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Africa: Kenyan Bishops on Debt Cancellation
AfricaFocus Bulletin
May 25, 2005 (050525)
(Reposted from sources cited below)
Editor's Note
"The efforts at debt cancellation that were made till now could be
compared to the scraps that Lazarus hoped he could feed on at the
rich man's table: they are illusory promises without real
substances. ...Giving to others scraps rather than what they
deserve means basically treating them in a sub-human way, not as
human beings!" - Catholic Bishops of Kenya, Pastoral Letter, May
17, 2005
This AfricaFocus Bulletin contains the full text of this pastoral
letter just released by the 29 Catholic bishops of Kenya, another
expression of the demand for rich countries to act now for full
cancellation of debts of African and other developing countries.
Despite new recognition in statements by rich countries of the need
for cancellation of debts, it is still unclear how much new action,
if any, will emerge from the G8 summit in Edinburgh this July.
To send a message to rich country finance ministers calling for
debt cancellation, visit
http://www.jubileedebtcampaign.org.uk
To send messages calling for debt cancellation to President Bush
and U.S. Treasury Secretary Snow, visit
http://www.afsc.org/africa-debt
http://www.jubileeusa.org or
http://www.africaaction.org
For previous AfricaFocus Bulletins with background on Africa's
debt, visit http://www.africafocus.org/debtexp.php
++++++++++++++++++++++end editor's note+++++++++++++++++++++++
On the Burden of International Debt
A Pastoral Letter of The Catholic Bishops of Kenya
May 17, 2005
[Source:
http://www.fides.org/eng/vita_chiesa/vescovi_kenya230505.html]
"Do not charge interest on a loan but fear your god and let your
brethren live with you" (Lev 25:36)
1. Introduction
We, the Catholic Bishops of Kenya, wish to share our concern with
the Christians and all the people of good will in our land. In
the next months, many international happenings are scheduled
around the world. These meetings will deal with important matters
regarding our country, our continent - Africa - and all the
developing countries in the world. In July, the most powerful
countries, the so-called G8, will meet in Edinburgh, Great
Britain, and they will discuss the status of the international
debt and programs to reduce poverty in the South of the world. In
September, the United Nations (UN) will organize the Millennium
Assembly to discuss how to implement programs that will enable
humanity to attain the Millennium Goals, among them, the
reduction of global poverty and the development of a just world.
Next December, the World Trade Organization (WTO) will convene in
Hong Kong for a new round of talks, to decide on important
regulation regarding international trade. We cannot forget that
earlier this year the World Social Forum met in Brazil and that
trade ministers from around the world met here in Kenya, in
Mombasa, last March, to prepare the WTO meeting of next December.
Thus our country is not only interested in these happenings.
Kenya is part and parcel of the process that could lead to a
better world. We would like to share with you a few reflections
on the role each one can play to alleviate poverty and build a
just society.
2. Origin of International Debt
Before looking at our present situation, we need to go back in
time and understand why and how Kenya, like many other African
countries, is deeply indebted to the rich countries in the world.
At the end of World War II, the United States of America devised
the Marshall Plan. This plan foresaw donations and long-term
loans to European countries to finances their reconstruction and
enable them to modernise their industry. The Europeans were able
to make good use of these incentives and, in a short time, they
became the privileged trading partners of the United States. The
latter, afraid that the financial surplus thus created could lead
to inflation, encouraged investment in American companies abroad.
By the early 1960s, European banks were flooded with American
dollars. At the same time, most African countries were attaining
their independence and needed funding to allow their economies to
grow and improve infrastructure. International banks started to
lend money at very low rates. Later, soon after the energy crisis
of 1973, governments of Northern countries, faced with recession
and mass unemployment at home, decided to endow States in the
South with credit power regulated by bilateral agreements. In
other words, a country in the rich North would allow a country in
the South to buy goods and services from their industry and pay
later on. In this way, employment and production were given a
lease of life in exchange of later payment from third countries.
Loans provided by the World Bank to finance development projects
are a third source of debt. Most of these loans were underwritten
in the 1960s; they still weigh heavily on the economies of the
South of the world.
3. Africa: a Continent in Debt
Today, all developing countries in the World - Kenya included - have
huge debts to repay. They owe money to private companies,
usually international banks, to Governments, and to international
institutions like the World Bank and International Monetary Fund.
By the end of 2004, external debt of Sub-Saharan countries stood
at US$ 231 billion. At the same time, the Gross Domestic Product
of these countries was just about US$350 billion. In other words,
African countries cannot pay back their debts and sustain
development. Most countries have to spend more than twenty
percent of their revenues to service the debt, i.e., to pay
annual quotas of debt and the interests generated so far. The
debt has helped the recovery and growth of rich countries, but
denied the development of poor countries.
This situation goes hand in hand with other causes of stagnation
and poverty. The G8 countries (Canada, France, Germany, Italy,
Japan Russian, United Kingdom, and the United States of America)
keep asking the South to be opened to free trade. They ask this
while, at home, they heavily subsidize their industrial and
agricultural sectors. How can Africa farmers compete with rich
farmers in the North who receive government support and are so
able to sell their produce under cost? There are also local
causes to the growing unbalance in world development and poverty.
In the past, funding provided by aid and loans was often skimmed
by corrupt officials, misused in wrong investments, or directed
to purposes different that those for what they were provided.
Corruption on the part of our government officials and the lack
of good governance are as much responsible of today's poverty as
external causes. We cannot denounces the evil of foreign debt
without accepting our responsibility for the growth of poverty
among us.
4. God Speaks to Us
In our attempt to understand and present in its proper light the
issue of debt cancellation we need to turn to the Word of God. We
would like to focus the attention of all on the parable of the
rich man and Lazarus, found in the Gospel of Luke (16:19-31). The
rich man can easily be seen as representing the North, while poor
Lazarus the underdeveloped South. The rich man ignores Lazarus'
plight. For this attitude of his, his name has not been recorded
while all know the name of the poor man: Lazarus. Ignoring the
situation of other people, or worse, not caring about what our
actions may cause in other people's lives, leads to loss of true
human identity: our names will not be remembered. The efforts at
debt cancellation that were made till now could be compared to
the scraps that Lazarus hoped he could feed on at the rich man's
table: they are illusory promises without real substances.
Lazarus still died of hunger and disease! Besides, eating scraps
of food that fall from a table is not in line with the dignity of
human beings: it is fitting for pets! Giving to others scraps
rather than what they deserve means basically treating them in a
sub-human way, not as human beings!
The Word of God speaks frequently debt and cancellation of debt.
In the book of Leviticus, God calls on the people to forgive all
debts every fifty years. It is the jubilee of the Lord (Lv
25:1-22; see also Dt 15:1-2). Even when asking for collateral,
one must not oppress the poor "No one shall take a hand mill or
even its upper stone as a pledge for debt, for he would be taking
the debtor's sustenance as a pledge" (Dt 24:6) As those
responsible for the teaching office in the Church, we have the
duty to alert all that the time to work on justice and equality
issues is right now, in this life. In the fullness of he Kingdom
of God, the roles of power will be reversed: the oppressed will
rejoice and the oppressors will suffer. Far from being an
invitation to passive acquiescence to the status quo, these
remarks remind all that waiting for the future life to make
amends will be too late. The right time is now. The Scriptures
and the Christian way of life are so clear that all believers
should be able to adhere to them. Those who choose otherwise are
excluded from the communion and the joy of all God's children:
not even something of an extraordinary nature would make them
back to their senses.
Like some other parables, the one regarding the rich man and
Lazarus is not finished: what will happen in the end, what kind
of stand will be taken depends on each individual. Opening one's
eyes on the poor man's plight is possible for all generations and
so it is for the present one. The invitation that we launch to
all is clear: let us learn to listen and see! In this situation
we would like to echo the words of the Holy Father in his
Post-Synodal Apostolic Exhortation Ecclesia in Africa. The role
of the Church is that of the Good Samaritan not only for the
peoples and nations of Africa (EA 41), but also for those
belonging to the affluent North on this particular issue. Being
warned about the unwillingness to cancel unjust debts means to be
given a chance not to end up like the rich man of the parable,
who opened his eyes all too late. At the same time, we convinced
and we desire to proclaim once more that God's mercy is for all,
since he has written our names on the palms of his hands (cf.
Is49:15-16; EA 143). As God's children we are all invited
together to solve the problems of this earth, without
discriminating between rich and poor, but making sure that all
move together in the same direction.
5. Kenya: Struggling for Change
It is our responsibility as shepherds to realize and help our
flocks to understand that the external debt is evil. However the
Kenyan debt was contracted, today it is the cause of oppression,
of poverty, we dare say of neo-modern slavery. Kenya has been the
recipient of a cumulative total of 17 billion US$ in loans and
aid; this equals to 1,275 billion shillings, or an average of
40,000 Kenya shillings per each citizen. In spite of his huge
amount of money, Kenya has witnessed a progressive decline of its
economy. Today, the vast majority of Kenyans live below the
poverty line, while a small minority enjoys a life style higher
than that of developed countries. Debt servicing is hampering our
struggle for development and social justice. We should remember
that the official poverty line is placed at earning less than US$
1 per day per person. We all know that this limit is in itself a
masquerade. No person can be expected to live with less than 80
[Kenya] shillings per day, especially in our urban areas where
the cost of life is no lower than that of many European or North
American countries. To pay people according to the salary
structures applying to most of our workers is tantamount to
exploit their work in the pretence of legality.
We should also underline that much of the aid we receive from
donor countries is not a donation toward development. More often
than not, it is a loan that must be repaid and adds up to the
already huge debt our country has towards the rich nations of the
North. In his message for the World Day of Peace 2005, His
Holiness John Paul II told us that, "The tragedy of poverty
remains closely linked to the issues of the foreign debt of poor
countries. Poor countries remain trapped in a vicious circle: low
income and weak growth limit savings and, in turn, weak
investments and an inefficient use of savings do not favour
growth". "This need is clearly seen when we consider the many
difficult problems standing in the way of development in Africa:
numerous armed conflicts, pandemic diseases aggravated by extreme
poverty, and political instability leading to widespread
insecurity. These are tragic situations which call for a
radically new direction for Africa: there is a need to create new
forms of solidarity, at bilateral and multilateral levels,
through a more decisive commitment on the part of all, with
complete conviction that the well-being of the people of Africa
is an indispensable condition for the attainment of the universal
common good". (Message for the World Day of Peace 2005, #8 and
10)
6. Is it Just to Call for Debt Cancellation?
Debt becomes an ethical issue when it poses a major obstacle to
the full enjoyment of human rights. In as far as debt servicing
reduces people to poverty while its creditors determine Kenya's
political, economic and social destiny, then debt is essentially
a human rights issue and a moral concern for a Christian. We have
to ask ourselves: why should the poor in our country, who have
nothing to say about accruing the debt and have received little
or no benefit from it, have to bear the greater burden of its
payment? The grand total of Kenya's public debt is, in our view,
unsustainable in as far as the country is left with insufficient
funds to meet its human rights obligations, especially in
relation to the Millennium Development Goals. We reject the
narrow criteria used in the international Monetary Fund Debt
Sustainability Analysis Framework. This approach only compares
external debt to exports and does not seem to include domestic
debt as part of a country's financial predicament. Yet, Kenya's
internal debt is considerable - accounting for 45 per cent of the
country's total outstanding debt - and it is foreign
debt-related: we interpret it as our government' attempt to cover
the gap in its balance of payments created by foreign debt
servicing.
Poor management of the resources and especially those related to
the public debt has been accompanied with chronic corruption in
our country. In 1999, we analysed what we then termed: 'the
paradox of Kenya's unrealised economic potential'. (Kenyan
Bishops, 1999 'The Economy of Kenya' in AMECEA Documentation
Service, ADS 11-12/1999 No. 502, 1st July 1999 Nairobi: AMECEA).
We persistently continue to call on our governments to establish
democratic structures and just policies in order to deal with
famine, wages, working conditions, exploitation, conflict and
insecurity. We remind our political leaders in particular that to
deny Kenyans a new constitution indirectly amounts to denying
their fellow-citizens their right to life. As far as Kenya's debt
is concerned, it is estimated that 90 per cent of all the items
included in the Public Debt Hedge Book could be illegitimate,
odious and fraudulent (Obonyo, R.O., 2005 The Cripping Debt
Burden, Research on Kenya's Current Debt Situation, Paper
Presented by Pro. Obonyo - University of Nairobi to the Kenya
Debt Relief Network -KENDREN, Unpublished.) If odious, a country
is not obliged to pay the debt under international law). If true,
Kenya is not obliged to pay this kind of debt under international
law.
At the same time, we reject the notion that the poor economy is
solely the result of poor governance and rent-seeking. Even if
all Kenyans were hardworking people, living together peacefully
and governed by virtuous leaders, they would still be poor
because of debt service payments. We believe Hon David Mwiraria,
Minister for Finance, when he stated in his budget speech
2003/2004 that the debt service continued to squeeze essential
expenditures out of the budget. Debt servicing was Kenya's single
largest budgetary item in the budget 2003/2004 accounting for 32
per cent of the entire budget -more than the country spent on
education and health combined. This kind of debt is a matter of
contractual or commutative justice: a legally enforceable
contract is not necessarily a morally just one. To be just an
agreement must also ensure social cohesion, peacefully
co-existence between nations, and their common development
(Pontifical Council "Cor Unum", 1999 World Hunger a challenge for
all: Development and Solidarity, #26). Whereas austerity measures
geared towards debt servicing put the heaviest human cost on our
poor and failed to turn Kenya into a paradise, banks in
high-income countries have seen their outstanding Third World
loans drop. For them the IMF did a good job. These banks have
further taken adequate measures to absorb losses that might
result form default on the part of any single large debtor. Here
we say that the burden of the debt crisis must be shared by all.
Commercial banks, though not Kenya's main creditors, can no
longer be permitted to pass on their losses to Kenya taxpayers.
Visible damage has already been done. Together with all the
bishops of Africa and Madagascar we see a clear link between the
HIV/AIDS pandemic and poverty (Symposium of Episcopal Conference
of Africa and Madagascar -SECAM, 2003, The Church in Africa in
Face of the HIV/AIDS Pandemic, 'Our Prayer is Always Full of
Hope", Message issued by SECAM, 7th October 2003, Dakar). It is
also no coincidence to hear the Holy Father speak about the
Africa debt on a World Day of Peace. Obviously, this vicious
circle of debt, poverty, disease and conflict in Africa needs to
be broken. We applaud the willingness of the International
Financial Institutions and some G8 countries to take new measures
to cancel Africa's debt erodes the international common good. On
the other hand, we realise that the cancellation of debts will
not transform by itself the historical/factorial/structural
inequalities between the nations of the world. The outcome of a
sports contest between a world-champion and a beginner is
predictable even if the rules of the game are fair and equally
applied. The failure to bring about international social justice
is not just a technical or political mistake; it is a failure of
solidarity (John Paul II, On Social Concern -Sollicitudo Rei
Socialis -Washington, D.C: United States Catholic Conference,
1986, no. 23). Moreover, mechanism should be put in place to
monitor our governance's spending and encourage accountability
and transparency. We will also have to work towards a clear
shared vision on development in our country.
7. What We Want to See Happening
We expect the Governments of creditor countries to implement the
total cancellation of the debt owed by Kenya, relax restrictive
monetary policies and encourage imports from the developing
world; when pursuing macroeconomic strategies to keep in mind
that the ability to repay debts and attract private investor
capital is co-determined by the level of global and domestic
interest rates;
We remind the industrialised countries of their promise to spend
0.7 per cent of their GDP on Official Development Aid;
We expect the international Financial Institutions to provide
sufficient financial liquidity and policy flexibility so that
Kenya can make the necessary adjustments without further
sacrificing growth and equity;
We expect commercial banks, in the high-income countries to apply
principles that protect basic human rights in the least developed
countries;
We expect the National and International Banks to favour the poor
and be pro-development in their business transactions, not just
profit oriented;
We encourage the Government of Kenya to cooperate with interested
parties toward the cancellation of its external public debt;
We expect the Government of Kenya to provide leadership and let
out nation's standing in the world be based upon transparency,
accountability and genuine concern for the poorest; 'lack of
capacity' can be no excuse for a government's allowing others to
determine the destiny of our nation;
We request the government to do whatever is possible and
drastically reduce the domestic debt. We call on the people of
Kenya to ensure that proper monitoring will be in place and
facilitate a transparent use of development funds.
We demand that all those people, most so the Kenya citizens who
have siphoned some government funds and are now hiding them is
some personal accounts abroad to return it back with apologies to
the nation.
We call on all people of goodwill to help restructure the entire
international trading and financial system. We ask them in
particular to help create a fair and transparent arbitration
process framework.
After doing all what is humanly possible, we must turn in trust
to our Lord and Saviour to bless Kenya and its peoples.
Signed by all catholic Bishops of Kenya:
- Rt. Rev Cornelius Arap Korir - Bishop of Eldoret/Chairman,
Kenya Episcopal Conference
- Rt Rev Peter Kairo - Bishop of Nakuru/Vice Chairman, Kenya
Episcopal Conference
- Most Rev. R.S Ndingi Mwana a Nzeki - Archbishop of Nairobi
- Most Rev John Njenga - Archbishop of Mombasa
- Most Rev Zacchaes Okoth - Archbishop of Kisumu
- Most Rev Nicodemus Kirima - Archbishop of Nyeri
- Most Rev John Njue - Coadjutor Archbishop of Nyeri
- Rt. Rev Philip Sulumeti - Bishop of Kakamega
- Rt. Rev. Ambrose Ravasi - Bishop of Marsabit
- Rt. Rev Paul Darmanin - Bishop of Garissa
- Rt Rev. Joseph Mairura Okemwa - Bishop of Kisii
- Rt Rev. Boniface Lele - Bishop of Kitui
- Rt Rev. Philip Anyolo - Bishop of Homa Bay
- Rt Rev. Luigi Locati - Bishop of Isiolo Vicariate
- Rt Rev. Alfred Rotich - Bishop of Military Ordinariate
- Rt Rev. Maurice Crowley - Bishop of Kitale
- Rt Rev. Norman King'oo Wambua - Bishop of Bungoma
- Rt Rev. Peter Kihara Kariuki, IMC - Bishop of Murang'a
- Rt Rev. David Kamau Ng'ang'a - Auxiliary Bishop of Nairobi
- Rt Rev. Anthony Mukobo, IMC - Auxiliary Bishop of Nairobi
- Rt Rev. Patrick Harrington - Bishop of Lodwar
- Rt Rev. Francis Baldacchino - Bishop of Malindi
- Rt Rev. Virgilio Pante IMC - Bishop of Maralal
- Rt Rev. Salesius Mugambi - Bishop of Meru
- Rt Rev. Cornelius Schilder - Bishop of Ngong
- Rt Rev. Luigi Paiaro - Bishop of Nyahururu
- Rt Rev. Emmanuel Okombo - Bishop of Kericho
- Rt Rev. Martin Kivuva Musonde - Bishop of Machakos
- Rt Rev. Anthony Muheria - Bishop of Embu
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with a particular focus on U.S. and international policies.
AfricaFocus Bulletin is edited by William Minter.
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