"The Good, the Bad, the Ugly: Globalization, Debt, Sanctions"
Speech to City Club, Portland Oregon

March 17, 2000

Rodney I. Page

Most of you in the audience today—unless you were a child when the Berlin Wall fell in 1989—have felt the chill of the Cold War era.   You remember how the Cold War climate affected almost every facet of life.   schools taught more math and science as the nation became anxious about the space race.   Members of our families served and died in distant wars between the two titans, Democracy and Communism.   The military industrial complex provided jobs for many of us.   And a portion of the taxes we paid went to shore up political leaders around the world who were deemed to be “pro-Western.”   The popular press, radio and TV were permeated by the Cold War—right down to the cartoons watched by children.   Remember the cartoon episodes that pitted Rocky and Bullwinkle, the American squirrel and moose, against Soviet spies Boris Bad-Enough and Natasha? 

It has now been a decade since people took hammers to the Berlin Wall, chipping off souvenirs of a era that seemed to come to such an abrupt halt.   In reality, global market forces had long been pressing against the Wall and all that it symbolized, but, in the last decade, the global economy has come into our consciousness in a new way.   The global economy has replaced the Cold War as the dominant dynamic of international affairs.    National security has been redefined in terms of economic competitiveness and public polices are now fashioned with the aim of making the United States a winner in the world economy.

We would do well to pay attention to this new dynamic and to understand its economic and environmental impact not only on our own lives and on our families, but on all the world’s people.

Yesterday, the Cold War rigidly divided the world into “friend” and “enemy.”   poised on the brink of nuclear war as we were, it took great acts of courage and imagination to cross the gulf that divided us.   Today we have instead the sprawling networks of the global economy that purport to link the world in an era of unprecedented economic growth.   But in fact a growing gap between rich and poor is creating a gulf between peoples as deep—and as dangerous to true world security—as any we knew during the Cold War.   We need the courage and the imagination to bridge that divide now.

In the short time I have with you today, I wish to raise some cautions about the burgeoning global economy and to endorse some prescriptions based on my experience and that of my organization, Church World Service.   It is the international humanitarian relief and development arm of the National Council of the Churches of Christ in the USA.

So how is the global family faring in this new day?   The 1998 report of the organization Bread for the World put it very succinctly: “The market-oriented global economy creates great wealth for a few, provides benefits and reduces hunger for many, while increasing hunger, misery and insecurity for many others.”

We hear much about the plus side of the global economy.  For example:

· There is no doubt that globalization has raised the living standards of millions, including many poor people.

· The global economy creates new jobs in poor countries whose most abundant resource is low-cost labor. 

· Poor nations have gained access to rich-country markets.

· The goal of economic competitiveness requires a continual investment in human resources through better education and health care.

· Many consumers enjoy more choices, better quality and lower prices than ever before.

· And greater income from trade provides at least the possibility to help those adversely impacted and to improve the lives of those who do not directly benefit.

Indeed, when looked at in aggregate terms, the global economy has brought blessings.   On average, infant mortality is lower, people live longer and are better educated than 25 years ago.

However, while economic indicators have risen overall, the share of wealth accruing to the world’s poorest countries and poorest people is small and is decreasing.   Whether measured in world trade, private investment, or aid dollars, the growing disparity between rich countries—primarily in the northern hemisphere—and poor countries in the South, translates into massive losses in human potential and poses long-term threats for international stability and for democracy. 

Truly alarming statistics from the UN Conference on Trade and Development outline this trend:  According to this UN agency, “In Africa, where the gap has been widening over the last three decades, average per capita income is now only seven percent of that of [advanced countries].   In Latin America, the change is even more abrupt; average per capita income has fallen from over one-third of the northern level in the late 1970’s to one quarter today.   The middle strata of the developing countries—with incomes between 40 and 80 percent of the average in advanced countries—are thinner today than in the 1970s.”

No doubt about it.   There is a down side to the global economy.  Yes, globalization has increased the living standards of many.  And, equally true, it has brought untold misery to others who struggle desperately to survive but whom  economic forces have left behind.

How deep is this misery?   Imagine the suffering of people in over 100 developing countries today that have experienced disastrous failures in economic growth and continuing cuts in living standards.   Right now there are 1.3 billion men, women and children who survive on less than a dollar a day.

The downside of globalization includes several problems that stem from the inequality and inequity resulting from the continued dominance of the system by powerful nations.   We find erosion of workers’ rights, as workers are played off against each other across national boundaries, and as human rights are traded off for profit or relinquished in desperation. 

 Other minus signs on the global economic ledger include these:   food insecurity within countries that rely increasingly on export crops.    And environmental losses for short-term gains. 

We also find the most empty and meaningless kind of consumerism among individuals when commercial values dominate cultural values.   And at the societal level, we must look askance when governments and organizations of civil society lose power to corporations.

I will not argue the fact that economic growth generally leads to a reduction in poverty.   But the exceptions are numerous enough—and the frequent side effects serious enough—to dispel early or unqualified endorsement of open trade as a panacea.  Economic growth is a necessary but not a sufficient condition for reducing poverty and hunger worldwide. 

What then can be done?   Is there a lack of ideas for solving this problem?    Not at all.   Workable and affordable strategies abound to reverse the staggering statistics of poverty that I have cited.   Rather, it is urgent that these social, economic and political initiatives be mobilized for the well-being of poor and hungry people.   In doing so, we may find that many people who feel manipulated by impersonal market forces will welcome new ways to join together in efforts toward the common good.  

I have seen some of these initiatives in action.   For over four years it has been my privilege to travel around the world on behalf of Church World Service.   I have seen with my own eyes and experienced with all my senses the untenable conditions under which the poor live in Kenya, Thailand, Cambodia, Vietnam, Indonesia, Pakistan, Afghanistan and many other places.   I have seen people struggle to maintain dignity amid the stench, filth and general oppression of their surroundings.   And I have seen programs that give them hope.

One of my first trips after being appointed director of Church World Service took me to Bangkok, Thailand and to Jakarta, in Indonesia, where many thousands of people live in shacks next to open cesspools.   Thailand and Indonesia were juggernauts of the economic revolution that brought new prosperity to Southeast Asia.   But not everyone prospered.   Amid the gleaming high-rise office towers, I saw the hovels of workers who toiled in slave-like conditions.   With Jack Danford, our CWS director in the region, I walked among the poverty-stricken people and—I shall never forget this—I saw that Church World Service was there .   Through civil and human rights programs that support people who confront injustice.   Through micro-enterprise programs that provide no-interest loans so that poor people can start small businesses.   Through programs for children and young people that help develop a sense of self-worth and respect for all.

Later when Indonesia’s economic miracle collapsed, CWS was there with a food-for-work program.   I wish you could have been with me in Sulawesi, Indonesia to see this program at work.  Through our partner, the Council of Churches of Indonesia, we identify work projects that will build up the food security of the nation, employ persons in these projects and pay their wages in rice, supplied to us by the U.S. government. Thousands of people in Indonesia have enough to eat because they participate in this program.

I also wish you could have been with me in North Korea, a land where crops have been devastated, first by two years of floods and then by drought.   Here, Church World Service, other non-governmental organizations and the World Food Program have delivered thousands and thousands of tons of grain and seed potatoes to ease the plight of a people suffering an acute food shortage, as well as sending life-saving medicines, medical equipment and blankets.   Church World Service participated in this effort as an act of solidarity with people in need, no matter what ideology they may live under. 

I should add that we were effective partners in this aid effort in large measure because of the contacts and relationships of trust that we had already established with the Christian community in North Korea.    Since the mid-1980s, Church World Service and the National Council of Churches have actively worked in partnership with Christians in both North and South Korea in order to maintain North Korea’s relationship with the world community, with the goal of ending long years of severe isolation.    We know that the NCC’s 1986   policy statement on Peace and the Reunification of Korea influenced the U.S. government to move forward with a process of constructive engagement with North Korea, that, among other things, has made some exchange programs feasible.   Our visits to church leaders there and reciprocal visits to the United States have been among the few precious windows to the outside world available to our North Korean brothers and sisters.   Perhaps it is neither possible nor appropriate at this moment to speculate about the economic direction that North Korea will take in future years.   But we have witnessed—first-hand—changes in that nation’s political and economic policies that have led to greater openness.

As a faith-based organization, We have sought to meet human need and to maintain church-to-church and people-to-people relationships for many decades, long before the term “global economy” was popularized.    and we continue to uphold these core values in the new era in which we find ourselves.  Our work in North Korea has demonstrated the wisdom of this approach.

I wish as well that you could have been with me during Holy Week and Easter 1998 when I helped deliver $300,00 worth of medicine to three children’s hospitals in Baghdad, Iraq.   Because of nearly 10 years of United Nations and U.S. sanctions, much needed food, medicine and a host of other items are either in short supply or non-existent.   The hospitals were in deplorable states of deterioration for lack of the means to repair them.    Even chlorine to use as a cleaning agent was unavailable.   Most heart-rending of all is the shortage of basic items like antibiotics or needles and syringes.    During my visit, I witnessed a two-month-old infant girl die simply because of the lack of an appropriate antibiotic.    Her mother, her doctors and her nurses stood helplessly by as her life slipped away.

According to data from the United Nations Children’s Fund, 25% of children in Iraq under age five are malnourished, leading directly to the deaths of 4,500 of them every month.   It is estimated that 1 million to 1.5 million persons in Iraq may have died over the past 9 ½ years due to the sanctions.   Sanctions can be perceived as the ultimate weapon in relationship to the global economy.

No doubt that the government of Iraq shares responsibility for this unconscionable situation.  But the nations of this world, and especially the U.S., cannot evade their moral culpability in the suffering of powerless and vulnerable people.   The last two heads of the UN humanitarian assistance program in Iraq, Denis Halliday and Hans von Sponeck, have both resigned in protest over the continuation of sanctions against Iraq, followed most recently by Jutta Burghardt, director of the World Food Program in Iraq.   All have denounced the sanctions as politically ineffective and morally wrong.   For this reason, Church World Service has provided not only millions of dollars worth of direct relief assistance to the suffering people of Iraq, but also has urged an end to the economic sanctions so that Iraqis can begin to return to a semblance of normal life. 

These glimpses of life in Thailand, Indonesia, North Korea and Iraq are just a few stories that could be told by Church World Service and its ecumenical partners around the world.   We are at work together in more than 80 countries, providing help and hope to millions of people and we have been at this task for more than 50 years.    It is with the benefit of this wide perspective and depth of experience that we at Church World Service have come to some conclusions about the best ways to make our global economy a more fair marketplace for all people.   I would like to highlight three of them.

I have already alluded to the good that can come from appropriate partnerships between government and NGOs.   There are times of course, when we must criticize government actions—as we do on the Iraq sanctions question.   At other times and places—such as the food for work program in Indonesia that I described—the combination of government aid and NGO “know-how” and contacts “on the ground” can create a life-saving synergy. 

I want to go on to speak of two other major ways to improve our global economy: debt forgiveness and an increase in international aid.

One action that can be taken this year is to cancel the debt of the world’s 41 poorest countries.   Church World Service has joined many other groups in supporting the Jubilee 2000 campaign—a world-wide movement to cancel the crushing debt of poor countries by the end of the year 2000.   This campaign was named for the biblical concept of jubilee, an Old Testament call for every 50th year to be a time to correct the unjust accumulation of wealth.   In the year of jubilee, the land is to rest, properties are to be returned to their original owners, and all debts are to be canceled.

We believe that such a correction is desperately needed today when 1.5 billion people live in poverty, nearly half of them children.   It is indicated when, for example, sub-Saharan countries spend more each year repaying debt than they do on all primary education and health care. 

Jubilee is the solution for developing countries whose debt makes it nearly impossible for them to escape poverty   Despite years of payments, debt levels have only increased, due to compounded interest and loan rescheduling.   Today the 41 poorest countries owe more than $223 billion, mostly to financial institutions such as the World Bank and the International Monetary Fund.   They are only able to make about half of their payments each year.   A UN report states that “even with the best economic policies, highly indebted countries will never be able to escape debt without debt forgiveness.”

The success of Jubilee 2000 could literally be measured in the human lives that would be saved.   Sub-Saharan Africa, one of the hardest hit regions, spends $13 billion on debt payments annually.   UNICEF believes that $9 billion  invested in social development projects would save the lives of 21 million people—most of them children.  

This moral imperative for debt relief also makes good common sense.   For example, there is a direct relationship between the debt and rampant deforestation, which contributes to global warming.   This occurs as governments sell off their natural resources and chop down their forests to plant cash crops to earn foreign currency.   The drug trade is protected in many countries because it provides valuable foreign currency for their interest payments.   And the US is losing out on future markets of hundreds of millions of people who, so far, remain unable to secure the basics of life, much less buy products made in America.    Because the U.S. expects to collect only a fraction of the value of the original loan, the debts can be written off at a significant discount.   The cost to the U.S. of these debt relief initiatives is approximately $1 billion over four years, which would leverage nearly $100 billion in debt relief for poor countries.

Debt cancellation is critical, too, for countries devastated by natural disasters.   Honduras and Nicaragua, where Hurricane Mitch has dealt a crushing blow to development efforts, and now Mozambique, which has been battered by a series of storms, are all highly indebted and impoverished countries.   Even though Mozambique has received some debt relief already, at the time the storms hit, it was paying $1.46 million a week in debt services.   Imagine the benefit if this could be redirected to reconstructing Mozambique’s shattered infrastructure instead!

The human cost of international debt has become a moral concern for millions of U.S. citizens.   Over the past two years, organizations and individuals across the country have sought to address this concern through study groups, worship services, local events, petition campaigns, letters to the editor and contacts with public officials.    All this has brought the debt issue from almost total obscurity to the level of a national crusade.

Last summer in Cologne, Germany the leaders of the G-7 nations agreed to expand an already existing debt relief measure and to ensure that it includes a focus on poverty reduction.   President Clinton subsequently submitted a supplemental budget request to Congress that would provide almost $1 billion for the US share of bilateral and multilateral debt cancellation that would result from this initiative.   Congress approved part of this request last November, but Clearly more work is needed in this area.

In addition to debt cancellation, Church World Service urges our government to step up its aid to poor countries.    We deplore the current trend in our nation that has actually reduced the United States’ foreign aid budget, despite a federal budget surplus.

We in the private sector take seriously our responsibility to respond to people in need globally.   However, sometimes our efforts are not enough.   The need is often so great, the devastation so extreme, that official government response is critical.   These continued reductions in disaster and development assistance programs have serious and devastating effects on real people overseas, while increases could make a tremendous difference – at a relatively low cost to the United States.

This concern has its roots in our convictions about the kind of world God wills.   The Prophet Isaiah reminds us of God's intent: "I am making a new earth and new heavens... No more shall the sound of weeping be heard in it, or the cry of distress.    Babies will no longer die in infancy, and all people will live out their life span...."   The God we strive to follow is one who hears the cry of his suffering people and promises to deliver them; a God who inspires people to dream about how things could be different and better.   Such a theology leads directly to public policies and laws based on justice and compassion.

The challenge is to create and sustain national and international policies that express these values.   Our government's foreign assistance program is directly tied to that task. 

YET The United States has now fallen behind Japan, Germany and France in terms of actual dollar amounts of assistance given to less developed nations.   In terms of GNP, we now spend less on helping the poor overseas than any other of the world's 21 wealthiest nations.   Last year, one-fourth of all U.S. foreign aid went to high-income nations, at a per capita expenditure of over $5 per person for the 638 million people living there.   In contrast, the 3 billion living in the world's poorest countries received the equivalent of only 96 cents per person.   Of this assistance, almost half went to military or security assistance.   In overall terms, less than one percent of the Federal budget is spent on foreign aid, and less than half of that goes to development and humanitarian programs that help millions of the world's poorest people.   This situation is inexcusable for a nation that considers itself a world leader. 

These assistance programs really do make a difference.   Foreign aid improves standards of living, promotes stable economies, protects the environment, and can prevent the need for continual disaster response.   Foreign aid also prevents starvation, but in recent years in Sudan for example -- where the U.N. estimated that 1.2 million people were at risk of death by starvation -- food distribution centers were unable to provide hungry people with the full rations they need to survive due to shortfalls in international giving. 

Increases in U.S. foreign aid makes a critical difference in such instances and can often alleviate civil conflict and/or drought conditions that precede full scale famine.

Finally, foreign assistance helps the people in the U.S. too.   It keeps U.S. citizens healthier and reduces our health costs through contributions to international health agencies which help to detect, prevent and contain the worldwide spread of highly contagious diseases – including AIDS, tuberculosis, cholera and the Ebola virus.    When "the other side of the world" is now just an airplane trip away, the U.S. cannot afford to turn a blind eye to health emergencies in other countries.   Epidemics have the potential of spreading worldwide overnight.   This assistance also has a direct effect on the U.S. economy.    From 1990-1996 U.S. exports to developing countries grew by $115 billion, supporting an additional 1.5. million American jobs.   Almost all of the developing countries that are among the top 50 purchasers of U.S. exports are those in which we have made major investments in education and training. 

Surely a nation with our proud history can afford to be more generous to those in need.   We live in an increasingly integrated world community, where issues such as health and the environment affect us all.   We must look to the well-being of all citizens of the world for our own good as well as theirs.

While resources for development assistance are declining, U.S. policies and programs to support market development and the private sector in developing countries are currently expanding.   There is an urgent need to ensure that these latter efforts are consistent with the overriding goal of people-centered development.   The importance of involvement of the state, market institutions and civil society in bringing about equitable sustainable development is now widely recognized.   Each has an essential role to play in the development process and one cannot substitute for the other. 

For example, while there is increasing support in Congress and the Administration for trade and investment, neither sub-Saharan Africa nor Central America will be able to attract sufficient private investment without dramatic improvements in the regions' physical and social infrastructure.   High levels of indebtedness are seen as a disadvantage to potential investors, and great attention is needed particularly in the areas of health and education.   The African continent is being devastated by epidemics, including the AIDS virus, and no stable economic environment can be created without addressing this crisis in the process.

In a world of 800 million hungry people, the need for official development assistance has not diminished with the expansion of private capital flows to a handful of developing countries.   The United States should commit to greatly expanded funding for sustainable development.

I began this talk by speaking of our very human tendency toward division, which in the age of the global economy has heightened the tension between rich and poor.  I would like to close by suggesting that all of us are impoverished when people anywhere go hungry and to call on the words of Jean-Bertrand Aristide, the first democratically elected head of state of Haiti, one of the world’s poorest countries.    In a soon-to-be-released book, Aristide says:

“…Among the poor, immeasurable human suffering … among the others, the powerful, the policy makers, a poverty of spirit which has made a religion of the market and its invisible hand.    A crisis of imagination so profound that the only measure of value is profit, the only measure of human progress is economic growth.”

As a person of faith, I take that message to heart.    As a description of our world it is deeply troubling.   As an analysis that points to the spiritual nature of the problem that faces us, it tells us that each of us have within our grasp the tools to create solutions.    No matter what our faith may be, we can search it for what it has to say about the worth of each person whom God has created and our relationship to each other as part of God’s creation.   If we act on that faith, if we fully claim that family relationship, who then will be poor ?   Will we not make room in the global economy for each and every one of our brothers and sisters?