Weekly News Update on the Americas Issue #490 | June 20 1999 Nicaragua Solidarity Network of Greater New York CSN Home | WNU Home | This Month's News

Contents:

8. Rich Countries Forgive Some Debts
9. Protesters Unimpressed by G8 Debt Forgiveness

*8. RICH COUNTRIES FORGIVE SOME DEBT

On June 18 the Group of Eight (G8)--the seven richest industrialized countries (Canada, France, Germany, Great Britain, Italy, Japan and the US) plus Russia--agreed on a plan for forgiving some 40% of the debts of 36 to 41 of the world's poorest countries if they agree to implement a series of neoliberal economic measures. The largest number of beneficiaries would be in Africa, but four Latin American nations are affected: Bolivia, Nicaragua, Honduras and Guyana. The decision, which US president Bill Clinton called an "historic step," was taken on the first day of the annual World Economic Summit, held from June 18 to June 21 this year in Cologne, Germany.

The plan would cancel a total of about $70 billion of the $201- 230 billion owed by the poorest countries, about 8% of the debt of the 160 developing nations, or 1-2% of the total "Third World" debt. Some of the poorest nations are allocating as much as 60% of their gross domestic product (GDP) to debt repayment. German chancellor (prime minister) Gerhard Schroeder explained: "It's not a question of money that could be recovered. This is about longterm credits, loaned a long time ago to countries so poor that the whole world knows they'll never have the money to pay. But something has to be done, because otherwise these countries won't be able to form part of the world market, because they'll never be able to recover." [Clarin (Buenos Aires) 6/19/99; New York Times 6/19/99]

Some $21 billion in bilateral loans are to be forgiven; this would fall most heavily on Japan (44.3%) France (24.6%) and Germany (14.8%). Much of the debt to be written off--nearly $40 billion--would come from loans granted by international institutions like the World Bank and the International Monetary Fund (IMF), which is expected to cover any shortfall by selling gold reserves. Gary Mead, researcher for the World Gold Council, said that the sale of IMF gold would lower world gold prices, costing gold-producing countries some $150 million a year and hurting Ghana and Mali, which are among the intended beneficiaries of the plan, according to Mead. [Vanguardia (Spain) 6/19/99; El Pais (Madrid); El Nuevo Herald (Miami) 6/19/99 from Bloomberg News]

On June 17, a day before the G8 meeting began, a session of the International Labor Organization (ILO) in Geneva adopted a treaty against compulsory child labor. The treaty, passed unanimously by the 174 member countries, was backed by the richest nations; Clinton supported it in a speech to ILO delegates on June 16, the first time a US president addressed the organization. But Great Britain, the US and other countries blocked a proposal to ban recruitment of minors under 18 into military service; the US allows 17-year olds to volunteer for its armed forces. Many developing nations opposed a proposal to make the term "worst forms" of child labor include work which deprives children of an education. Instead, the "worst forms" are defined as slavery, forced labor, child prostitution and pornography, use in illegal activities like drug trafficking, and work which endangers a child's health, safety or morals. The ILO estimates that 50-60 million children work in dangerous conditions in developing nations. [NYT 6/18/99; Financial Times (UK) 6/25/99]

*9. PROTESTERS UNIMPRESSED BY G8 DEBT FORGIVENESS

Critics of neoliberal policies indicated that the G8 debt forgiveness plan and the ILO treaty against child labor were half-measures meant to weaken grassroots movements against sweatshops and demands for a broader debt-relief program. Oxfam, a non-governmental relief agency, noted that the $70 billion figure is inflated, since it includes $25 billion the G8 nations had previously agreed to write off. [Vanguardia 6/19/99]

In the US, critics focused on the Clinton administration's efforts to revive "free trade" bills it was pushing in March [see Update #475], before the 10-week US-led bombing campaign against Yugoslavia. Clinton announced the US commitment to the child labor treaty on June 12 in a speech to graduating University of Chicago students. He used the same speech to renew a call for "fast track" authority to negotiate international trade agreements without congressional interference. [Washington Post 6/13/99] On June 10 the US House Ways & Means Committee was planning to move two free-trade bills forward towards a vote: the Africa Growth & Opportunity Act (AGOA, aka "NAFTA for Africa") and the Caribbean Basin Initiative (CBI) parity bill. The DC- based 50 Years Is Enough Network described the process as "sneaking through another free-trade, neoliberal bill." [Labor Alerts (Campaign for Labor Rights) 6/8/99]

Hundreds of demonstrators took to the streets of Geneva on June 15 to protest the arrival of Clinton to address the ILO the next day. [Agencia Informativa Pulsar 6/16/99] Around 450 representatives of peoples' movements from 10 countries the South and East were due to arrive in Cologne on June 17 to join protests against the G8 meeting. The Inter-Continental Caravan for Solidarity and Resistance was initiated by grassroots farmers' groups in India but includes representatives of the Landless Rural Workers Movement (MST) of Brazil, the Zapatista National Liberation Army (EZLN) of Mexico, Chilean indigenous groups and the Afro-American Network, among others. The caravan arrived in Europe on May 22 and has been taking part in demonstrations and meeting with European grassroots organizations. [People's Global Action (PGA) press release 6/16/99]

Demonstrators marked the opening of the G8 summit in Cologne on June 18 by marching through the city with a "golden cow" decorated with the US and German flags. The next day, the Jubilee 2000 Campaign presented two truckloads of petitions calling for full debt forgiveness, signed by 17,099,748 people from around the world. Honduran archbishop Oscar Rodriguez and rock singer Bono of the Irish group U2 symbolically presented them to Schroeder. At the same time, 35,000 people chanting "Forgive the debt" formed a human chain around the Ludwig Museum, where the G8 was meeting. [Clarin 6/19/99, 6/20/99] [The Inter-Continental Caravan participated "critically" in the human chain; the caravan's position on debt forgiveness does not "accept any relation between the peoples of the South and those debts, and calls for disobedience and disrespect towards those responsible: multilateral financial institutions, Northern banks and corrupt governments (most of which are controlled by Western powers)." [PGA press release 6/16/99]]

Other protests against the G8 meeting took place on June 18, many of them organized by Reclaim the Streets (RTS), a loose international network opposing restrictions on public spaces. In London up to 10,000 demonstrators joined in a "Carnival Against Capitalism" in the financial district, mingling cheerfully with bankers and stockbrokers. Later a few hundred protesters battled with police agents, shut down the London International Financial Futures and Options Exchange and smashed windows with scaffolding poles. Fifteen people were arrested and at least 38 people required medical treatment. [Financial Times 6/19/99; Reuters 6/18/99]

More than 100 activists joined in Boston's Carnival Against Capital, passing out thousands of fliers in the city's financial district while a street theater troupe enacted a debate between a Mexican rebel and representatives of the newly merged "FleeceBoston" bank. [Boston Encuentro report 6/18/99] In New York, hundreds of protesters halted traffic briefly as they unsuccessfully tried to hold a street party on Wall Street; more than 20 were arrested. At least 450 protesters marched through San Francisco's financial district without incident. "We are here to throw some sunshine on these [corporate] institutions," said Juliette Beck of Global Exchange, a San Francisco-based human rights group. "They are like Draculas. Bring them out to the sunlight and they will wither away."[Reuters 6/18/99]