Terrorism of Debt
Fish is a freelance journalist who now dedicates
her writing to the pursuit of a fair world, without wars
and with equality. This article is
offered freely for distribution and publication. Wanda can be contacted
Imagine two scenes
in different parts of the world.
In our first scenario,
three hooded gunmen raid an embassy. After a bloody
gun battle, the terrorists take the Ambassador and other
survivors as hostages.
They demand the release of certain prisoners, or
they will destroy the embassy and kill their hostages.
In our second scenario,
three grey-suited executives raid a country. The collapsing
economy has left the government powerless to administer
Failed crops, internal corruption, and natural disasters
have taken their toll. People are desperate
and dying. The
IMF and World Bank executives outline the terms and conditions
of the $50 billion loan.
The terrorists in
the first scene are eventually captured and executed for
The bankers in the second scene are rewarded for
their successful hijacking of the country’s economy. Their corporations
will be paid many times the loan over the next decade.
The debt trap will cripple and imprison the country’s
future earning capacity.
The executives receive bonuses and promotions that
take their collective salary to a sum greater than the salaries
of all the lowest paid workers in the country they had signed
up to the debt trap.
Over the past fifty
years, the IMF and the World Bank have forced economic ‘development’
that benefits the wealthy lenders and multinational corporations
in the industrialized north and enslaves the world's poor
majority in developing and third world countries.
These international loan sharks have hijacked the
economies of more than 60 countries. Loans, international
assistance, and debt relief are given only when countries
agree to conditions set by the Bank and Fund.
‘Free trade’, market liberalization, and privatisation
of essential resources and services are demanded if ‘financial
stability’ is to be achieved. While crippling
interest payments force cuts in health care, education and
other social services for millions of people around the
globe; the banks and corporations that ‘rescued’ those countries
report record profits. Humanitarian crises,
like wars, have become lucrative business for those who
have money to lend.
years ago, economist J. W. Smith warned:-“The
size of the debt trap can be controlled to claim all surplus
production of a society, but if allowed to continue to grow
the magic of compound interest dictates it is unsustainable.
The third world debt has been compounding at over
20 percent per year between 1973 and 1993, from $100 billion
to $1.5 trillion [only $400 billion of the $1.5 trillion
was actually borrowed money: the rest was runaway compound
interest]. If Third World
debt continues to compound at 20 percent per year, the $117
trillion debt will be reached in eighteen years and the
$13.78 quadrillion debt in thirty-four years."
More shocking than
the magnitude of the figures (how does one fathom a quadrillion
dollars?) is the chilling fact that the debt trap robs
all the surplus production of an entire society.
Debt does much more than forcing a country to work
for nothing. This
form of terrorism punishes the children, abandons the sick,
and enslaves the adults.
Every hour, one Filipino
child dies because of debt-related poverty. Millions of children
die every year in the Third World because they are too poor
to buy food or medicines. Their families
work extraordinary hours to earn less than $2 a day. Filthy slums with
inhumane living conditions are prolific in most countries
in the world, and are no longer exclusive to the third world.
estimated 100 million children live and work on the streets
in the developing world, including 40 million in Latin America.
Although many of these street children have some
family links, they spend most of their lives on the streets
begging, selling trinkets, shining shoes or washing cars
to supplement their families' income. These children
rarely go beyond a fourth-grade education. The 25 million
children without families live in the streets with other
street children. They
sleep in abandoned buildings, under bridges, in doorways,
or in public parks.
victims of debt resort to petty theft and prostitution to
are addicted to inhalants which offer them an escape from
reality and hunger pains -
in exchange for a host of physical and psychological problems,
including hallucinations, pulmonary oedema, kidney failure,
and irreversible brain damage. These children
are abused, even murdered, by the people who are supposed
to protect them. Thus
the story of Nahamán, a 13 year old in Guatemala.
One night, while walking on the streets, he was kicked
to death by four policemen who found him and decided to
punish him. His
crime? He was
a street kid .... a subhuman without pedigree, a vexing
reminder of Guatemala's malignant inclinations, the mortifying
embodiment of a fallen society, a scapegoat.
And, in death, a martyr.
The words on his gravestone read: “I only wanted
to be a child, but they wouldn't let me.”[ii]
While indebted countries
struggle to pay mounting interest on debt loans, their hospitals,
schools, water supply, electricity, and public transport
deteriorate rapidly with reduced budgets.
Disease, destitution and general lack of sanitation
characterise many Third World cities. The children who
do survive are unable to read and write as government budgets
for health and education are cut to the bone as a result
of debt service. In
Niger, one of the poorest countries in the world, the government
spends three times more on debt repayment than on health
pays $10 billion every year in debt service. The countries
of sub-Saharan Africa are experiencing a pandemic with terrible
South Africa one in five people has HIV-AIDS, and in Zimbabwe
one in four. One in seven Kenyans
has the virus. In
Botswana, the country with the highest rate of infection
in the world, more than one-third of all adults are HIV
million people, or the entire population of Australia, have
died in sub-Saharan Africa since the pandemic began.
If current trends continue, there will be than 40
million AIDS orphans in Africa by the end of this decade.
their extreme health crisis, 23 African countries
spend more money on debt repayment than they spend on healthcare,
which attracts only $2.5 billion, or a quarter of their
debt service. This does not
concern the banks that loaned the money. Their only objective
is to make their rich clients even richer. The Kenyan widow
dying of aids and leaving five orphans is not entered into
the ledger books.
However, the GM food that the starving widow and
her children are forced to eat is entered into the ledger
humanitarian crisis has created a market for modified food
that the rest of the world didn’t want. After all, beggars
can’t be choosey.
By contrast, the wealthiest
individuals in the world can choose or buy anything they
want. At the
top of the list is Bill Gates whose net worth in 2003 is
forty billion dollars, or four times the annual debt
service of sub-Saharan Africa and sixteen times the annual
expenditure on health and education in those countries. The
world's 497 billionaires in 2001 registered a combined wealth
of $1.54 trillion, well over the combined gross national
products of all the nations of sub-Saharan Africa ($929.3
billion) or those of the oil-rich regions of the Middle
East and North Africa ($1.34 trillion). These five hundred
people also possess greater wealth than the combined incomes
of the poorest half of humanity.
about that fact for just a minute. Five hundred obnoxiously
wealthy people have too much while nearly three billion
people have nothing. Allow the full
meaning to play out in your mind. While five hundred
people have enough money to buy several countries, half
of humanity struggles on less than $2 a day and can barely
buy enough food to stay alive. It gets worse. Anything extra
our third-world worker can earn will go into debt service
banks profit, and the shareholders increase their wealth.
The five hundred at the top of the tree have just
made a profit out of poverty.
After the G8 summit
in Okinawa in 2000, President Obasanjo of Nigeria made this
comment on Nigeria’s debt: "All
that we had borrowed up to 1985 or 1986 was around $5 billion
and we have paid about $16 billion yet we are still being
told that we owe about $28 billion. That $28 billion
came about because of the injustice in the foreign creditors'
interest rates. If you ask me
what is the worst thing in the world, I will say it is compound
President Obasanjo spoke out, the developing world was spending
$13 on debt repayment for every one dollar it received in
While most people
would be aware of the debt burden of the third world, they
would be surprised to learn that the United States is also
a heavily indebted country. The accumulated
debt of the world’s ‘richest’ country, the USA, is more
than two trillion dollars. The exact amount
owed by the whole of the developing world, including India,
China and Brazil, is $2.5 trillion. This means that
three hundred million Americans owe as much to the rest
of the world as do five billion people in all the developing
inequity doesn’t stop there. While
developing country economies struggle with debt service
repayments totalling more than $300 billion per year, the
US must only pay $20 billion to service an almost equivalent
amount of debt. Jubilee, an international
movement working to remove the third world debt, classifies
the United States as a “heavily indebted prosperous country”.[v]
If the money is not
coming from the United States, where is it coming from? Who actually owns
the money that was loaned in the first place? Some of it comes
from illegal activities and is recognised as “dirty money”.
US and European banks launder between $500 billion
and $1 trillion of dirty money each year, half of which
enters the coffers of American banks. [vi] According to Catherine
Austin Fitts, a contributing editor to “From the Wilderness”,
and formerly Assistant Secretary of Housing under George
Bush, the four largest states for the importation of drugs
are New York, Florida, Texas and California.
She points out that the top four money-laundering
states in the U.S. (good for between 100 and 260 billion
per year in 1999) were New York, Florida, Texas and California. The connection
goes on. Eighty
per cent of all Presidential campaign funds also come from
New York, Florida, Texas and California. [vii]
the World Bank and IMF are the main targets of activists
working to remove third world debt, these two international
banking institutions are influenced by various national
banks, financial consultancies, and former politicians who
manage the wealth of the world for their wealthy clients. The “Group of
Thirty” established in 1978 is a private, non-profit, international
body composed of very senior representatives of the financial
private, public and academic sectors.
This select group of controllers aims “to deepen
understanding of international economic and financial issues…and
to examine the choices available to market practitioners
and policymakers”. The most powerful
decision-makers and influencers in the financial world are
members of this magic circle, which includes major national
banks, universities, former politicians, and global consultancies.[viii]
the impressive collection of financial wizardry and power,
the Group of Thirty and annual Economic Summits have failed
to neutralise the terrorism of third world debt.
Those who manage the global economic system are focused
on the shareholder value of banks and corporations. The system is
“successful” as long as it returns more wealth to the wealthy.
Yet these financial experts are myopic about the
future. The current level
of debt worldwide is unsustainable and must eventually lead
to the total collapse of a global economy that expects increased
productivity from the poorest and unhealthiest workers on
Declaration of Human Rights, adopted by the United Nations
General Assembly in 1948, is built on the principle that
human rights come from the "inherent dignity"
of every person. The Declaration
states, "Everyone has the right to a standard of
living adequate for the health and well-being of himself
and of his family, including food, clothing, housing and
medical care and necessary social services, and the right
to security in the event of unemployment, sickness, disability,
widowhood, old age or other lack of livelihood in circumstances
beyond his control."
United Nations wrote that declaration 55 years ago, mankind
was recovering from the trauma of a world war and the horrifying
genocide of millions of innocent civilians.
At that time it was necessary for mankind to ratify
basic human rights and the principle of human dignity.
happening in the third world today is even more horrifying
than the death camps in Nazi Germany. This time the
objective is not to “cleanse the master race”, but to make
the masters wealthier. The banks, in
pursuit of more wealth and power, terrorise the third world.
Those of us who live comfortable lives in developed
countries are part of the crime.
Our lifestyle, and our expectation that our savings
will grow, feed the terrorism of debt. We might save
a few dollars with the cheap imported clothes we wear, the
coffee we drink, and the oil we put into the car; but those
savings have made slaves of children and started wars.
Our humanity has been hijacked by the dollar and
the pursuit of wealth has become more important than human
do we wage war on the “terrorism of debt”? The Global Exchange
website suggests ten actions that will democratise the global
economy[ix]. These are not
easy or quick fixes, and each action will require dedication
and persistence. The following
summary is a starting point.
The WTO (World Trade Organisation) must be
replaced by a body that is fully democratic, transparent,
and accountable to citizens of the entire world instead
of to corporations. We must
build support for trade policies that protect workers,
human rights, and the environment.
Mandate corporate responsibility so that corporations
have to prove their worth to society or be dismantled.
Now many corporations advocate weakening of
labor and environmental laws and their pursuit of
free trade has delivered a global economy of sweatshops
and environmental devastation. Corporations
must be accountable to public needs, be open to public
scrutiny, provide living wage jobs, abide by all environmental
and labor regulations, and be subject to all laws
governing them. Shareholder
activism is an excellent tool for challenging corporate
Restructure the Global Financial Architecture.
Currency speculation earns short term profits
for wealthy investors but does nothing for long term
A tax of 0.1% to 0.25% on currency transactions
would be a disincentive for speculation, would not
affect real capital investment, and could create a
huge fund for building schools and medical clinics
throughout the world.
Support the Jubilee action to cancel all third
world debt, end structural adjustment, and defend
a country’s right to make economic decisions that
will benefit the welfare of its people, not multinational
Prioritise human rights in trade agreements.
rules must comply with higher laws on human rights
as well as economic and labor rights included in the
United Nations Declaration of Human Rights.
We should promote alternative trade agreements
that include fair trade, debt cancellation, micro-credit,
and local control over development policies.
Promote sustainable development, not consumption,
as the key to the progress.
International development should not be export-driven,
but rather should prioritise food security, sustainability,
and democratic participation.
Integrate women’s needs in economic structuring.
Family survival around the world depends on
the economic independence of women.
Economic policies need to take into account
women's important role in nutrition, education, and
Build free and strong labor unions internationally
The union movement needs to be reborn.
As corporations increase their multinational
strength, unions are struggling to build bridges across
borders and organize globally.
Activists can support their efforts and ensure
that free labor is an essential component of any 'free
Develop community control over capital and promote
socially responsible investment.
Communities should be able to develop investment
and development programs that suit local needs including
passing anti-sweatshop purchasing restrictions, promoting
local credit unions and local barter currency, and
implementing investment policies for their city, church,
and union that reflect social responsibility criteria.
Promote fair trade instead of free trade. We need
to build networks of support and education for grassroots
trade and trade in environmentally sustainable goods.
We can promote labelling of goods such as Fair Trade
Certified, organic, and sustainably harvested.
It is time
to reclaim our humanity and to 'equalize' the economy so
that we can fairly run, not unfairly ruin, our world.
Economic theory will not feed, clothe or shelter
us when we have used up the last poor worker. The current system
is doomed to fail and will cost more millions of lives.
If we start now, our grandchildren will be able to
enjoy a world where human dignity is the most valued currency.
Let's start to fix it today.
Street Children " Nahaman" by Casa Alianza
a Jubilee 2000 news update
after the G8 summit in Okinawa, August 2000
“The United States as a HIPC”
Dirty Money" Foundation of US Growth and Empire
Size and Scope of Money Laundering by US Banks From
La Journada [Mexico], 5/19/01, by
James Petras - Professor of Sociology, Binghamton University
[vii] CIA, Drugs and
Wall Street. “All
Promises Broken - Volume II Hearings Held Without Notice
- Behind Closed Doors”, Michael
C. Ruppert, Posted June 29, 1999 From The Wilderness