ISGN > Publications > JUBILEE, DEBT AND THE IMF

Bangkok Thailand - Feb. 11, 2000

Lessons from the First Year and Challenges for the Jubilee Debt Campaign
John Dillon Canadian Ecumenical Jubilee Initiative

The Jubilee debt petition campaign was a popular mobilization success without a commensurate policy response from G7 governments or the IMF and the World Bank. Let's never lose site of the successful part - 17 million signatures worldwide re-established debt bondage as an international issue at a time when most debtor governments had resigned themselves to continue making payment after payment on debts that can never be paid off. This level of popular mobilization and awareness building is a basis for achieving a great deal more.

We in the Canadian Jubilee campaign take the position that the agenda for future Jubilee debt campaigning must be worked out in dialogue with Jubilee South. We agree with our partners in Jubilee South who say "There can be no effective redressing of North South relations or effective debt action if the people of the South are not directly involved."

The G7's Köln Debt Initiative is totally inadequate. In Köln we called it a "lost opportunity". We need to remember that the HIPC Initiative was a creditors' initiative - it came from creditors who knew they could never collect about half of low-income countries' debts. Most of the debts to be written off are not being serviced in any case. The latest (Dec. 7, 1999) IMF estimates of the total amount of debt reduction for 32 HIPCs amounts to US28.2 billion in Net Present Value terms which implies nominal debt reduction of around US$50 billion

Since half of that was already eligible for write-off under Pre-Köln HIPC terms, the net amount of new debt relief added by Köln Debt Initiative is only about US$25 billion in nominal terms. Another US$20 billion in bilateral Official Development Assistance loans owed to the G7 and perhaps another US$20 billion in nominal ODA owed to other creditors may be added to this amount.

Eric Toussaint correctly describes the Köln terms as offering "a drop of reduction in an ocean of debts" since the new debt reduction only amounts to at most 2.6% of developing country debt.

Although the quantity of debt reduction was paltry, in the view of the Canadian Ecumenical Jubilee Initiative the most important shortcoming of Köln Debt Initiative is its failure to end Structural Adjustment conditionality which I shall discuss below. How do we account for our failure to make more progress at Köln?

The vague wording of the Jubilee petition was both a strength and a weakness of the campaign. On the one hand it made the campaign adaptable to different national settings but at the same time it was eminently co-optable.

How to define "poorest countries"? "unpayable debts"? Different national campaigns had different definitions. Our understanding of "unpayable" evolved.

In Canada, we took it to mean all of the debt of 50 plus low-income countries and a portion of the debt of middle income countries. We said that for low-income countries no level of debt is sustainable, and that in the spirit of Jubilee, all of that debt should be cancelled to achieve a genuine fresh start.

Other Northern campaigns took different perspectives reflecting positions which took into account historical precedents and/or human development indicators.

As the campaign grew into an international movement, diverse perspectives, contexts and experiences, particularly from Southern campaigns, led to an evolving understanding of the debt cancellation call. At the first international meeting of the Jubilee movement held in Rome in November of 1998, participants struggled with the word "unpayable" seeking interpretations that reflected this diversity. "The Jubilee Call for Debt Cancellation" issued in Rome linked four kinds of debt to this malleable word:

In Canada we encourage our constituency to see the debt in moral terms -
exploring themes of social and ecological debts that raise the question of "Who owes Whom?" We present debt cancellation as an act of justice, of atonement for past injustice not of charity. Our education strategy is to deepen awareness and commitment rather than seek the broadest number of signatures. Therefore we always ask people to do more - sign a petition; then write a postcard; then write a letter; then make a pledge to take action in one's local community; then meet with a Member of Parliament etc.

We're currently in the process of designing the second phase of our campaign and see this forum as an opportunity for dialogue on how we should shape that campaign.

We in Canada came late to the Jubilee campaign after it was already launched in the UK. The UK petition was already circulating in Canada when we held our first meeting. We were critical of the narrow focus of the UK petition - for debt remission for low-income countries only and its lack of specific criticism of Structural Adjustment Programs (SAPs).

We tried to strike a balance - wording our own petition language sufficiently close to that of the UK so that it would be seen as the same campaign and going farther by campaigning against structural adjustment conditionality. From the beginning we committed ourselves to a second phase of campaigning which would address middle-income country debt. That is to say we agreed to sequencing.

In retrospect we see that we should have been bolder - limiting our demand for debt remission to 50 countries identified as "the poorest" enabled the Canadian government to get off too easy. Their tactic was to try to look good by being the first country to offer 100% bilateral debt remission - but they only extended this offer to least developed countries (lldc's). Only 11 of the countries on our list of 50 were least developed countries with outstanding debts owed to Canada and these were relatively small. The total bilateral debt owed to Canada by these 11 lldc's [C$261 million] was about the same as the amount owed to Canada by Côte d'Ivoire [C$251 million] alone and much less than that owed by Cameroon [C$440 million]. Both Côte d'Ivoire and Cameroon are HIPCs but not lldc's, and therefore not eligible for the top up beyond what the Paris Club might offer.

Currently we are asking the Canadian government to announce in the federal budget at end of February an extension of its offer of 100% bilateral write-offs to all low-income countries. We believe Canada should at least match the promises made by the USA and the UK to offer 100% bilateral debt remission to all countries that qualify under HIPC.

We made one small, symbolic gain in persuading Canada to offer debt cancellation to some low income countries that are not designated as HIPCs. This year the Canadian government wrote off a C$600,000 (US$416,000) debt owed by Bangladesh but they have yet to carry through on a promise to include Haiti, another non-HIPC in a unilateral write-off. Asked why they acted on Bangladesh and not Haiti, Canadian Finance officials said they have confidence that Bangladesh has "a good record on economic policies" but Haiti does not.

I cite this anecdote to show that conditionality based on a creditor's judgement of a country's economic policies can also be applied informally and arbitrarily by a single creditor government as well as through formal intervention by the IMF.

 

Four Challenges for the Next Stage of the Jubilee Debt Campaign

A. Conditionality - the PRGF, SAPs and "progressive conditionality"

Our Canadian campaign did put the issue of conditionality into our petition. We debated whether to use the words "Structural Adjustment Programs" in the petition itself and in the end decided that not enough Canadians would understand the phrase and so we decided to describe the effects of structural adjustment

Our Canadian petition said debt cancellation should not to be conditional on the adoption of "measures demanded by international financial institutions that erode health care, education and the environment, further impoverishing the poorest populations of the world." In our letters and discussions with Canadian government officials we have made it very clear that this phrase means that we are campaigning for an end to SAPs.

However, in retrospect we now see that we oversold the notion that SAPs invariably lead to cuts in spending on health and education without addressing other ways that SAPs cause poverty e.g. through overzealous anti-inflationary monetary policy, privatization, inappropriate rural development policies etc.

Our rhetorical emphasis on health and education left us vulnerable to the tactical shift that occurred when the G7 and the IMF began to pay more attention to the levels of social spending without modifying the essential neoliberal policy direction of SAPs. The IMF points to a review of 44 low-income countries that had SAPs during 1994-98 which "indicates that about 80 percent of the programs sought increases in public spending on education and health care."

The official G7 Köln Debt Initiative calls for "a framework for poverty reduction" to be "integrated with structural adjustment programs". This ambiguous language implies that poverty reduction can somehow be grafted onto SAPs.

We say that attempting to graft poverty reduction branches onto the noxious tree of Structural Adjustment Programs is contrary to the Jubilee movement's call for liberation from debt bondage. In fact, the new foliage seems designed to obscure the fundamental problems that extend down into the roots of SAP conditionality.

The next stage of our campaign must reject all conditions as undemocratic violations of sovereignty. We see ourselves as marching forward in step with the Jubilee South Summit which "rejected all policies derived from the ... neo-liberal paradigm. Delegates demanded an end to Structural Adjustment Programs, at the centre of neo-liberal imposition and co-optation, and all new versions of SAPs including those encompassed in the ... IMF Poverty Reduction Facility, as well as the notion of external conditionality in all of its dimensions or forms."

Jubilee South's explicit rejection of all forms of external conditionality challenges us to stand with them in demanding an end to SAPs and not just their modification.

The challenge for us in Canada is to explain to our constituency why the Poverty Reduction and Growth Facility's (PRGF) adoption of new language concerning poverty reduction cannot deliver liberation from debt bondage. We begin this task by showing that the PRGF does not constitute a new paradigm.

We are endeavouring to educate our constitutency concerning how SAPs serve private capital. SAPs assist transnational corporations, to trade, invest and move capital around the globe with a minimum amount of government interference. Indeed, from their very beginning this role for SAPs was applauded by the largest US banks. In the mid-eighties when US Treasury Secretary James Baker launched his plan for containing the debt crisis, Morgan Guarantee Trust, welcomed the Baker Plan saying that SAPs promised the "liberation of the private sector from distorting price, wage, trade, exchange and credit controls."

The PRGF must be seen in the context of efforts by the international financial institutions to maintain and enhance their power. Recall how the IMF wanted to use some of the proceeds from the revaluation of its gold stocks to fund the PRGF as a self-sustaining facility without having to return periodically to "donor" governments for replenishments. We can anticipate a public relations campaign from the Fund and the Bank to sell their agenda with attempts to co-opt our language and perhaps some NGOs in the process.

While the rhetoric of the PRGF is about poverty reduction its actual documents on operational issues tell us otherwise. In attempting to explain how the Fund and the Bank will collaborate on implementing the PRGF, the IMF reveals the wide extent of the conditionality it intends to maintain:

The Fund staff will take the lead in offering advice to the authorities in the areas of its traditional mandate and responsibility. This would include promoting prudent macroeconomic policies; structural reforms in related areas, such as exchange rate and tax policy; and issues related to fiscal management, budget execution, fiscal transparency and tax and customs administration.

The same document then adds:

The Bank staff will take the lead in advising the authorities in the design of poverty reduction strategies, ... the design of sectoral strategies, reforms that assure more efficient and responsive institutions, ... and in other structural reforms such as privatization and regulatory reform.

As if these conditions were not sufficient, the document goes on to add that the government that is nominally responsible for the Poverty Reduction Strategy Papers (PRSP) will receive advice from both the Bank and the Fund on many other areas. These include the "establishment of an environment conducive to private sector growth, trade liberalization and financial sector development."

Elsewhere the same document makes it clear that the Boards of the Bank and the Fund can veto assistance to these countries under the HIPC Initiative or other Bank or Fund programs if they are not satisfied with the policies outlined in the country's Poverty Reduction Strategy Paper.

Is this really a new direction? The words of the Netherlands Executive Director to the IMF commenting on the PRGF to NGOs are very clear: "It's not about abandoning conditionality ... The IMF still leads on macro, the World Bank on social. In reality it's not that big a departure; it's in our interests to make it seem like a big deal."

Is the World Bank really able to advise on poverty reduction?

An internal World Bank study leaked to the Financial Times found "a disconnect between Bank policy and practice." The internal study reviewed 54 structural adjustment and sectoral loans made between July 1997 and December 1998. The Bank's review concluded: "The majority of loans do not address poverty directly, the likely economic impact of proposed operations on the poor or ways to mitigate negative effects of reform."

A major problem is the incompatibility of the Bank's two roles - as a lender and as a poverty fighter. The former role too often overshadows the latter. The World Bank functions much like a private lending institution where the staff advance their careers by successfully persuading clients to take on new loans. The poverty alleviation or poverty aggravation effects of those loans don't show up until years after the money has been spent and the lending officer has moved on.

Can there be "positive conditionality"?

This issue dogged the Canadian Ecumenical Jubilee Initiative throughout the last year. The challenge we heard over and over again was usually phrased as "How can we be sure the money freed up by debt remission will be used wisely?" This brought to the fore a subtle racism - a distrust of peoples of Southern countries, especially Africans, to manage their own affairs as if corruption only occurred in the South and not among politicians and coprorate executives in Canada as well.

We felt this question had to be addressed in an open and democratic way and so we held a full day forum during which we debated whether or not what are sometimes called "positive conditions" should be attached to debt remission.

Our debate resulted in the adoption of the following policy position:

1. As a principled position, we support the call for unconditional debt cancellation. We have consistently opposed structural adjustment programs in their own right and as eligibility criteria for debt cancellation, and now extend that opposition to all creditor conditionality (even that which is referred to as positive). Exceptions to this principle are those situations in which our partners in the specific country issue a call for conditions. In other words, the primary locus for debt conditionality must be with the debtors who will make the decisions on this issue. Upon hearing from representative groupings of civil society in an affected country that debt cancellation should be withheld until a particular condition is met, we will take that same position regarding that country with our government.

2. Given the primacy of international human rights law, unconditional debt cancellation does not mean that we, or any government, are free of existing international agreements. Governments must be accountable to standards to which the international community has already agreed, whether that be civil and political rights, social economic and cultural rights, or poverty eradication targets. We support strengthening the United Nations mechanisms which strive to ensure that these commitments are upheld. We remain committed to our ongoing work as Canadian churches in these and other fora to address human rights and other humanitarian concerns.

3. We support the broadest and widest involvement of civil society of affected countries, in shaping all parts of the discussion and debate regarding debt cancellation. We support civil society in debtor countries as they engage in their efforts to hold their governments accountable.

4. We call on our government to show policy coherence, engaging in consistent relationships with other nations that are based on internationally agreed upon humanitarian standards and principles. In showing policy coherence we particularly ask the government of Canada to consider its own record of realisation of human rights, including the elimination of poverty in Canada.

Finally, in putting forward these conclusions, we identify the need for tools for ourselves and our constituency to grapple with these issues. We must be prepared to assist them and ourselves to answer complex and difficult questions. We believe the debate on this issue will be ongoing, and wish to facilitate and encourage further conversation. However, we are committed to having that discussion in the context of our goal of elimination of the scourge of debt burdening poor countries and people the globe over.

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This position is not universally held by all NGOs in Canada. There are dissenting voices who still believe that creditors should impose so-called "positive conditions" but this is the position of the Canadian Ecumenical Jubilee Initiative.

B. Middle-Income Country Debt

In the Canadian Ecumenical Jubilee Initiative we have not set quantitative targets for the reduction of middle-income country debt. Instead we have affirmed principles, saying countries should not have to pay debts contracted by repressive, undemocratic governments or debts used for nefarious purposes or debts that grew because of the compounding of interest after interest rates were unilaterally raised by northern countries in the early 1980s. We wish to develop collaboratively concrete ways of addressing these issues.

A campaign for the cancellation of middle-income country debts is both similar and in important respects different from a campaign for wiping out low-income country debts. One similarity stems from the fact that just as the creditors' HIPC Initiative preceded the Jubilee petition campaign so was there an earlier official effort to write down middle income country debt to "sustainable" levels. It was known as the Brady Plan introduced by US Treasury Secretary Nicholas Brady in 1989.

When the Brady Plan was introduced we in the Ecumenical Coalition for Economic Justice said the amount of debt relief involved was "far below the amount needed to release countries from debt bondage". The Brady Plan also introduced for the first time the practice of attaching SAPs to debt relief and not just to new loans as under the Baker Plan.

In retrospect we can say the Brady Plan "succeeded" in one respect - it allowed major private banks to offload the portion of their debt they considered uncollectable (converting some of it into tradable Brady bonds) without facing outright defaults.

Since 1989 the composition of middle-income country debt has changed. In the 70s and 80s it was predominantly a case of private bank loans to governments. In the 1990s governments and private and state corporations within middle-income countries relied more on bond issues and less on bank loans.

In contrast to low-income countries which have become more and more dependent on public creditors (only 23% of their debt stocks are private) middle-income country debt grew in the 1990s largely because private firms borrowed abroad from private lenders.

Yet when we look at the World Bank figures on total debt stocks, we see that, at the end of 1998, 81% of total long-term debt of middle-income countries is public or publicly guaranteed. Part of the reason is that many of these private debts were publicly guaranteed from the beginning.

But another way private debts become a public responsibility is through IMF-organized bailouts that have forced governments to take responsibility for dubious private debts.
Over US$200 billion worth of bailouts arranged by the IMF since 1995 have saddled the peoples of Mexico, Thailand, Indonesia, South Korea and Brazil with new debts while private investors were allowed to take their money and run.

As Martin Khor has written "The IMF practices double standards... On the one hand it insists that the governments play by strict market rules and not put in money to aid ailing local financial institutions and companies. But on the other hand it wants the governments to pay back all the external loans contracted from international banks, including the huge debts of the private sector that have gone sour."

A major challenge for the Jubilee campaign is to confront this practice whereby the IMF and the US Treasury, in consort with other governments and International Financial Institutions, use public money to bailout private foreign investors, burdening peoples with ever higher debt loads. In the absence of any kind of standstill mechanism or capital controls, private investors are free to take their money and run at the first sign of trouble.

While bailout loans nominally go to the governments of the crisis-stricken countries, the money often ends up in private coffers. This pattern characterized the Mexican crisis of 1994-95 when over half of the rescue package organized by the US Treasury and the IMF was used to pay off the holders of tesobonos a special kind of Mexican government bond indexed to the peso-dollar exchange rate. Out of a total bailout package worth US$48 billion, US$29 billion went to owners of tesobonos. While the bondholders and the leading Wall Street firms that arranged the transactions got their money back, the Mexican people were saddled with a debt that had both IMF structural adjustment conditions and further bilateral conditions demanded by the USA attached.

When the IMF provides a central bank with more foreign exchange reserves and at the same time prescribes austere fiscal and monetary policies, speculators know they can bet against that country's currency with a high degree of success.

This is scandalous. Michel Chossodovsky cites the Wall Street Journal's succinct description of what happened in Brazil:
"the $41.5 billion of foreign currency that the IMF marshaled to back Brazil's currency, was doomed to end up with the speculators, leaving Brazil with its foreign currency debt increased by that amount. So often has this scenario been played out... [for] other currencies kept at artificial heights with interest rates, that by now the ploy should be known to schoolboys. The government whose currency is attacked draws on foreign loans arranged by the IMF, and turns over the foreign currency to buy back its own paper. The 'assisted' country ends up with the foreign debt to the amount of the 'aid' while the speculators pocket the proceeds of the loans, and move on to the next replay of the scam."

Chossodovsky concludes the IMF, the G7 and 14 other countries that co-financed the bailout "bear a heavy burden of responsibility in endorsing a multi-billion dollar scam conducive to the brutal impoverishment of the Brazilian people."

I cite these examples of bailouts of the private sector by way of saying that when it comes to dealing with middle-income countries' debt the challenge is not just to deal with past debts but also with the present mechanism which is increasing middle-income countries' debts. I propose that debts that accrue through IMF bailouts of private creditors are not legitimate.

C. Decommissioning the IMF

Addressing the IMF's practice of bailing out private creditors necessarily takes us onto the wider challenge to "decommission the IMF" to use Walden Bello's evocative comparison with the decommissioning of a nuclear power plant.

The Jubilee South Summit concluded that the IMF and the WTO cannot be reformed "So Shut them down!" I agree that they cannot be reformed but it won't be an easy or simple process to abolish them. It may take some time and several steps. That's why I like Walden's analogy. There are many steps in the decommissioning of a nuclear power plant, not least of which is making the people who built it take responsibility for cleaning up its toxic wastes. Walden calls for "an immediate dismantling of all SAPs; an immediate reduction of the IMF professional staff [and] major cuts in both capital expenditures and operational expenditures of the institution".

Last year when many of us gathered here in Bangkok for another conference we called for the resignation of Michel Camdessus and he did resign! So let's think big along the lines of Walden's proposals. In making our plans for decommissioning the IMF we must also be aware that many private financiers, the ideological champions of unfettered financial markets, want to keep the IMF in existence for two reasons. First, they want it to continue as a disciplinarian imposing neo-liberal SAPs on debtor countries. Secondly they want it as a lender of last resort available to bail them out with public money when they overextend themselves.

One of the sub-texts of the current official debate over the construction of a "new financial architecture" is actually a struggle over whether private financiers should bear the costs of the crises they provoke through speculation and reckless lending instead of getting bailed out with public money.

This issue is actually on the agenda of bodies like the Group of Twenty (G20) though it is discussed under the euphemistic title of "involving the private sector" in crisis resolution. Behind the scenes a very real struggle is going on regarding what to do about making private investors take responsibility for their actions. Some G7 governments recognize they cannot go on bailing out private investors and speculators. Others, like US Treasury Secretary Larry Summers, are holding out for maximum freedom for private financiers while holding the IMF in reserve to bail them out should they get into trouble again.

Proposals for what to do about private debts in the event of a financial crisis show up in the speeches of Canada's Finance Minister, Paul Martin, chair of the G20. In September of 1998 Martin proposed an Emergency Standstill Clause (ESC) in international debt contracts that would enable debtor countries facing a financial crisis to declare a moratorium on their payments while they negotiate new arrangements with their creditors.

This proposal for a legislated ESC is opposed by private banks and other financial institutions. Hence Martin has backed off from advocating a standstill clause exclusively and now talks about "an Automatic Rollover" as another option. An Automatic Rollover in debt contracts would give borrowers the option of lengthening the maturity of their debts but at penalty interest rates. This option would be more favourable to private financial interests than to debtor countries since it would not involve any actual debt write-offs but would involve higher, punitive interest rates.

Instead of measures that merely rollover or reschedule debts we need to campaign for standstills followed by the actual writing off debts.

As we debate ways of decommissioning the IMF, we must keep in mind the need to also propose alternatives to fulfill one of its origin functions - dealing with financial crises. Just as a campaign for decommissioning a nuclear power plant must take into account its one legitimate function - the generation of electricity, so must a campaign for the decommissioning of the IMF have some idea of what kind of body should be established to deal with financial crises.

Instead of having to turn to the IMF at times of financial crisis, all countries must have the option of declaring a standstill on their debt payments and turning to a neutral adjudicative body that does not impose conditions on the write-down of unpayable debts. Archbishop Njongonkulu Ndungane of Cape Town, speaking at the Jubilee South Summit, describes the need for "an independent arbitration process, a form of insolvency procedure which will ensure that creditors no longer call all the shots when countries run into difficulties."

While we engage in debates about decommissioning the IMF we must also not lose sight of the ways that the powers of the IMF and of the World Bank may actually be reinforced by the implementation of the Köln Debt Initiative.

Above I referred to how the Poverty Reduction and Growth Facility may actually result in the legitimation of SAPs. Some of us fear it may also lead to a new role for the IMF and the World Bank in setting social policies with disastrous results. We need only recall how the IMF compelled Mazambique to quintuple user fees for rural health centres and privatize rural water distribution under earlier programs.

Neither is the plan to delegate the social aspects of PRGF conditionality to the World Bank reassuring. The World Bank sponsored a seminar on privatizing education in less developed countries during its annual meeting in September. The Bank invited a representative of Merrill Lynch and Co. who presented the corporate view that education and training should be seen as "a US$2 trillion global market" waiting to be tapped by entrepreneurs. He said privatization "will result in sustainable, high price/earnings ratios and significant opportunity for investors." One shudders at the thought of what this would mean for the very poor who are already excluded from educational opportunities due to their inability to afford school fees.

There's another item on the immediate policy agenda that could lead to the strengthening rather than the decommissioning of the IMF. This is the funding of HIPC Trust Funds. There was some expectation that we in the Canadian Jubilee campaign would lobby the Canadian government for more money for these Trust Funds. But we in CEJI see such a campaign as a contradiction since we don't support HIPC itself

The HIPC Trust Funds are a dubious means of dealing with the costs of debt write-offs. They keeping up the fiction that low-income country debts can be "repaid" and that the Fund and the Bank must retain their status as "preferred creditors" whose loans are never in default. The Trust Funds involve collecting donor contributions to make debt payments to International Financial Institution's on behalf of HIPCs as though debts were being serviced on schedule. It would be simpler to write-off the loans owed to the Bank and the Fund as "bad debts" as would have happened long ago were they debts owed to private financial institutions.

The World Bank can afford to write off low income debts out of its reserves worth some US$3.24 billion. The Bank has another US$16.7 billion in "retained earnings" (or what a private bank would call profits). These could be used without seeking more contributions to the HIPC Trust Funds which legitimize HIPC itself and its Structural Adjustment conditionality. Forcing the World Bank to use its own reserves would make it take responsibility for its imprudent lending in the past.

Similarly the IMF has loan loss reserves worth some US$18 billion. Forcing the Fund to use its own reserves to write off illegitimate debts could also be a step towards its decommissioning

D. Genuine South-North Dialogue

We in the Canadian Jubilee campaign take the position that the agenda for future Jubilee debt campaigning must be worked out in dialogue with Jubilee South. I repeat that we agree with our partners in Jubilee South who say "There can be no effective redressing of North South relations or effective debt action if the people of the South are not directly involved."

It is unacceptable for northern campaigners to set priorities for Southern groups to follow. Solidarity demands a genuine dialogue between Southern and Northern groups to develop complementary responses wherein campaigns can be adapted to different national realities.

While our goals are the same, our tactics may differ from country to country. For example, our Canadian campaign against SAPs is greatly strengthened by our ability to show how the most drastic cuts ever made to Canadian social programs were prescribed by an IMF Article IV review of the Canadian economy in 1994. Our own experience with bad advice from the IMF reinforces our call for not allowing the IMF to dictate social policies anywhere.

Similarly we need to dialogue concerning how we can build the case for canceling middle-income country debt through highlighting actionable issues. In Canada a simple call for writing-off Brazil's debt would be hard to sell. Brazil's external debt (US$228 billion) is bigger than all 41 HIPCs combined (US$227 billion). In some circles in Canada the Köln debt initiative is already viewed as "generous". We need to show how the 40 million Brazilians who live below the poverty line are as oppressed by debt as a re the poor in Malawi.

To make the case for canceling Brazil's debts we in Canada need to co-ordinate our actions with the call by the Brazilian campaign for an audit of Brazil's debt. We need better information on how much of Brazil's debt dates back to the era of the military dictatorship; how much was wasted on dubious projects; and how much resulted from compounding of interest payments after Northern governments unilaterally raised interest rates. Such an audit would help us communicate to our constituency the illegitimacy of much of Brazil's debt.

In this same spirit we have suggested that UNCTAD or the UNDP could play a role in auditing the origins of all LDC debt.

To move from the recognition of the illegitimacy of so much of the debt to actual campaigning on these themes we need more detailed action plans worked out in dialogue with our partners in Jubilee South. Identifying short term goals without abandoning long-term objectives and without having our efforts co-opted will be a delicate task. The precise roles of Southern and Northern campaigns may differ. For example, we in the North may have a particular role in what the Brazilians call "creating a climate where the correlation of forces is more favourable to suspension of the external debt"

While we educate our constituencies on our broader goals involving the economic, social, political and ethical illegitimacy of the debt, we still need to conduct some discreet campaigns that set precedents for achieving our broader goals.

In Canada we have discussed the need to set a modern legal precedent for canceling odious debts. This would be tremendously important for all the peoples who have suffered under oppressive regimes. We in CEJI have talked about making the cancellation of South Africa's apartheid era debt a priority for us but before we launch any campaign we have to sit down with our comrades from South Africa to discuss the goals, objectives, tactics and strategies.

We may not have the capacity to do everything all at once but we certainly intend to move beyond lobbying G7 leaders to campaigns that recognize the social, political and ecological debts owed by North to the South.

In conclusion I again stress that genuine partnership requires dialogue. We embark on this dialogue in the spirit of the words of Samora Machal who once counseled that "International solidarity is not an act of charity. It is an act of unity among allies fighting on different terrains towards the same objectives."