices of the Heavily Indebted Poor Countries’ (HIPC) scheme, first launched in 1996 by the World Bank and the IMF.
From the creditors’ view, it is argued that Zambia under the HIPC initiative will access substantial amount of debt relief over the next 22 years subject to remaining on course with donor set economic benchmarks. Key among these is the continuation of privatisation of the remaining state owned national commercial bank and the electricity generating company.
However, we should hasten to point out that the HIPC initiative and partial debt cancellations are not a panacea to Zambia’s indebtedness. Rather, we view this is as a well-calculated ploy by the donors and creditors alike to ensure that Zambia remains on course with its debt service obligations. This is done at the expense of its domestic social and economic demands. Moreover, the HIPC scheme is premised on the assumption of a strong export base to support economic growth, which is seen as cardinal to poverty reduction. But for Zambia this is a pipedream as the industrial sector that used to provide export earnings is terribly limping. Zambia has no capacity to meet its debt service obligations as our import bills far outweigh our export earnings. Furthermore, the impact of the September 11 bombings in the United States means low aid flows, few investment opportunities and generally poor export receipts for Zambia and other African countries..
From the fiscal point of view, most of Zambia’s budgetary requirements are donor funded, e.g., last year about 52% of the budget resources came from donors. (We will soon learn whether that percentage is topped in the 2002 Budget.) I think the term “donor” here is misleading because it gives an impression that the money was given to us freely when in actual sense it was loaned to us and like all borrowings, it is expected to be paid back in future. The effect of creditor “support” into our budget is to bloat the debt burden. In such a situation the government becomes more answerable to the creditors rather than its people. After all, it is said that he who pays the piper calls the tune!
Debt sustainability from the standpoint of a creditor is measured purely in economic terms of relating exports to the GDP rather than relating it to a country’s developmental needs. For instance, even after receiving debt relief, Zambia will pay on average $167 million for the next five years and thereafter the amount declines to an average of $157 million in subsequent years. On the other hand, the total budget for spending on health and education has been much less than these figures, for example, in 2000 it was $76million and $70 respectively.
We thus find the IMF and WB contradictory in their policy goals for Zambia. On one hand, they are busy propagating ideals of poverty reduction in HIPCs, while on the other hand they are eagerly supporting economic reforms that are mainly responsible for increased poverty levels in our country.
As Jubilee-Zambia our contention is that for as long as development plans for our country continue to be hatched in foreign capitals, they risk being irrelevant to the immediate needs of the people they are intended to serve. Currently that is the greatest challenge we are facing as a country as the government has very little say on the economic and political agenda for Zambia. In light of the experiences Zambia has had with the IMF and World Bank policies there is no guarantee that debt relief monies accrued under the HIPC scheme will be translated into significant reductions in poverty levels for as long as the creditors continue tying debt relief to stringent economic reforms such as the massive civil service retrenchment exercise.
From the economic analysis above, it is clear why Jubilee-Zambia continues to argue for debt cancellation as a necessary condition for improved development in the country.
B) Social Reasons
Zambia’s role in the struggle against racism and Apartheid was a moral one that was part of a universal struggle by humanity. Apartheid was a crime against humanity and directly violated the Universal Declaration of Human Rights. The gross human rights violations occurred not only internally but beyond the borders of South Africa. Certainly Zambia was not spared from its negative consequences. The debt burden in Zambia should be seen in this context.
Part of Zambia’s external debt was contracted to support our brothers and sisters in the region who had been displaced by this diabolical Apartheid system . And while the Apartheid regime was dismantled in 1994 after the ascension to political power of President Nelson Mandiba Mandela, its social effects are still very much with us today in terms of the huge amounts of debt service we are still made to pay to our creditors.
The social disaster caused by debt can be seen everywhere in Zambia. As the creditors continue insisting on structural reforms as a basis for fresh funding, the immediate offshoot of these reforms has been an increase in joblessness and poverty levels. The country has now to contend with a large army of vulnerable people who cannot adequately support themselves. Health and education facilities are for the majority of Zambians out of reach while most families can only manage one meal per day. To the creditors, it matters less whether our children have fed or not provided Zambia is on course with debt service payments!
As a debtor country, every dollar that we pay back to our creditors means that one mouth is going hungry per day, medical services are denied to a deserving man, woman or child, and a child is kept out of school .The number of street kids and orphans is on the increase and government statistics show that 13% of Zambia’s children are orphans -- thereby making Zambia the country with the highest proportion of orphans in the world. One third of the children aged between 7-13 years and eligible for school are out of class, trying to earn a living by street vending and many forms of child labour.
So we must ask ourselves: should we then continue paying back debts even when the poor are hurting and are perishing while the people in the West not only have enough to eat but also can afford to dump excess food at sea in order to keep prices high at the world market? As Jubilee-Zambia we say NO to this gross injustice. Humanity is not an object but a subject of economic laws and therefore if these laws are not meeting the needs of people they should be changed.
Recent social statistics in Zambia indicate that:
In light of this social analysis, Jubilee-Zambia contends that the debt burden is unsustainable because debt service takes money away from the survival and developmental needs of so many people. For this reason, Jubilee-Zambia demands total debt cancellation in order to reconstruct the path to prosperity.
There is still another set of reasons to explain our call for total debt cancellation—political reasons. As you are all aware, Zambia is surrounded by eight neighbours and some are experiencing serious political turmoil largely caused by economic marginalisation of the people. Unless Zambia begins to address some of its economic problems (e.g. agricultural shortages, unemployment, etc.) and social problems (e.g., high poverty levels, street kids, HIV/AIDS, etc), it risks falling into political instability. Remember, political instability just like any other form of instability can be contagious and spread like bushfire. The wise adage ,“prevention is better than cure,” is befitting here.
One sure way to assure political stability in Zambia today is to tackle the huge external debt that militates against human development and destabilises the population. It is extremely important to recognise that there are a lot of political precedents that have been set that demonstrate that debts can and should be cancelled. From the creditors’ side, we know that debt cancellation is indeed a practical viablility – it can be done, it has been done!
We are aware of countries whose debts were cancelled in the past for various political reasons. For instance, Germany had its debts reprieved after World War II; Egypt had a similar experience after settlements with Israel in the 1980s; and Poland after the fall of the Berlin Wall. Recently the case of Pakistan exemplifies the whole situation where debts can be politically cancelled. In our view there is nothing economically sensible that Pakistan did to warrant debt cancellation from the creditors -- other than to host the allied forces in order to facilitate bombings in Afghanistan!
It should be evident, then, from the political analysis offered here that debt cancellation is both necessary and possible here in Zambia. So Jubilee-Zambia calls upon the political reasons to demand total debt cancellation.
My paper has set pace and tone to the issue of total debt cancellation in Zambia by addressing the economic, social and political reasons that lie behind the call for debt cancellation. However, my colleague will build on the religious call for debt reparations as they relate to our country. This is an issue that is fast gaining ground and momentum both at the national and international levels.
PART TWO: DEBT REPARATIONS
Now in the second half of my paper, I want to offer some some historical background and analytical reasons for calling for reparations. (The moral and religious grounds will be covered by in the paper by Pastor Mwetwa.)
To begin with, it is important to get a bit of historical background on the development of the call for reparations. It seems to have three geographical locuses: the United States of America, European countries, and South Africa.
In the United States, there has been a off-again, on-again, call for dealing with the economic and social consequences of that terrible institution, enslavement of the African. How does one compensate for the damage done by two hundred years of growth and development for the whites, borne on the backs of blacks snatched from their homelands in Africa, brought across the sea in horrible conditions, and bound to an animal-like existence working on plantations? Economists will acknowledge that the industrial prosperity of the northern States in the USA was made possible by the agricultural prosperity of the southern States. But that prosperity was only possible because of the institution of slavery.
Slavery ended in 1854, after a bloody civil war between the North and South in the USA. But legalised and institutionalised racial segregation – apartheid – officially ended only in the 1950’s and 1960’s. The legacy of racism and racial discrimination continues to this day. And the majority of descendants of the slaves live in abject poverty amidst the affluence of the States.
Can USA non-African citizens of today – who have never held slaves and many of whose ancestors came as poor and desperate, albeit free, immigrants to the States -- be made to pay restitution for slavery? Can they be required to sacrifice some of their current prosperity to restore to descendants of the Africans brought to the States as slaves? This is an extremely heated question that we certainly cannot resolve here this morning! A recent book by an African-American intellectual and leader, Randall Robinson, bears the title, Debt: What Do White Americans Owe Black Americans?, and argues that a case can and should be made for restitution to be paid by the American community at large for the terrible evil of slavery. As you can imagine, his book has stirred immense controversy on all sides!
Cross the ocean to Europe, and the reparations debate there has recently focused on what is called “holocaust claims.” This is the demand that money should to be paid to Jewish families who suffered from Nazi persecutions in the 1930s and 1950s. For example, courts have ordered major German firms to pay Jewish people for enslaving their relatives for work in factories.
This has encouraged claims to be made from South Africa, for Swiss banks to be made to pay reparations for their support of the apartheid regime. Loans were made to the Pretoria government, despite the worldwide sanctions policy to isolate a government committing a serious crime against humanity, the perpetuation of apartheid that was causing such great suffering for the majority of the people. For instance, recent revelations have been made that show Swiss military backing for apartheid’s chemical and biological weapons programme.
Much of the history of racism was focused on during the 2001 United Nations World Conference Against Racism, Racial Discrimination, Xenophobia, and Related Intolerance, held in Durban, South Africa. Reparations were called for – one of the highly disputed issue that caused the walkout of The USA and other countries. But despite setbacks, the topic of reparations has come to the fore in very important ways.
B) Analytical Reasons
With this historical background, I can now ask the question: Can Jubilee-Zambia, in conjunction with other Jubilee movements in the South, demand not only cancellation of the debt, but also reparations for past injustices? This raises the very interesting issue posed this way: “Who owes who?” Do Northern countries in fact owe a debt to African countries, including Zambia? Why would that be so, how much would it be, and how would it be paid?
Let me just concentrate on the first question – what grounds could be offered for saying that the North owes the South? – because the two other questions would require a much longer paper! Let me very briefly suggest three reasons: political, economic, ecological.
1. Political: The most precious resource of Africa – human persons -- was robbed by the slave traders, Moslems, European and American. The institution of slavery was established politically in various nations in the North. Indeed, the Constitution of the United States of America, adopted in 1789, protected the slave trade and counted slaves as three-fifths of a person. This crime against humanity was officially sanctioned and, as mentioned earlier, its operation generated considerable benefits to the non-slave population and their descendants.
Because of the political establishment of slavery, a case can be made that not only the descendants of slaves in the USA, for example, should be compensated, but also the continent from which these human persons were robbed. Reparations in the forms of special benefits would restore some of the wealth stolen from Africa.
2. Economic: Once the slave trade had ended, a new form of exploitation of African wealth became institutionalised: colonialism. The European powers who sat around a table in Berlin in 1885 and carved up the continent among themselves did not have the interests of the African people as their prime motivation. Rather it was economic greed, chasing after the mineral and agricultural riches of Africa. Imposition of colonial rule by military might was more harsh in some places than others, but in every place it was grossly unjust and it enabled the theft of great resources.
Because of the economic benefits that flowed out of Africa to the colonial masters in Europe, a case can be made that the African countries which today suffer from such great poverty (true, not all of it externally caused, but at least a very substantial portion of it) should be recompensed. “Debt Tribunals” such as the recent one in Porto Alegre, Brazil, which I attended (part of the World Social Forum), make this point very clearly.
3. Ecological: A recently identified reason for demanding reparations is the so-called “ecological debt.” This is the deeply disturbing fact that global warming – precipitated by carbon dioxide emissions primarily emanating from Northern industrialised countries – is wreaking havoc in poor Southern countries. Harmful climatic changes ranging from droughts to floods are causing immense suffering. In just the past few years, in Africa we have had disastrous floods Mozambique and devastating droughts in the Horn of Africa.
Because the industrialised Northern countries have continued pumping poisons into the atmosphere, a case can be made that the non-industrialised African countries which suffer great environmental hardships should receive reparations. Put simply and bluntly, some recompense is due for the fact that Northerners driving fancy motor vehicles are responsible for Southerners suffering hunger because of crop failure.
These three reasons – political, economic and ecological – have been developed here in only a very sketchy fashion because more work needs to be done by Jubilee-Zambia to establish this side of our case. But I hope that it is sufficient to give you an introductory picture, and a framework for receiving the perspective of a biblical basis for calling for reparations, the perspective to be offered by Pastor Mwetwa.
Let me conclude by summing up the position of Jubilee-Zambia that I have attempted to develop in my paper:
1. There are sound economic, social and political reasons for demanding total cancellation of Zambia’s debt.
2. There are solid political, economic and ecological grounds for calling for reparations to be paid to Zambia and other African countries.