Latest News

Jubilee Statements

Monitoring the impacts of government and corporate behaviour in communities overseas.

The time is now for the illegitimate debt campaign

Release Date: 27-Feb-2008

Dear friends

The reason that I am most proud about being involved with this campaign is that not only is it a truly worldwide movement, but one whose soul comes from the people in the Global South. It is these people who suffer the most from the system that we are trying to change, and that is why we believe it is so important to listen to and be led by our friends who campaign on debt and economic justice in the Global South.

For years our friends in the South told us that the most important thing to them was not piecemeal reform of a system that was inherently unjust. They wanted us to campaign with them on the very illegitimacy of the system itself. Development finance has let the people of the developing world down by all-too-often putting the interests of people in wealthy countries before the world’s poor. Despite the fact that the intentions were often good ones, the outcome has been that so much money has come to be owed by poor countries to the rich for projects that have often not benefited the people of those countries.

This is what we mean when we say illegitimate debt, and our friends in the South have always wanted this to be the centrepiece of the debt campaign. For years, we campaigners in Europe, America and Australasia resisted this plea and chose to focus on promoting a message of debt cancellation as a kind of aid. However after many years, we in the Global North came to see the wisdom of the Southern strategy; now the illegitimate debt issue rests firmly at the centre of the global debt campaign.

This has been a welcome and much needed change. First, it allows us to point a spotlight on the essential injustices of the past. Second, focusing on where lenders and borrowers have gone wrong in the past allows us to begin to face the task of creating a new system that will make it much more difficult for this opportunistic and imprudent lending to occur in the future. We are looking to implement rules that will make another debt crisis impossible.

It is for this reason that debt campaigns all around the world are undertaking audits of the lending of creditors to debtors. Identifying the nature and extent of the illegitimate lending will both make strong our case for debt cancellation/debt repudiation and also more easily enable the creation of rules for a new and fairer system. This has been the driving inspiration behind Jubilee Australia’s adoption of an audit of Australia’s lending and our push for greater transparency of our Export Credit Agency, EFIC.

The challenge for us as a movement is to ensure that governments, development institutions and other lenders acknowledge this principle of illegitimate debt as a way of coming to terms with the shadowy past of development finance. There is some good news on this front: after Norway became the first country in 2006 to cancel its own illegitimate debt, we are beginning to have more success in bringing about debate and discussion on this issue. The World Bank, the world’s most influential development institution, is finally beginning to face up to the issue of illegitimate debt, albeit slowly, releasing a discussion paper on the issue last year. While the paper was both disappointing and intellectually inadequate, the opportunity has been created for more discussion on this issue. For the first time debt campaigners are having a real dialogue with World Bank officials on the issue of illegitimate debt.

This is an important step and demonstrates how far our campaign has come. It is a significant historical moment for the campaign and we are now in the position, as a movement, to effect real change. But now more than ever it is so important that our friends and supporters in the broader community speak up and make their voices heard. It is only if our voices speak loudly and clearly through our own democratic channels that we will be able to bring about the changes that we seek. 

Luke Fletcher was National Coordinator of Jubilee Australia from 2005-2007. He is currently pursuing a double Masters degree at the University of California, Berkeley, where he continues to work on issues of debt, economic justice and development.