Da Korogocho (Kenya): PASTORAL LETTER ON DEBT

["Kariobangi Catholic Church" <combonikario at clubinternetk.com> (by way of Alessandro Marescotti <a.marescotti at peacelink.it>)]

carissimi!! jambo!
eccovi finalmente la lettera dei vescovi kenyani dove abbiamo fatto
abbondantemente la mia nostra parte......siamo molto contenti....fatene
buon uso.....e' proprio all'interno della settimana per la cancellazione
del debito in kenya che stiamo portando avanti in questi giorni....e la
stampa siamo riusciti a captarla per vari eventi....oggi football
match  preti/imams/pastors  vs  civil society!!
tuko pamoja
daniele

ON THE BURDEN OF INTERNATIONAL DEBT
A Pastoral Letter of
The Catholic Bishops of Kenya

[May 17, 2005]

"Do not charge interest on a loan but fear your god and let your brethren live with you" (Lev 25:36)

1. Introduction

We, the Catholic
Bishops of Kenya, wish to share our concern with the Christians and all
the people of good will in our land. In the next months, many
international happenings are scheduled around the world. These meetings
will deal with important matters regarding our country, our continent
-Africa- and all the developing countries in the world. In July, the most
powerful countries, the so-called G8, will meet in Edinburgh, Great
Britain, and they will discuss the status of the international debt and
programs to reduce poverty in the South of the world. In September, the
United Nations (UN) will organize the Millennium Assembly to discuss how
to implement programs that will enable humanity to attain the Millennium
Goals, among them, the reduction of global poverty and the development of
a just world. Next December, the World Trade Organization (WTO) will
convene in Hong Kong for a new round of talks, to decide on important
regulation regarding international trade. We cannot forget that earlier
this year the World Social Forum met in Brazil and that trade ministers
from around the world met here in Kenya, in Mombasa, last March, to
prepare the WTO meeting of next December. Thus our country is not only
interested in these happenings. Kenya is part and parcel of the process
that could lead to a better world. We would like to share with you a few
reflections on the role each one can play to alleviate poverty and build
a just society.

2. Origin of International Debt

Before looking at our present situation,
we need to go back in time and understand why and how Kenya, like many
other African countries, is deeply indebted to the rich countries in the
world. At the end of World War II, the United States of America devised
the Marshall Plan. This plan foresaw donations and long-term loans to
European countries to finances their reconstruction and enable them to
modernise their industry. The Europeans were able to make good use of
these incentives and, in a short time, they became the privileged trading
partners of the United States. The latter, afraid that the financial
surplus thus created could lead to inflation, encouraged investment in
American companies abroad. By the early 1960s, European banks were
flooded with American dollars. At the same time, most African countries
were attaining their independence and needed funding to allow their
economies to grow and improve infrastructure. International banks started
to lend money at very low rates. Later, soon after the energy crisis of
1973, governments of Northern countries, faced with recession and mass
unemployment at home, decided to endow States in the South with credit
power regulated by bilateral agreements. In other words, a country in the
rich North would allow a country in the South to buy goods and services
from their industry and pay later on. In this way, employment and
production were given a lease of life in exchange of later payment from
third countries. Loans provided by the World Bank to finance
development projects are a third source of debt. Most of these loans were
underwritten in the 1960s; they still weigh heavily on the economies of
the South of the world.

3. Africa: a Continent in Debt

Today, all developing countries in the
World -Kenya included- have huge debts to repay. They owe money to
private companies, usually international banks, to Governments, and to
international institutions like the World Bank and International Monetary
Fund. By the end of 2004, external debt of Sub-Saharan countries stood at
US$ 231 billion. At the same time, the Gross Domestic Product of these
countries was just about US$350 billion. In other words, African
countries cannot pay back their debts and sustain development. Most
countries have to spend more than twenty percent of their revenues to
service the debt, i.e., to pay annual quotas of debt and the interests
generated so far. The debt has helped the recovery and growth of rich
countries, but denied the development of poor countries. This situation
goes hand in hand with other causes of stagnation and poverty. The G8
countries (Canada, France, Germany, Italy, Japan Russian, United Kingdom,
and the United States of America) keep asking the South to be opened to
free trade. They ask this while, at home, they heavily subsidize their
industrial and agricultural sectors. How can Africa farmers compete with
rich farmers in the North who receive government support and are so able
to sell their produce under cost? There are also local causes to the
growing unbalance in world development and poverty. In the past, funding
provided by aid and loans was often skimmed by corrupt officials,
misused in wrong investments, or directed to purposes different that
those for what they were provided. Corruption on the part of our
government officials and the lack of good governance are as much
responsible of today's poverty as external causes. We cannot denounces
the evil of foreign debt without accepting our responsibility for the
growth of poverty among us.

4. God Speaks to Us

In our
attempt to understand and present in its proper light the issue of debt
cancellation we need to turn to the Word of God. We would like to
focus the attention of all on the parable of the rich man and Lazarus,
found in the Gospel of Luke (16:19-31). The rich man can easily be seen
as representing the North, while poor Lazarus the underdeveloped South.
The rich man ignores Lazarus' plight. For this attitude of his, his name
has not been recorded while all know the name of the poor man:
Lazarus. 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: our names will not be remembered. The efforts at
debts cancellation that were 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 Word of God speaks frequently debt and cancellation of debt.
In the book of Leviticus, God calls on the people to forgive all
debts every fifty years. It is the jubilee of the Lord (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. 

Like some other parables, the one regarding the rich man and Lazarus is
not finished: what will happen in the end, what kind of stand will be
taken depends on each individual. Opening one's eyes on the poor man's
plight is possible for all generations and so it is for the present one.
The invitation that we launch to all is clear: let us learn to listen and
see! In this situation we would like to echo the words of the Holy Father
in his Post-Synodal Apostolic Exhortation Ecclesia in Africa. The
role of the Church is that of the Good Samaritan not only for the
peoples and nations of Africa (EA 41), but also for those
belonging to the affluent North on this particular issue. Being warned
about the unwillingness to cancel unjust debts means to be given a chance
not to end up like the rich man of the parable, who opened his eyes
all too late. At the same time, we convinced and we desire to
proclaim once more that God's mercy is for all, since he has written our
names on the palms of his hands (cf. Is49:15-16; EA 143). As God's
children we are all invited together to solve the problems of this earth,
without discriminating between rich and poor, but making sure that all
move together in the same direction.

5. Kenya: Struggling for Change

It is our responsibility as shepherds
to realize and help our flocks to understand that the external debt is
evil. However the Kenyan debt was contracted, today it is the cause of
oppression, of poverty, we dare say of neo-modern slavery. Kenya has
been the recipient of a cumulative total of 17 billion US$ in loans and
aid; this equals to 1,275 billion shillings, or an average of 40,000
Kenya shillings per each citizen. In spite of his huge amount of
money, Kenya has witnessed a progressive decline of its economy. Today,
the vast majority of Kenyans live below the poverty line, while a
small minority enjoys a life style higher than that of developed
countries. Debt servicing is hampering our struggle for development
and social justice. We should remember that the official poverty line is
placed at earning less than US$ 1 per day per person. We all know that
this limit is in itself a masquerade. No person can be expected to live
with less than 80 [Kenya] shillings per day, especially in our urban
areas where the cost of life is no lower than that of many European or
North American countries. To pay people according to the salary
structures applying to most of our workers is tantamount to exploit their
work in the pretence of legality. 

We should also underline that much of the aid we receive from donor
countries is not a donation toward development. More often than not, it
is a loan that must be repaid and adds up to the already huge debt our
country has towards the rich nations of the North. In his message for the
World Day of Peace 2005, His Holiness John Paul II told us that,
"The tragedy of poverty remains closely linked to the issues of the
foreign debt of poor countries. Poor countries remain trapped in a
vicious circle: low income and weak growth limit savings and, in
turn, weak investments and an inefficient use of savings do not favour
growth". "This need is clearly seen when we consider the
many difficult problems standing in the way of development in Africa:
numerous armed conflicts, pandemic diseases aggravated by extreme
poverty, and political instability leading to widespread insecurity.
These are tragic situations which call for a radically new
direction for Africa: there is a need to create new forms of
solidarity, at bilateral and multilateral levels, through a more
decisive commitment on the part of all, with complete conviction that the
well-being of the people of Africa is an indispensable condition for the
attainment of the universal common good". (Message for the World
Day of Peace 2005, #8 and 10) 

top

6. Is it Just to Call for Debt Cancellation?

Debt becomes an ethical issue when it poses a
major obstacle to the full enjoyment of human rights. In as far as debt
servicing reduces people to poverty while its creditors determine Kenya's
political, economic and social destiny, then debt is essentially a human
rights issue and a moral concern for a Christian. We have to ask
ourselves: why should the poor in our country, who have nothing to say
about accruing the debt and have received little or no benefit from it,
have to bear the greater burden of its payment? The grand total of
Kenya's public debt is, in our view, unsustainable in as far as the
country is left with insufficient funds to meet its human rights
obligations, especially in relation to the Millennium Development Goals.
We reject the narrow criteria used in the international Monetary Fund
Debt Sustainability Analysis Framework. This approach only compares
external debt to exports and does not seem to include domestic debt as
part of a country's financial predicament. Yet, Kenya's internal debt
is considerable - accounting for 45 per cent of the country's total
outstanding debt -and it is foreign debt-related: we interpret it as our
government' attempt to cover the gap in its balance of payments created
by foreign debt servicing. 

Poor management of the resources and especially those related to the
public debt has been accompanied with chronic corruption in our country.
In 1999, we analysed what we then termed: 'the paradox of Kenya's
unrealised economic potential'. (Kenyan Bishops, 1999 'The Economy of
Kenya' in AMECEA Documentation Service, ADS 11-12/1999 No. 502,
1st July 1999 Nairobi: AMECEA). We persistently continue to
call on our governments to establish democratic structuresand just
policies in order to deal with famine, wages, working conditions,
exploitation, conflict and insecurity. We remind our political leaders in
particular that to deny Kenyans a new constitution indirectly amounts
to denying their fellow-citizens their right to life. As far as
Kenya's debt is concerned, it is estimated that 90 per cent of all the
items included in the Public Debt Hedge Book could be illegitimate,
odious and fraudulent (Obonyo, R.O., 2005 The Cripping Debt Burden,
Research on Kenya's Current Debt Situation, Paper Presented by Pro.
Obonyo - University of Nairobi to the Kenya Debt Relief Network -KENDREN,
Unpublished. If odious, a country is not obliged to pay the debt under
international law). If true, Kenya is not obliged to pay this kind of
debt under international law. 

At the same time, we reject the notion that the poor economy is solely
the result of poor governance and rent-seeking. Even if all Kenyans
were hardworking people, living together peacefully and governed by
virtuous leaders, they would still be poor because of debt service
payments. We believe Hon David Mwiraria, Minister for Finance, when
he stated in his budget speech 2003/2004 that the debt service continued
to squeeze essential expenditures out of the budget. Debt servicing was
Kenya's single largest budgetary item in the budget 2003/2004 accounting
for 32 per cent of the entire budget -more than the country spent on
education and health combined. This kind of debt is a matter of
contractual or commutative justice: a legally enforceable contract is not
necessarily a morally just one. To be just an agreement must also ensure
social cohesion, peacefully co-existence between nations, and their
common development (Pontifical Council "Cor Unum", 1999
World Hunger a challenge for all: Development and Solidarity, #26).
Whereas austerity measures geared towards debt servicing put the heaviest
human cost on our poor and failed to turn Kenya into a paradise, banks
in high-income countries have seen their outstanding Third World loans
drop. For them the IMF did a good job. These banks have further taken
adequate measures to absorb losses that might result form default on the
part of any single large debtor. Here we say that the burden of the debt
crisis must be shared by all. Commercial banks, though not Kenya's
main creditors, can no longer be permitted to pass on their losses to
Kenya taxpayers. 

Visible damage has already been done. Together with all the
bishops of Africa and Madagascar we see a clear link between the HIV/AIDS
pandemic and poverty (Symposium of Episcopal Conference of Africa and
Madagascar -SECAM, 2003, The Church in Africa in Face of the HIV/AIDS
Pandemic, 'Our Prayer is Always Full of Hope", Message issued by
SECAM, 7th October 2003, Dakar). It is also no coincidence
to hear the Holy Father speak about the Africa debt on a World Day of
Peace. Obviously, this vicious circle of debt, poverty, disease and
conflict in Africa needs to be broken. We applaud the willingness of the
International Financial Institutions and some G8 countries to take new
measures to cancel Africa's debt erodes the international common good. On
the other hand, we realise that the cancellation of debts will not
transform by itself the historical/ factorial/ structural inequalities
between the nations of the world. The outcome of a sports contest between
a world-champion and a beginner is predictable even if the rules of the
game are fair and equally applied. The failure to bring about
international social justice is not just a technical or political
mistake; it is a failure of solidarity (John Paul II, On Social
Concern -Sollicitudo Rei Socialis -Washington, D.C: United States
Catholic Conference, 1986, no. 23). Moreover, mechanism should be put in
place to monitor our governance's spending and encourage accountability
and transparency. We will also have to work towards a clear shared vision
on development in our country.

7. What We Want to See Happening

We expect the Governments of creditor countries to implement the total cancellation of the debt owed by Kenya, relax restrictive monetary policies and encourage imports from the developing world; when pursuing macroeconomic strategies to keep in mind that the ability to repay debts and attract private investor capital is co-determined by the level of global and domestic interest rates;

We remind the industrialised countries of their promise to spend 0.7 per cent of their GDP on Official Development Aid;

We expect the international Financial Institutions to provide sufficient financial liquidity and policy flexibility so that Kenya can make the necessary adjustments without further sacrificing growth and equity;

We expect commercial banks, in the high-income countries to apply principles that protect basic human rights in the least developed countries;

We expect the National and International Banks to favour the poor and be pro-development in their business transactions, not just profit oriented;

We encourage the Government of Kenya to cooperate with interested parties toward the cancellation of its external public debt;

We expect the Government of Kenya to provide leadership and let out nation's standing in the world be based upon transparency, accountability and genuine concern for the poorest; 'lack of capacity' can be no excuse for a government's allowing others to determine the destiny of our nation;

We request the government to do whatever is possible and drastically reduce the domestic debt. We call on the people of Kenya to ensure that proper monitoring will be in place and facilitate a transparent use of development funds.

We demand that all those people, most so the Kenya citizens who have siphoned some government funds and are now hiding them is some personal accounts abroad to return it back with apologies to the nation.

We call on all people of goodwill to help restructure the entire international trading and financial system. We ask them in particular to help create a fair and transparent arbitration process framework.

After doing all what is humanly possible, we must turn in trust to our Lord and Saviour to bless Kenya and its peoples.

Signed by all catholic Bishops of Kenya:

1. Rt. Rev Cornelius Arap Korir - Bishop of Eldoret/Chairman, Kenya Episcopal Conference
2. Rt Rev Peter Kairo - Bishop of Nakuru/Vice Chairman, Kenya Episcopal Conference
3. Most Rev. R.S Ndingi Mwana a Nzeki - Archbishop of Nairobi
4. Most Rev John Njenga - Archbishop of Mombasa
5. Most Rev Zacchaes Okoth - Archbishop of Kisumu
6. Most Rev Nicodemus Kirima - Archbishop of Nyeri
7. Most Rev John Njue - Coadjutor Archbishop of Nyeri
8. Rt. Rev Philip Sulumeti - Bishop of Kakamega
9. Rt. Rev. Ambrose Ravasi - Bishop of Marsabit
10. Rt. Rev Paul Darmanin - Bishop of Garissa
11. Rt. Rev. Joseph Mairura Okemwa - Bishop of Kisii
12. Rt Rev. Boniface Lele - Bishop of Kitui
13. Rt. Rev Philip Anyolo - Bishop of Homa Bay
14. Rt. Rev Luigi Locati - Bishop of Isiolo Vicariate
15. Rt Rev. Alfred Rotich - Bishop of Military Ordinariate
16. Rt. Rev. Maurice Crowley - Bishop of Kitale
17. Rt Rev. Norman King'oo Wambua - Bishop of Bungoma
18. Rt Rev. Peter Kihara Kariuki, IMC - Bishop of Murang'a
19. Rt Rev. David Kamau Ng'ang'a - Auxiliary Bishop of Nairobi
20. Rt Rev. Anthony Mukobo, IMC - Auxiliary Bishop of Nairobi
21. Rt Rev. Patrick Harrington - Bishop of Lodwar
22. Rt. Rev. Francis Baldacchino - Bishop of Malindi
23. Rt Rev. Virgilio Pante IMC - Bishop of Maralal
24. Rt Rev. Salesius Mugambi - Bishop of Meru
25. Rt Rev. Cornelius Schilder - Bishop of Ngong
26. Rt Rev. Luigi Paiaro - Bishop of Nyahururu
27. Rt Rev. Emmanuel Okombo - Bishop of Kericho
28. Rt Rev. Martin Kivuva Musonde - Bishop of Machakos
29. Rt Rev. Anthony Muheria - Bishop of Embu

May 17, 2005

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