“The right to development must be taken into account when considering questions related to the debt crisis of many poor countries.”  It is quite interesting that the final chapter on the international community ends with the Church’s position on foreign debt, and with an emphasis on poor countries.

Foreign debt is primarily an issue for developing countries. This has long been recognised as a major obstacle to human development. Many other problems have arisen because of the enormous debt that developing countries owe to developed countries. Debt has impeded sustainable human development, security and political or economic stability.

The Church highlights for us that foreign debt is as a result of a number of factors. “Complex causes of various types lie at the origin of the debt crisis. At the international level there are the fluctuation of exchange rates, financial speculation and economic neo-colonialism; within individual debtor countries there is corruption, poor administration of public monies or the improper utilisation of loans received.”

What also complicates the process more is that most developing countries have to pay back their loans in hard currencies (currencies that do not change in value).  Most developing countries have soft currencies (values which can fluctuate). Debt crises also occur just by the value of the developing country’s money going down, which can be due to a variety of other inter-related factors.

This has in fact been the trend. Paying off loans implies earning foreign exchange in hard currencies. However most developing countries have been experiencing falling prices for the goods they produce for export; debts become even harder to pay off. Countries many times end up taking on new debts to service the old ones.

What is more troubling about this, is that many of these developing countries obtained advice from development and donor agencies which encouraged them to cut back on important spending such as health, education, in order to help repay loans. This has implied a downward spiral and further poverty.

It is not just the debt that is an issue for poor countries; it is the harsh conditions that come with it, that for years, have been known to make things worse, not better.

The Compendium tells us “the greatest sufferings, which can be traced back both to structural questions as well as personal behaviour, strike the people of poor and indebted countries who are not responsible for this situation.

The international community cannot ignore this fact; while reaffirming the principle that debts must be repaid, ways must be found that do not compromise the “fundamental right of peoples to subsistence and progress”.

Bearing in mind the cost to many persons in developing countries because of foreign debt, the Church reminds us that we need to be compassionate. While the Church does not encourage the non-payment of debt it is important that a person’s right to dignity and right to fulfill God’s purpose is not compromised.

This leads to a discussion on debt forgiveness for some poor countries. Economists often refer to a moral hazard of forgiving debts, because it may encourage people to take on new loans and refuse to pay. 

The 2005Pastoral Letter of the Catholic Bishops of Kenya entitled “On the Burden of International Debt”, uses the biblical story of the rich man and Lazarus to discuss debt forgiveness.

It says the rich man can easily be seen as representing the developed (rich) countries, while poor Lazarus the poor developing countries. The rich man ignores Lazarus' plight. 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.

 The efforts at debt-cancellation that have been 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 2005 Kenyan Pastoral Letter also indicates that the Word of God speaks frequently about debt and cancellation of debt. In the Book of Leviticus, God calls on the people to forgive all debts every 50 years (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.”

Next week, we begin a discussion on the environment; Chapter 10 of the Compendium of the Social Doctrine of the Church.

Persons interested in purchasing the Compendium of the Social Doctrine of the Church, can contact the Justice Desk, Archbishop’s House – 622-6680. Also on sale at the Justice Desk are the Take a Bite Social Justice Programme on DVD and Responses to 101 Questions on Catholic Social Teaching.