Bankers, bishops and the SWP unite on ‘third world’ debt
Just what is it that can unite Tony Blair, the archbishop of Canterbury, the head of the World Bank and the Socialist Workers Party? What is it that has thrown together Christian and atheist, Labour and Tory, rich and poor, socialist and capitalist?
Championed by The Guardian, the problem of ‘third world’ debt has moved from being a “backroom issue for number-crunching officials to becoming a mainstream campaign which has succeeded in capturing the public’s imagination” (June 16). As the paperso aptly puts it,
“For more than a decade, an extraordinary alliance which ranges from financiers to leftwing campaigners has recognised the urgency of dealing with debt. The alliance spans political divides: Kenneth Clarke and John Major were among the first to call for concerted international action.”
The latest manifestation of this campaign is Jubilee 2000 - a coalition of church groups, trade unions and community organisations. It attracted more than 30,000 in London to pressurise last weekend’s G7 summit in Cologne. And it appears that the campaign has achieved some success. One of the central agenda items at the 25th G7 economic summit, attended by the world’s seven largest economies, plus Russia and the president of the European Commission, was the issue of relieving the burden of debt from the world’s poorest countries.
A package worth more than $100 billion (£63 billion) was agreed. While this sum goes only a small way to removing the mountain of debt owed by the world’s developing economies - sub-Saharan Africa owes $226 billion alone - it will remove two thirds of the amount owed by what are termed the ‘heavily indebted poorer countries’ (HIPCs); a total of 36 states.
The announcement by the G7 received a qualified welcome by Ann Pettifor, co-founder of Jubilee 2000, who said it “showed the power of the debt-relief movement”. Jubilee 2000 estimates that Laos, Zambia and Rwanda will see debt payments fall by at least a half. Yet Oxfam estimates that for Tanzania, payments will be lowered by just $10 million, leaving the country paying $200 million a year to western creditors - seven times what it spends on healthcare. While debt campaigners agree the Cologne debt initiative does not lay the basis for solving the crisis, they all say it is a step forward.
Clearly, this is a long way from the goals of the popular front-type movement organising to force the western governments and banks to ‘drop the debt’ by 2000. It is also less than the stated goals of the IMF, the World Bank and the G7. The agreed aim of the ‘international community’ (read imperialism) is to cut world poverty ‘in half’ by 2015. Of course much of the huff and puff from the summit is just that. More than $20 billion of the debt relief is merely writing off bad debts which are not being paid and never will be. In other words the debts will be paid by nationalising them or edging up general interest rates.
It is critical to put the issue in context. In the post-Soviet New World Order, the ‘third way’ generation of western politicians hold sway - Blair, Clinton and Schröder. Liberal capitalism rules by overwhelming consent, and presents a human(itarian) face.
Speaking in Chicago in April, just before Nato’s 50th anniversary activities in Washington DC, Tony Blair unveiled his much vaunted, though intellectually vapid, ‘third way’ approach to foreign policy. This ‘Chicago doctrine’ emphasises the ‘international community’ as the main guiding principle for foreign policy - stressing what Blair calls international moral and humanitarian issues as well as strategic political and economic questions. First on Blair’s list in April was global financial reform. Second was the bombing of Serbia.
On cue, Oxfam made a direct link between the war against Kosova and the ‘third world’ loans crisis, demanding that the $5 billion to be spent every year on peacekeeping in Kosova be matched with investment in debt relief for sub-Saharan Africa.
Writing in The Guardian (June 15), archbishop of Canterbury George Carey and World Bank president James Wolfensohn joined the chorus, arguing that “we are for the very first time working together as a world community on development issues”. And further: “It is important to establish at the outset that we both firmly believe that debt is a moral issue.”
Besides pandering to humanitarian sentiments the bourgeoisie has a real interest in moulding public - ie, taxpayer - opinions on debt relief. Behind the not inconsequential ideological facade of the moral claims there lie important economic issues.
What really unites the liberals and the banks is a desire to institute normal - real - capitalism in the ‘third world’ so as to sustain the further growth of the world economy. The intervention of Carey and Wolfensohn is revealing. They write: “Sometimes the passion all of us bring to this issue has created the perception that ‘creditors’ ... stand on one side of a great divide, with dedicated churches and NGOs [non-government organisations] squarely on the other. In reality, we share the same dream: to eliminate poverty.” This is qualified by a list of shared principles which include: “Relief must be provided only when there is common agreement that freed resources will, and can, be used wisely and productively.”
And here is the nub. The capitalists themselves understand the benefits that would accrue to the core economies of Europe, the US and Japan if economic growth could be triggered in what is now the periphery of the world economy. The overwhelming bulk of profits for transnational corporations are made in the core economies. Profit, though not nearly as much, is also there for the taking in intermediate countries such as Argentina, Turkey and the Asian tigers. But the poor states of Asia, Africa and Latin America are worth little. Sub-Saharan Africa is an economic black hole.
This is why debt relief and even its removal - as long as it is linked to economic and political ‘reform’ - is a pressing issue for the big capitalist powers. The very poor countries, far from being ‘super-exploited’, are almost unexploitable in a capitalist sense. In such countries there is little indigenous capital, a small, unskilled, unhealthy working class, and a large peasantry and declassed urban poor. Surplus extraction is done in an absolute sense. Natural resources are stripped, bribes are expected and given, but the rich vein of relative surplus value - brought about by machinery, technology and high-skill workers - of mature capitalist economies is not only untapped: it is unavailable.
The UK and Germany have been at the forefront of the debt initiatives. Clare Short - the most vociferous advocate of the Chicago doctrine in cabinet - and Gordon Brown well understand the needs and interests of imperialism. Robert Chote, economics editor of the Financial Times reports that
“the UK has suggested individuals and multinational companies should contribute [to Gordon Brown’s debt relief package]. The latter have an interest in lifting the burden of debt from countries that are potential markets and production locations” (June 21, emphasis added).
According to the Cologne debt initiative, it is not only corporations, banks and the international financial institutions (IFIs) which are to foot the debt relief bill. Western governments will also be digging into their coffers. In the lead-up to the Cologne summit, the UK government pledged $100 million to the G7 initiative and proposed a Millennium Trust Fund for poor nations, neatly dovetailing with the spirit of Jubilee 2000 and the hypocritical pleas of the aidocracy which rules so many states in sub-Sahara Africa.
This represents a de facto nationalisation of ‘third world’ debt in the imperialist countries. As the debt is trimmed to manageable levels, the IFIs such as the IMF and World Bank will set their reform targets - social as well as economic - for debtor countries. What is crucial is the development of structures that will allow real capitalist exploitation of the resources and population of the ‘third world’. This intent is clear in the texts of the communiqués emanating from Cologne over the weekend.
The statement Deepening the development partnership says: “While international assistance and debt relief are clearly important, their positive effects depend on sound national efforts towards economic and structural reform and good governance, where the private sector and civil society are able to play productive roles.” In other words, no debt relief to tin-pot dictators who do not do what they are told.
“The strategy for the debt initiative for the HIPCs,” states the G7’s Plan of debt forgiveness 1999,
“is based on the approach that debt relief is linked to structural and social reforms aimed at, for instance, developing primary healthcare and an efficient education system - as well as the necessary economic adjustments.”
This strategy has punitive adjuncts. The Plan of debt forgiveness states:
“All attempts to bring about a sustainable improvement in the living standards of people in the poorest countries through debt relief will fail if they come up against an unstable political environment. Every initiative must therefore be embedded in a comprehensive strategy for conflict prevention.”
Clearly, the debt relief initiative is far from empty hypocrisy. There is concrete self-interest for imperialism.
And what of the left? One of the most eager champions of the Jubilee 2000 cause has been the Socialist Workers Party. It has uncritically supported this oh-so-respectable campaign of Christian do-gooders and imperialist moralists.
Desperate to fire up their carry on campaigning approach to politics, the SWP has been reduced to dressing Jubilee 2000 in red garb, when it is far more likely to sport fashionable gabardine or chino. Charlie Kimber writes in Socialist Worker (June 16) about the “wonderful Cancel the Debt demonstration” where “over 30,000 people, many under 20, took part in five hours of activities to show that they hate the way the financial system sentences millions of people to illness and death.” He finishes off saying:
“Media pundits and the acolytes of New Labour take great delight in reminding the left that the level of strikes is now the lowest since the Stone Age, or at least 1891. But among those who linked arms last weekend there is anger against injustice and against a system which destroys the planet while it wrecks lives. Under the surface there is a thirst for justice that Tony Blair does not even begin to satisfy.”
This worship of, and subordination to, anything and everything that can be used to recruit the gullible is reaching new lows for the SWP. On the debt issue it has led them to tail the liberal wing of the imperialist bourgeoisie. With no clear programme and rudderless in Blair’s Britain, the SWP are jumping on whatever bandwagon moves.
I take no pleasure at all in reminding SWP comrades that we are still in an ideological period of reaction. But when the comrades wilfully ignore reality and turn a liberal, charity-mongering rally into a substitute for working class economic struggles, it only proves the point.
Evidently the SWP is hooked on a type of politics that limits the working class to narrow trade unionism. During the bombing of rump Yugoslavia, the central slogan of the SWP was ‘welfare not warfare’. This social-pacifist approach - that every pound spent on a bomb is a pound not spent on a hospital bed - falls into a socialist nationalism. Appealing to workers’ narrow interests is no substitute for a global approach. To apply the same logic would lead to some such slogan as ‘doctors, not debt relief’.
Unless our class masters high politics and becomes the universal class it is doomed to be nothing more than the extreme left of bourgeois society. Thus the SWP finds itself uncritically and deeply buried in a front so broad that it ranges from
“mild liberalism to revolutionary Marxism ... from ‘progressive’ bankers and Peter Mandelson to people who would gladly string up anyone even thinking of running a bank” (Charlie Kimber, Socialist Worker June 16).
The debt must go, but it needs to be abolished by the masses themselves actively fighting in the ‘third world’ and through working class power in the west. Not ‘cancelled’ in the way the G7, Jubilee 2000 - or, it seems, the SWP - are suggesting.