April 9, 2003

SAN SALVADOR, El Salvador - A Lutheran church leader from Argentina has described the foreign debt of countries in the South especially the Latin American region as illegitimate and anti-ethical and urged that this issue be brought before the International Court of Justice (ICJ) in The Hague.

The Rev. Angel. F. Furlan, president of Argentina's United Evangelical Lutheran Church (IELU), reminded church representatives attending the region's preparatory meeting for the July 2003 Lutheran World Federation (LWF) Tenth Assembly, that foreign debt, globalization and human rights were critical issues at the 2002 Conference of Bishops and Presidents of the Lutheran Churches in Latin America (COP) in Santa Cruz, Bolivia.

Furlan said that globalization, which could make significant contribution to humanity, has fallen into the hands of major First World political and military powers. In particular, He singled out the United States for imposing a new form of economic liberalism on poor countries using the foreign debt issue.

At the Santa Cruz conference, Furlan recalled, participants agreed to strengthen ecumenical relations to promote studies about the ethical-economic relationship, deepen theological reflection about the so-called foreign debt and declare that it has been paid several times over, and is illegitimate and anti-ethical.

Last year's conference and a September meeting of the Latin American Southern Cone Churches held in Florianopolis, Brazil, proposed that the LWF and World Council of Churches provide support so that the UN General Assembly could lobby the ICJ to rule on foreign debt obligations.

Statements from the Latin American meetings affirmed that foreign debt and its service impede the economic development of Third World nations and have a negative impact on the people's standard of living. It was pointed out that in the vast majority of cases, the debt was incurred without public knowledge or benefits.

The World Bank has recognized that 30 percent of the loans that were advanced never reached the beneficiary nation, and were instead used to buy weapons and for other repressive policies spearheaded by dictatorships.

According to Furlan, Argentina's debt, like that of other countries, has been paid several times over. Between 1976 and 2000 the debt increased from USD 8 billion to USD 160 billion, but the amount repaid within the same period was more than USD 200 billion.

Part of the increase was due to a unilateral hike in interest payments implemented by the United States and other creditor nations in the 1980s and imposed by the International Monetary Fund (IMF) and World Bank through adjustment programs and restructuring.

The so-called Brady Plan, supposedly aimed at reducing the debt, has led to an unrestricted opening up of the economy and the sale of all public holdings. In Argentina, 90 percent of banks and 40 percent of the industries are owned by international investors, Furlan said.

In the 1980s, Latin American countries earned USD 177.8 billion from the privatization of public assets. But in 1999 alone, according to the IMF, foreign debt service payments in Latin America and the Caribbean stood at USD 176.9 billion.

It is against this background that Furlan urged the Latin American Lutheran churches to present to the forthcoming LWF Tenth Assembly, an articulated discourse about the issue of the foreign debt, declaring it to be illegitimate and anti-ethical.

At the same time, he cautioned countries not to accept campaigns that seek to condone the debt or the argument that countries are insolvent. Rather, "we should insist that Latin American and Third World countries in general, are creditors of rich nations for the tremendous social debt that has been generated by the neoliberal policy."

The PAC in San Salvador is the last in a series of regional pre-assemblies prior to the Assembly at which more than 400 delegates are expected. Similar consultations have taken place in North America, Europe, Asia and Africa, while an international conference for women was held last November, and a global youth conference will take place a week prior to the Assembly opening.

ALC - Latin American and Caribbean News Agency (Lutheran World Information)