Address by the Archbishop of Cape Town, The Most Reverend Njongonkulu Ndungane, at Southwark Cathedral, Thursday, April 24, 1997

Grace and peace to you all in the name of our Lord Jesus Christ. It is good to be with you today as we approach the new millennium. There could not be a more appropriate place for this address than this great Cathedral which stands on a site where people have worshipped for more than a thousand years D a whole millennium. This place of holiness and worship stands in the shadow of the City D a place of complex relationships where powerful financial decisions and actions influence people in far-flung and isolated parts of the world. But the City of London, its workers, dealers, clients and commentators stand at the centre of our new global village and its economy.

The church's role in the world is somewhat different, and far less powerful. For it exists for mission. As Christians, our responsibility is to the God we worship. Like Jesus of Nazareth we do not share in the power and influence of institutions such as those that dominate the City of London. But there are comparisons. One of our strengths is that, like a multi-national such as Shell Oil, or Coca-Cola, we too are part of an international organisation with branches and outlets throughout this world village. In the new Europe, in Africa, in Latin America, in Asia, we are growing and are spread throughout the land. People gather together in our premises, in great Cathedrals such as this, in wattle and daub structures, in small halls, and under trees. We are more diverse than the most diverse multi-national, and we are able to bring all well-disposed people together. That is a great strength. In bringing people together, the Church has an obligation to read the signs the times and to interpret them in the light of the Gospel. In this address today, I want to make the links between our responsibility as god's stewards, the obligation of the world of finance, and the possibilities of new beginnings at the dawn of the new millennium.

So, from this bustling city of London, let me take you to the other extremity of the globe in the southern hemisphere D to the side of the road in Maputo that links Mozambique to what is generally thought to be the economic giant in that region, South Africa. On this road are countless business people. There is the occasional stall selling fruit, vegetables and indigenous craft. Most of these business people displaying their wares alongside the road, however, are entrepreneurs in what was the world's poorest country. They proudly display their wares on the roadside: lounge and bedroom suites and other furniture, barbecues made of wrought iron, wicker work and other manufactured goods which would typically emerge from a light industrial area in developed nations.

The difference is that these hard-working people have had to develop their industry without capital and in the aftermath of two debilitating civil wars. This is part of an economic turnaround in this Third World country which expects a 7 to 8 percentage growth per annum in the next two years. I use the term Third World with some reluctance, because of the recent history in my own country, where blacks were referred to as third class citizens. It seems to me that referring to developing countries in Africa, Latin America and Asia as Third World implies that they are third class citizens of the world, doomed always to straggling last across the finishing lines of life's races. You will thus understand if I tend to refer to developing countries as opposed to the Third World.

But to return to Mozambique, recent reports show that exports are up, and some US$6-billion is expected in foreign investment. Mozambique, in which the Anglican Diocese of Lebombo also falls, has swallowed the medicine prescribed by the World Bank, in the form of a structural adjustment programme that decreased inflation and increased privatisation, with concomitant changes in foreign exchange restrictions and fiscal discipline. Spending is kept strictly in line with actual, not projected revenue collection, something that is seldom achieved by the governments of industrialised countries.

The cautionary tale that should follow from this apparent beginning of a success story in Africa is that the World Bank, the IMF, and other global financial institutions do not repeat the policies of strangulation experienced by developing countries in the past. For this would choke the economy of Mozambique and deny the fulfilment of the potential of the entrepreneurs of whom I have spoken. This is because the history of developing countries and their relationship with the honey pots of the northern hemisphere is not happy. Many of these countries emerged from protracted freedom struggles against colonial oppressors and had to find their own feet economically. They grasped at economic lifelines thrown out by the developed countries. But the lifelines were flawed. Instead, the leaders of these countries incurred massive debt on behalf of their people D a people who were unaware that they were being dragged into a mire of foreign debt that would lead them into a sea of poverty. In the 1960s, 1970s and 1980s, the world's economy was dramatically reshaped as the rich nations lent money to the poor.

The underlying tragedy is that the people of these poor nations had no understanding of the debt they were incurring, any more than ordinary people of rich nations understand the intricacies of the world economy. The result is that millions of people in developing countries are now living in poverty, while a massive transfer of wealth from the people of the south takes place to the developed and industrial nations of the northern hemisphere. Debt repayment has become an important mechanism for transferring wealth from developing countries to the financial giants of the northern hemisphere. According to the United Nations, developing countries paid US$1.662-trillion in debt that was due between the years 1980 and 1992. This is three times the original amount owed in 1980. What is even more staggering is that despite this repayment, the total debt of developing countries is still estimated to stand at more than US$1.3-trillion. These figures are so large that, for many of us, they are mind-boggling.

This transfer is no accident. It is the result of a coherent set of decisions and forms part of a system of global relationships which reproduces the wealth-poverty dichotomy. Former French President, Francois Mitterand was forced to admit at the G7 summit in Naples in 1994 that despite the considerable sums spent on bilateral and multilateral aid, the flow of capital from Africa towards the industrial countries is greater than the flow of capital from the industrial countries to the developing countries. This is underlined by a report last year which said Britain was squeezing cash out of the world's poorest countries by demanding levels of debt repayment far outweighing new loans or aid. According to the European Network on Debt and Development, Britain has been a net recipient of cash from developing countries since 1981. This is hardly something of which any nation can be proud.

It is not only the policies of governments and world banking institutions that have contributed to the debt problem. Big business, in particular the oil industry, has exploited the natural resources of many developing countries, in the process frequently pandering to the greed of some of its despotic leaders. Nigeria, for example, is a country with enormous oil resources and a political establishment long in decay. More than a dozen international, mostly Western European and North American, companies are enmeshed in an oily romance with this West African nation, despite her policies.

According to the Alternative Information and Development Centre in Cape Town, the ratios of foreign debt to Gross National Product in sub-Saharan Africa rose from 51% in 1982, to 100% in 1992, a period during which the so-called Third World debt crisis was allegedly resolved. The external debt of developing countries has become an eternal debt and stands as the largest immediate obstacle to growth and sustainable development.

It is important for us to understand the consequences of this iniquitous imbalance in the lives of ordinary people that is the result of this situation. The United Nations General Assembly understood this imbalance perfectly when it published a paper on poverty in which it said: The faces of poverty are many. They are one in every five. The majority of them are the faces of women... In addition, there are the faces of children, youth, the disabled and the elderly, of indigenous peoples, of migrants, and of refugees D those whom progress has pushed to the periphery The effects of such poverty are wide ranging and all encompassing. Poverty imprisons individuals and whole communities, robbing them of their ability to live with dignity and self-respect. It is a curse which poses one of the greatest threats to society, undermining political stability, social cohesion and the environmental health of the planet.

Poverty is a contributing factor towards the spread of diseases such as HIV and Aids, internecine conflict and wars, and many environmental disasters. The debt of developing countries is exacerbating global environmental degradation. This is linked to the omnipresent black gold syndrome D oil. According to Helen Caldicott, in her book If you love this planet , poor developing countries had, until 1973, made great strides in public health, preventive medicine, and crop production. But then the OPEC countries suddenly increased the price of oil fivefold, and made huge profits by depositing their money in the world's major banks: The banks, ever eager to profit from this windfall, decided to offer low interest loans to Third World countries, which could obviously benefit from extra cash. The banks called this lending policy Recycling, but it turned out to be an international lending spree, in which they unloaded petrodollars on unsuspecting developing countries But tight monetary policies that followed as a result of increasing deficits in the US saw interest rates double, with a consequent rise in indebtedness by developing countries.

It is not only in the area of interest repayments that the powerful nations of the world control and restrict the development of others. Wealthy countries impose tariff or trade barriers on processed goods, but seldom, if ever, on raw materials, thus ensuring that poor countries remain in poverty. To quote Caldicott again: In 1985, British tariffs on raw cotton were zero, on cotton yarn 8 percent, and on cotton t-shirts 17 percent. So the Third World can never break the poverty cycle, because First World tariffs work against the importation of manufactured goods from the Third World. But processed goods are worth much more money than raw materials are.

The dire human consequences of these restrictive policies are complex. Governments invested in arms, some rulers enriched themselves, depositing their riches in Swiss and American banks, while the people ultimately responsible for the debt were swamped by malnourishment, famine and disease, and, in some cases, war. In so far as the environment was concerned, the World Bank encouraged countries to destroy tropical rain forests to repay their debts.

The Judeo/Christo religion tells us that the world and all that is in it belong to the Lord; the earth and all who live in it are his (Psalm 24:1). As the Church, we pay homage to God who is the Creator of heaven, earth, and sea, and all that is in them (Ps 146:6), and as such have overarching responsibility to all people. As followers of Christ, we have an onerous responsibility to ensure that we act as faithful stewards of God's kingdom and his dominion over all; that we don't despoil the earth's resources, that we are not unjust in dealing with his creation. All of which means that we have to internalise in our personal, corporate and national lives the truth that when you have done it to one of the least of these, you have done it to me.

There are sufficient illustrations in developing countries that, despite the iniquities of the past, they have been able to stem the tide of economic decline. Many, however, are still faced with huge debt, and will be restricted in their ability to grow while they continue to have to service debts acquired by previous governments.

This can be interpreted in theological terms when one considers the parable of the talents. In this parable, Jesus speaks of how we are expected to use our talents and skills to take the opportunities that are offered to us and use them in the most productive way possible. Many of us are familiar with the story of the three servants, each of whom dealt with the money entrusted to him in a different way. One of them hid it under his bed, too scared to do anything with it, thereby earning the wrath of his master for having made no use of the opportunities presented to him. Angela Tilby, who preached here on Good Friday, says that there are ways in which we oppress and imprison ourselves and each other which prevent our gifts being used and blocks off the gift of the future. She adds: One of the most effective ways of killing the future is by lending people things in such a way as to control them. In financial terms, this is what the prosperous world did to many Third World countries when they had money to spare in the late 1970s. As a result, their economies are enslaved to ours, they have no future that is not in our interest. The God-given talents of millions of our fellow citizens are unable to flourish, because they are being used to produce quick cash, simply to pay the interest on the loans. No one ever believes that the capital is repayable, and so the rich nations have effectively turned the world into a slave economy We need to heed the lessons of Jesus in his talents parable, as we are challenged to allow our brothers and sisters from poorer parts of the world to develop their gifts, free from the bondage of oppressive debt.

The situation in which developing countries find themselves is abhorrent, one that cannot be acceptable to Christendom. Just as apartheid was unacceptable while some continued to justify it by the misuse of scriptures, so the mounting debt of developing countries, and the refusal to cancel this debt, cannot be justified. The famous theologian, Karl Barth, once said to a well-known South Africa Dutch Reformed Church theologian, at the height of apartheid, that he wondered whether he and his colleagues were free enough to interpret the Gospel faithfully, and as the Holy Spirit might reveal it to them. The theologian, whose Church gave scriptural justification to apartheid, said he believed he was free. But Barth replied: Yes, but some day, you will discover an understanding of the Gospel that is not in accord with your family and your friends understanding.

God, through Jesus Christ, and in the power of the Holy Spirit, reveals himself increasingly to us as our world unfolds. Even those in the Dutch Reformed Church came to realise that apartheid was a heresy. Similarly, it took many years for the Church and society to realise that slavery was a denial of human rights. It was only when people such as William Wilberforce began campaigning for the abolition of slavery that the Church and governments began to understand that it was an inhumane practice. This led to it ultimately being outlawed. In the same way, God will so transform our hearts and minds that we too will come to an understanding that it is morally, ethically, and economically unjust to perpetuate the world's present economic order in which developing countries are ground into subservience.

In some cases these debts were incurred by colonial governments; in others by corrupt independent governments; and in other cases, by oppressive illegitimate governments.

South Africa is a prime example of a country that has had governments that systematically oppressed the majority of its people. In 1973, the United Nations began to describe apartheid as a crime against humanity. Nevertheless, the international financial community, aided and abetted by the Nationalist Party government, continued to make loans to Pretoria, particularly in the critical 1980s, for which the new government is now held responsible. Clearly such loans were not in the interests of the majority of the people of South Africa or in the interests of the people of sub-Saharan Africa, who were also affected to a greater or lesser extent by the grotesque policy of apartheid. From a Church perspective, it should always be remembered that apartheid was declared a heresy because it flew in the face of our belief that every person is made in the image of God.

We are, of course, all conversant with the fact, also expressed in scriptures, that one has to repay debts that have been incurred. As a general guiding rule and principle, one can have little argument with this. When we think of debt, we tend to think of our own personal debts, our mortgages and outstanding loans. But there are striking differences between the nature of our personal debts and the debts owed by sovereign governments.

The main difference is this: in the case of personal or commercial debts our domestic bankruptcy laws enable us to draw a line under the debts, and bring them to an end. This line protects creditors from lending to bad debtors D but it also protects debtors from falling into the abyss of debt. Bankruptcy is a way of recognising that debt can destroy the lives of debtors, and so a line is drawn under a certain level of indebtedness. However, no such line can be drawn in international law. Where the debt has been incurred without the concurrence of the debtor, or where the debt has been allowed to grow to such a size that it becomes a laughable proposition to suggest that it can ever be repaid, then a reshaping of the world economy is required.

South Africa labours at present under a debt of R311-billion or US$70-billion. Interest repayment alone on this amount is the second highest expenditure after education in South Africa's current budget. It should be clear to anyone that no country can be expected to achieve economic miracles when restricted by such a yoke. If this is the case with South Africa, which has a well developed infrastructure, I leave it to your imagination as to how much worse is this scenario in less-developed countries.

As we approach the new millennium, the time has come to invoke the Doctrine of Odious Debt. This doctrine, which was first used almost 100 years ago by the United States, argues that where a debt has been incurred which is not in the interests of the State, but to strengthen a despotic regime, to repress the population that fights against it, etc, then it becomes odious to the population of the State. The debts of developing states which have arisen as a result of bad lending policies by the developed world, should be declared odious and written off. In the case of South Africa, its foreign and domestic debt was incurred, by and large, under the apartheid regime, and should similarly be declared odious and written off. In terms of debt repayment this would mean that we would have a massive R39-billion per annum which would be available for social reconstruction and development. This is a large sum which could be made available to a people who laboured for so long under an oppressive regime. What is more, the multiplier effect of making such an amount available to a country that has often been described as the economic hub of sub-Saharan Africa cannot be gainsaid. Many countries in the region would stand to gain as a result of this. Of course, the multiplier effect would also apply if the debts of other countries in the region were similarly written off in terms of the creation of the international agency I will presently propose.

And while I have suggested that the sums owed by poor countries are large they are, when measured against the capital that flows in and out of the City of London each year, the small change of the international financial exchanges.

In case you think I am being too radical, let me remind you that Britain's Finance Minister, Kenneth Clark, has been reported as saying that he is prepared to increase the slice of outstanding loans that can be written off, currently fixed at 67%, to 80 or 90%. If Britain's Finance Minister is prepared to go this far, what is to stop it going the whole way? If a major country like Britain is prepared to do this, what is to stop other major industrial countries from doing likewise? What is of concern, however, is that a number of lenders, in particular Japan, have refused to offer anything more than the possibility of more generous relief on a case by case basis. Furthermore, while Britain may declare itself prepared to increase the percentage of loans that can be written off, I have not to date read of reports that the country has actually written off substantial debts of developing countries.

Lest I be accused of wanting sacrifices only from the industrialised nations, let me point out that earlier this year South Africa wrote off Namibia's debt to it, believing it effectively to be an odious debt incurred while Namibia was illegally occupied by the apartheid government.

In any event, the day will come, as Unicef said two years ago, when the progress of nations will be judged not by their military or economic strength, nor by the splendour of their capital cities and public buildings, but by the wellbeing of their peoples: by their levels of health, nutrition and education; by their opportunities to earn a fair reward for their labours; by their ability to participate in decisions that affect their lives; by the respect that is shown for their political and civil liberties; by the provision that is made for those who are vulnerable and disadvantaged; and by the protection that is afforded to the growing minds and bodies of their children We can identify with this as a Church fully, not just because these are good values and results for which to strive, but because this is consistent with the biblical vision of Jubilee D of a world where injustices are set right and the terrible poverty which we see portrayed on our television screens and in our print media is diminished and, ultimately, eradicated. The Jubilee vision is spelt out in Leviticus 25:8ff and its underlying theme is to cancel all debts. Consecrate the fiftieth year and proclaim liberty throughout the land to all its inhabitants. For it is a jubilee and is to be holy for you; eat only what is taken directly from the fields. Do not take advantage of each other, but fear your God (vs 10, 12 and 17). We see the same strands of wisdom in Deuteronomy, in the first two verses of chapter 15: At the end of every seventh year you are to cancel the debts of those who owe you money. This is how it is to be done. Everyone who has lent money to a fellow Israelite is to cancel the debt; he must not try to collect the money; the Lord himself has declared the debt cancelled When debt is so severe that the poor and their rulers are prepared to mortgage the very tools of their livelihood, then a line must be drawn under the debts and the poor must be prevented and, in partnership with them, helped from falling deeper into the abyss of debt.

Cancelling the debt of developing countries should thus not be done without establishing a mechanism for its control and some important principles that will determine future economic relations between the rich and poor, thus contributing to peace, stability and prosperity.

I therefore propose the establishment of a Mediation Council, whose responsibility will be to negotiate the repudiation of debts of developing countries. Such a council should consist of four parties, namely an independent international body, a similar regional body (for example, in the case of Africa, the OAU), the International Monetary Fund, and the country concerned. In addition, I propose the adoption of the following principles, at least:

1. No country should be permitted to borrow more than a fixed percentage of its GNP without first going to its people, for example in a referendum, to obtain their approval. In this way, people and communities would be able to contribute to national debates as to whether they wish to incur international debt.
2. No debt should be incurred for the purposes of military expansion or arms purchases of any nature whatsoever or for maintaining oppressive governments that violate fundamental human rights.
3. Should a country expand its armed service or military capacity to the detriment of the development of its people, the international community should immediately cease all loans.
4. Preference should be given to making loans to countries which have illustrated good stewardship in the use of their resources and in the involvement of their own people in their socio- economic development and the creative involvement of foreign investors.
5. Preference should be given to countries that need loans for health, education, social services, infrastructural development and the like.
6. The rape of the environment, or the denial of human rights, by any country should disqualify it from receiving loans.
7. A country which has shown a commitment to democratic government and regular free elections should receive preferential treatment in receiving loans.
8. Countries receiving loans from any international financial institution or commercial bank should submit themselves to a strict monitoring and accountability process so that if it is found that debt relief is being used for military or other purposes that do not advance the socio-economic development of people, the loans be suspended.
9. This monitoring process must ensure that where a debt has been cancelled, any provision that would have been made to service the loan had it not been cancelled, must be redeployed for the development of people and infrastructure.

The danger of such principles is that where a government ignores them, and has its loan called in, it is once again ordinary people who suffer its consequences. In such cases, the full weight of the Mediation Council and the international community should be brought to bear on the recalcitrant government, in much the same way as the apartheid regime was brought to its knees by international pressure.

Perpetuating the status quo cannot achieve the development needed in our village in the next century. It will make poor countries poorer, and rich ones richer, with all the resultant threats to world peace that this involves. We must create models of hope that will give the vast majority of people in the world a new chance. We have a responsibility as we prepare for the next millennium, in our global village, to ensure that all people have the same opportunity to reach their full potential.

For this is a kairos moment: we are at the doorstep of the next one thousand years in the history of humankind. The first Christians stood on the threshold of the first millennium in a state of hopelessness after the Crucifixion of Christ. But God raised him from the dead: hence our age is one of hope, an age of new beginnings, an age of the Resurrection faith. It is applicable to everyone, from the multi-nationals of business, to the multi-nationals of the Church. The opportunity to start anew must be seized. Through an act of immeasurable power and grace, let us grasp the nettle and reshape the world's economy.

In this way the third millennium can be a Jubilee celebration and the Risen Lord can help us understand his proclamation Behold I make all things new and challenge us to join him in bringing new life and new hope to a dying world.