Lambeth Perspective - International Debt

Canterbury: Saturday, 25 July 98

This report was filed by Simon Sarmiento, on the scene in England.

Other Anglicans Online coverage, with links to many other articles, is on the web at


Lambeth Perspective - International Debt

On Friday the bishops finally got to discuss what the organisers consider to be the major topic of the conference and something on which all of them could agree. Following a press conference on the topic in the morning with the Archbishop of Cape Town, Njongonkulu Ndungane and the Bishop of Worcester, Peter Selby, the three hour plenary session occupied the whole afternoon. It got space in all the London papers this morning, although less prominently placed than the sexuality stories earlier this week.

The Archbishop of Cape Town gave a long presentation which I do recommend reading in full; follow this link to the official press release copy. Here is an excerpt which gives only the flavour:

I want to assert from the start, that this is not a financial crisis confined to Africa or Latin America. Countries that were until recently described as economic tigers, today find themselves toothless in the face of their own rising indebtedness. As we meet here in the peaceful surroundings of Canterbury, we should turn our minds to the struggling peoples of Indonesia, Thailand and South Korea. All are trying, and many are failing, to cope with the catastrophic consequences of reckless lending and borrowing and their nations' rising international debt. Severe indebtedness and turbulence in emerging markets are de-stabilising the economies of Russia and Brazil --- and impoverishing their people too. The United States, the world's most powerful economy, itself has a very high level of international debt - of $1.3 trillion. This is twice as much as the US owed in 1994, and nearly triple the 1989 value. Although this debt does not pose a threat to human life in the US, as it does in the poorest countries, it is causing concern in international financial circles.

So let us be clear. The crisis of international debt that we are debating here today is not just a matter for the poorest countries. Nor is it a matter that only affects sovereign governments. It affects all of us everywhere, all of us who have become too dependent on credit cards. It affects those of us who struggle to repay loans to pay for the very roof over our heads. And those of us who live in fear of losing our jobs, and therefore our ability to repay our debts. Those of us in hock to the loan-sharks that prey on our poorest communities. We all live in the grip of an economy which encourages over-lending and over-borrowing. An economy which drives us relentlessly into debt. But the poorest, those with very little income to depend on, are not just in the grip of this economy. They are enslaved by it. They live in bondage to their creditors.

As this crisis has deepened, so poor indebted countries are increasingly transferring their tiny wealth to rich countries. They do this by paying interest, and then compound interest, on loans they have sometimes repaid several times over. They do this by using money given for aid and development to pay off debts. For every $1 that rich countries send to developing countries, $11 comes straight back in the form of repayment on debts owed to the richest countries. So wealth is trickling up from the South to the North. Countries of the South find themselves giving away, virtually free, their precious commodities, like coffee, copper, tea and sugar. This is trickle-up, not trickle-down. This is a form of economics that denies us our humanity, rich and poor alike.

We are debating this issue today because trickle-up is not working. Because enslaving the poor through debt is unjust. Because each day the poorest countries transfer $717 million, to the richest creditor countries. Because each year Africa transfer $12.5 billion to Western creditors.

Later the bishops were addressed by the President of the World Bank, James Wolfensohn, who was visibly upset by the 20-minute video shown just before his speech. This had been made by Christian Aid, the highly respected interdenominational British charity, and contains numerous criticisms of the World Bank and the International Monetary Fund, both from aid workers and from people living in countries receiving aid. He felt it was wrong to blame the Bank for most of the problems, since it handles less than 9% of the total debt, and most of it is held by individual governments. He pleaded with the bishops for co-operation rather than confrontation.

Wolfensohn's speech has been transcribed as an ACNS press release which you can read here.

I agree with the film on one thing, that there is a significant and overwhelming debt burden for many countries. I agree that if there was less debt we'd all be able to do much better in terms of poverty alleviation. I agree that if we were to alleviate debt there is a chance-a chance-that that money would go to education and health and the improvement of the lives of people.

I say "a chance," ladies and gentlemen, because it is a chance. I want to step back for two minutes and tell you what I do every day. What I think about every day. An organisation which is 54 years old, which is owned by 180 countries and which gets money from borrowing in the marketplace because the governments do not fund us more than the 20 million in equity that we have. Or the IDA funding which we give annually to poor countries, six billion a year, which we manage to get from those governments with enormous difficulty. Why do we get it from donor governments? Well, some governments give it voluntarily. Not all governments give it voluntarily.

And I spend an enormous amount of my time trying to convince governments that their responsibility to the poor of the world is not just to responsibility for charity, is not just a moral responsibility, but it is a responsibility to themselves in terms of interdependence with a world which has 4.7 billion people in development out of the total of 5.6 billion.

And I have troubles. I have troubles in the United States with Congress and I have troubles locally because you may or may not know that the level of overseas development assistance from those very governments in the last seven years has gone from 60 billion to 45 billion. That is not the World Bank. That is not the Monetary Fund. That is you. That is the people who are your parishioners and the governments you elect.

They are not giving the money for either debt relief or for overseas development assistance at the rate that it should be done, and people like me and in many cases people like you are giving pressure to the governments and should continue to give pressure to governments because they are the source of this fund.

He concluded:

The more positive thing that I would suggest as I conclude is that instead of fighting each other and leveling accusations, we focus on the kids that are dying, and on the children who are not being educated and on the horrors of poverty together.

Together we can do a lot. We have expertise. You have expertise. We know a lot about development. You know a lot about people and communities. You have the best distribution system of any NGO [non-governmental organization] in the world. You are out there in the field with your flocks, you and other religions. And we can both service the poor better together and we can influence governments better together and I believe we can make a real possibility that our children will have a better chance of living in peace and prosperity if we work together. That is the reason I flew over.

And I very much hope that in the subsequent discussions that you have on this subject you will recognise that I believe in God, secondly that I care and thirdly that our objectives are the same. Thank you.

The conference press office published an audio transcript of Wolfensohn's remarks, as well as the full text of the archbishop's speech within less than 24 hours (which is interesting in itself) and this shows him to be feeling threatened and on the defensive all the way through. The Director of Christian Aid said that he was flattered to be taken seriously, and that the video shows that what the Bank and IMF are doing is just not enough. Broadly, debt charges are eleven times the amount of aid being given.

The Archbishop of Canterbury said it would be wrong to aim "arrows of denunciation" at the creditor nations, the World Bank or the International Monetary Fund, but described the debts of developing countries as a "moral problem of enormous proportions" and urged the bishops to make politicians see the evil of debt. "The depths of suffering which we continue to see in many parts of that great continent (Africa) go far beyond what is tolerable in a civilised world. The churches have a key role in creating the climate for change." He is to chair a session of bishops on international debt at Lambeth Palace in London next Tuesday to be addressed by the British Chancellor of the Exchequer, Gordon Brown, whose name was unknown to the Anglican Communion Office only two weeks ago.

Copyright © 1998 Society of Archbishop Justus.
[Contents page] [Anglicans Online] [Comments to web page maintainers]