At the end of the seventies many petroleum producing countries had a large amount of extra money. Western banks directly benefited from these gains. These banks loaned large sums of money to Third World countries for big development projects. Several factors (a rise in world interest rates, a global recession, and low commodity prices) caused these debts to accumulate to alarming amounts, in a short time. This meant that several countries could not keep up with their payments. These countries, in 1994, had a collective debt of just under two trillion dollars ($2 000 000 000 000).
It is true that Third World countries are not the only countries facing a debt crisis. For example, the United States government is the world’s largest debtor with a $4.3 trillion debt. Each new American baby owes $14 813 of this debt. But the developed countries can better afford this burden, and still get by fairly well while these debts are being paid off. Though the debt of the Philippines is less than that of the USA, 60% of the population lives in poverty.
Sub–Saharan Africa pays $10 billion every year in debt service. This is four times as much than is spent on basic health care and education programs in these countries. As a result disease and poverty is widespread and nothing is being done to stop it. Children are not being schooled, and therefor the literacy rates of these countries rapidly decrease. Without educated people in the country, development prospects are grim, and there is even less of a chance to pay off the debt.
Corruption is a large factor of the debt problem, which would go against the idea of slavery as it occurred within the country’s own borders. There was an estimated $25 billion dollars lost to corruption in Brazil, and $10 billion in the Philippines. But one might ask, “what do the developing countries really owe the developed world?” these countries have already repaid their loans many times over in interest payments. If this interest keeps accumulating the way it is, the third world will be enslaved by their debt, never able to repay it all.
The people of the Third World, especially the poor, are giving more to us in the first world than is ever given to them. Although many organizations, and even countries themselves, are sending aid money to these heavily indebted countries, since the 1970’s, net capital flows have been going from South to North. That is including every single little bit or foreign aid. The poorest of the poor bear the brunt of this debt. According to the World Bank’s 1988 report, 27% of the income of poor Filipino families was collected by the government and only 18% from the high-income families. This debt is being paid not by the people who borrowed the money, but is being paid on the backs of the poor.
The IMF’s mission, as “global debt policemen”, is to ensure that countries pay back their debt. To ensure this they implement “stabilization” and “structural adjustment” programs. These programs tell countries to cut their budget and increase exports, even if this means destruction of their environment or exploitation of their people. The heaviest burden of structural adjustment falls on the poor. Money which would otherwise be used for immunizations and medicine to fend off preventable disease, promote clean living areas, proper nutrition, or education, is taken away from these social service programs in order to help pay off the debt. The poor suffer from these remedies prescribed by the IMF.
The developed nations of this world project themselves as humane, caring nations. The way they treat these indebted countries is anything but humane. This situation is impractical as well as inhumane. The developed world knows that these countries don’t have the means to pay them back, no matter how hard they try or how impoverished they make themselves. Northern societies have the Third World cornered into slavery, not through conquering, but through blackmail. These countries have been respectively “bought and sold” as they borrow money from new sources in order to pay another source back. This new slave trading process is no more humane than the slavery of the Israelites in Egypt.
Debt compromises the economies of whole peoples and hinders their social progress. We can no longer tolerate a world in which there live side by side the enormously rich and the tragically poor. This contrast is an affront to the dignity of the human person. The biblical year of jubilee (Leviticus 25) provides that every 50 years all slaves are freed and the land redistributed. Our banks and other lending institutions have brought these people into enslavement, and justice demands that we let these people go.
