Our U.N. NGO Representative, Sister Jean Stoner, SND, spoke at the High Level Dialogue on Financing for Development at the United Nations in October 8. Following is her thoughtful speech.
Rio +20 and Post-2015 discussions have placed before the global community a urgency about finding solutions to our dire global financial situation, and we are responding with a renewed call for debt cancellation, including the elimination of all harmful policies connected with debt, on behalf of the poorest and most heavily indebted countries.
As we know, debt crises damage member states’ ability to meet their social obligations. Debt servicing necessarily means that fewer funds are available to fight poverty and meet Millennium Development Goals. We concur with General Assembly Resolution A/RES/67/198 (#16, p. 5) which recognizes that impoverished countries repaying debts to wealthy nations leaves them unable to provide basic services to their people.
Debt relief works! According to follow-up studies conducted by Jubilee USA, its partners, and the World Bank, debt cancellation offered opportunities for national and local governments to become more self-determining in their economic policy development. Many countries (Tanzania, Liberia, Nicaragua, Burundi and Ghana, to name a few) used monies for social service programs, healthcare, and education thus enabling them to make progress toward targeted areas in the Millennium Development Goals.
We also call for a fair, transparent and independent sovereign debt workout mechanism to address the destructive burden on developing countries that are repaying odious and illegitimate debts. This would require lender and borrower to negotiate terms of agreement. The debt workout mechanism must not only apply to past debts but must also ensure that debts currently being incurred are better managed. This requires more responsible behavior by both lenders and borrowers. Norway is leading the way with its first-ever independent audit of outstanding debts owed to it by developing countries.
Lastly, we applaud the UNCTAD draft principles for responsible borrowing and lending. These international standards, when implemented, will prevent debt crises and contribute to more financial stability and economic growth for member states and improved conditions for their people.
We believe that justice dictates that economic policies should be judged by their impact on those living in poverty and on the environment. When the dignity of the human person and care of the environment are no longer threatened by debt, real progress toward a just global economy and peace may begin to flourish. Debt cancellation, sovereign debt workout mechanism, and principles for responsible borrowing and lending may assist in offsetting some negative trends, such as tax havens, vulture funds, indiscriminate lending, and protectionist policies. Moreover, we recognize that these solutions alone will not be the only measures needed to assist the heavily indebted countries toward economic solvency but they can be instrumental in establishing a human rights approach toward more equitable economic stability.