The UK’s Jubilee 2000 web site – bang up to date with loads of campaigning idea and information

The Debt Channel, part of OneWorld on-line, provides links to many useful sites for debt info.

The World Development Movement

War on Want

Friends of the Earth International

Special issue of the New Internationalist (May 1999) on debt

Australia’s Jubilee campaign site

USA Jubilee campaign site

Life and Debt
Stephanie Black's acclaimed film on the impacts of globalization and debt on Jamaica has been released in the USA. A poignant, poetic and thoroughly educational film which will hopefully be released internationally soon. Visit the Life and Debt website for schedules and more information

FACT: Bolivia is one of the poorest countries in Latin America with and the highest child mortality rates on the continent. The country has to spend half of all its (legal) export income on paying its debt. 40% of Bolivia's workforce depend on the drugs trade for a living.

FACT: It is the world's largest debtors who are chopping down their forests the fastest. Brazil is the world's largest deforester and one of its largest debtors, owing US$112 billion. It is cutting a staggering 50,000 sq km of forest every year - largely to service its debt.

What is the debt crisis?
Some developing countries are practically bankrupt. They owe foreign creditors so much money that just paying the interest means their governments can't afford primary education, basic health or clean water. Some don't even earn enough foreign currency from exports to pay the annual interest repayments due on their debts.

How did the problem start?
All countries borrow overseas at some point. If the money is invested to increase the capacity of the economy, more foreign debt is not a long-term problem. Unfortunately many developing countries borrowed too much and invested it badly in the 1970s and 1980s, often encouraged by Western governments.

When did they start getting into trouble?
The economic environment started turning against developing countries when oil price rises hit. Then, a slow down in growth in the West cut into their markets, while prices for their major exports dropped. Some countries were governed by corrupt elites who siphoned off foreign dollars into their own personal accounts. The result was that their economies grew too slowly to service their debts, while interest rates rose. Developing countries who owed rich countries US$600 billion in 1980, now owe US$2500 billion.

If anyone takes a loan shouldn't they repay it? Why should any debts be cancelled?
Many of these debts have already been paid many times over in local currencies. Between 1981 and 1997 the less developed countries paid over US$2.9 trillion in interest and principal payments. This is double what they received in new loans. For each $1 that industrialized countries provide in grants, developing countries pay back $13 in debt servicing. We don't expect people in Australia who go bankrupt to sacrifice the health and education of their children to keep paying their debts. And yet, we continue to allow millions of children in poor countries to die each year of preventable causes while their governments are forced to repay loans to rich creditors.

Women are also forced to bear an unfair burden of the debt crisis, making up for the loss of government services in health and education through unpaid work. Consider too, the dramatic changes since the original loans were made. Borrowers had no control over skyrocketing rates of interest and plummeting commodity prices. Responsibility for loans has rested with borrowers, allowing lenders to carelessly provide large loans to corrupt political leaders. Ordinary people have mainly borne the cost of repaying loans, with no say in the borrowing or spending of the money.

Which countries are most in debt and how much do they owe?
Japan is the world's biggest debtor but there is no serious prospect of it defaulting on its loans. Most of the countries who are in the worst trouble are extremely poor African countries. In 1980 sub-Saharan Africa owed US$84.1 billion. Today it owes US$222 billion - 71 per cent of its annual output.

To whom do the poorest countries owe money?
Most is owed to foreign governments and multilateral financial institutions like the IMF (International Monetary Fund) and the World Bank. A smaller amount is owed to commercial banks.

How has the problem been tackled over the past 25 years?
Lenders thought giving poor countries more time to pay would solve the problem, but eventually realized some nations were never going to be able to repay their debts. In 1988, the Paris Club (which represents main lender countries), agreed to cut the debt burdens of the most severely affected countries by 33 per cent. By 1994 they had raised this to 67 per cent. US$300 billion worth of debt has been rescheduled over the last 2 decades. The Brady Plan has also proved effective in clearing up bad loans from the Latin American debt crisis of the 1980s. However this did not work for many sub-Saharan African and some Asian and Latin American countries which still owe too much to be able to service their debts.

What else was tried?
Iin 1996 the World Bank and the IMF developed a new approach. Under the Heavily Indebted Poor Countries (HIPC) Initiative, all creditors agreed to jointly reduce the debt burdens of the worst affected countries to a "sustainable" level where debt repayments are less than 20-25 per cent of export earnings.

Who has benefited so far?
The World Bank identified 41 countries potentially needing debt relief under the HIPC Initiative. Uganda was the first country to receive agreement to have its debt burden cut. Since then, Bolivia, Guyana and Mozambique received some relief too. Burkina Faso, Mali, & Cote d'Ivoire now have dates for their debts to be cut. But already, Uganda and Bolivia again have levels of debts which are unsustainable.

Why is it taking so long?
Though some progress has been made, the steps made by the G8 and the IMF and World Bank are small and take many years to benefit the poorest in heavily indebted countries. The time has come to take bigger strides in releasing the poor from their burden of debt.

What else can be done?
All eligible countries could at least be started on the process of receiving debt relief under HIPC by the end of the year 2000. That would mean fast-tracking some countries who haven't fulfilled their three years of economic reform. But the HIPC Initiative isn't enough. It still leaves countries paying too much on debt in a process that takes too long.

Why is this debt unfair?
Mozambique spends ten times more on interest than on health care. Zambia spends five times more on interest than on education. These and many other countries are diverting money, which could be invested in eradicating poverty, to pay interests on debts that are unpayable. They can never hope to earn enough from exports and aid payments to repay all the interest that has built up.

Will debt relief really benefit the poor?
Debt relief linked to eradicating poverty will give millions of poor people a chance to improve their lives. Without it, there is no real possibility of eradicating poverty. Poor countries' governments cannot adequately fund essential education, health or infrastructure to raise living standards. Uncertainty created by debt deters foreign investors.

Won't countries just get into debt again?
Steps need to be taken to prevent such a debt trap ever building up again. Debtors and creditors should share responsibility for the terms of future borrowing.

• A Beginners Guide to Debt, Jubilee USA web-site