Latin American Report


Clinton's Offer to Cancel Debt

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25 June1999

Rich Countries Forgive Some Debts

On June 18 the Group of Eight (G8) -- the seven richest industrialized countries (Canada, France, Germany, Great Britain, Italy, Japan and the US) plus Russia -- agreed on a plan for forgiving some 40% of the debts of 36 to 41 of the world's poorest countries if they agree to implement a series of neoliberal economic measures. The largest number of beneficiaries would be in Africa, but four Latin American nations are affected: Bolivia, Nicaragua, Honduras and Guyana. The decision, which US president Bill Clinton called an "historic step," was taken on the first day of the annual World Economic Summit, held from June 18 to June 21 this year in Cologne, Germany.

The plan would cancel a total of about $70 billion of the $201-230 billion owed by the poorest countries, about 8% of the debt of the 160 developing nations, or 1-2% of the total "Third World" debt. Some of the poorest nations are allocating as much as 60% of their gross domestic product (GDP) to debt repayment. German chancellor (prime minister) Gerhard Schroeder explained: "It's not a question of money that could be recovered. This is about longterm credits, loaned a long time ago to countries so poor that the whole world knows they'll never have the money to pay."

On June 17, a day before the G8 meeting began, a session of the International Labor Organization (ILO) in Geneva adopted a treaty against compulsory child labor. The treaty, passed unanimously by the 174 member countries, was backed by the richest nations; The ILO estimates that 50-60 million children work in dangerous conditions in developing nations.

Critics of neoliberal policies indicated that the G8 debt forgiveness plan and the ILO treaty against child labor were half-measures meant to weaken grassroots movements against sweatshops and demands for a broader debt-relief program. Oxfam, a non-governmental relief agency, noted that the $70 billion figure is inflated, since it includes $25 billion the G8 nations had previously agreed to write off.

In the US, critics focused on the Clinton administration's efforts to revive "free trade" bills it was pushing in March before the 10-week US-led bombing campaign against Yugoslavia. Clinton announced the US commitment to the child labor treaty on June 12 in a speech to graduating University of Chicago students. He used the same speech to renew a call for "fast track" authority to negotiate international trade agreements without congressional interference.

On June 10 the US House Ways & Means Committee was planning to move two free-trade bills forward towards a vote: the Africa Growth & Opportunity Act (AGOA, aka "NAFTA for Africa") and the Caribbean Basin Initiative (CBI) parity bill. The DC-based 50 Years Is Enough Network described the process as "sneaking through another free-trade, neoliberal bill."

Hundreds of demonstrators took to the streets of Geneva on June 15 to protest the arrival of Clinton to address the ILO the next day. The Inter-Continental Caravan for Solidarity and Resistance was initiated by grassroots farmers' groups in India but includes representatives of the Landless Rural Workers Movement (MST) of Brazil, the Zapatista National Liberation Army (EZLN) of Mexico, Chilean indigenous groups and the Afro-American Network, among others. The caravan arrived in Europe on May 22 and has been taking part in demonstrations and meeting with European grassroots organizations.

Demonstrators marked the opening of the G8 summit in Cologne on June 18 by marching through the city with a "golden cow" decorated with the US and German flags. The next day, the Jubilee 2000 Campaign presented two truckloads of petitions calling for full debt forgiveness, signed by 17,099,748 people from around the world. Honduran archbishop Oscar Rodriguez and rock singer Bono of the Irish group U2 symbolically presented them to Schroeder. At the same time, 35,000 people chanting "Forgive the debt" formed a human chain around the Ludwig Museum, where the G8 was meeting. The Inter-Continental Caravan participated "critically" in the human chain; the caravan's position on debt forgiveness does not "accept any relation between the peoples of the South and those debts, and calls for disobedience and disrespect towards those responsible: multilateral financial institutions, Northern banks and corrupt governments (most of which are controlled by Western powers)."

Other protests against the G8 meeting took place on June 18, many of them organized by Reclaim the Streets (RTS), a loose international network opposing restrictions on public spaces. In London up to 10,000 demonstrators joined in a "Carnival Against Capitalism" in the financial district, mingling cheerfully with bankers and stockbrokers. Later a few hundred protesters battled with police agents, shut down the London International Financial Futures and Options Exchange and smashed windows with scaffolding poles. Fifteen people were arrested and at least 38 people required medical treatment. [Financial Times 6/19/99; Reuters 6/18/99]

More than 100 activists joined in Boston's Carnival Against Capital, passing out thousands of fliers in the city's financial district while a street theater troupe enacted a debate between a Mexican rebel and representatives of the newly merged "FleeceBoston" bank. [Boston Encuentro report 6/18/99] In New York, hundreds of protesters halted traffic briefly as they unsuccessfully tried to hold a street party on Wall Street; more than 20 were arrested. At least 450 protesters marched through San Francisco's financial district without incident. "We are here to throw some sunshine on these [corporate] institutions," said Juliette Beck of Global Exchange, a San Francisco-based human rights group. "They are like Draculas. Bring them out to the sunlight and they will wither away."[Reuters 6/18/99]

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