WCC: IMF, World Bank Should Sell Gold Reserves to Balance World Debt
The world’s largest ecumenical body of churches urged the G8 nations to cancel debts for poor countries and help reduce poverty
The world’s largest ecumenical body of churches urged the G8 nations to cancel debts for poor countries and help reduce poverty by promoting an economy of sharing and justice, in a letter sent to UK Prime Minister Tony Blair ahead of the next G8 meeting in July.
“Life in dignity for all in just and sustainable communities is the framework that has determined the ecumenical vision,” the World Council of Churches (WCC)’s General Secretary, Samuel Kobia, wrote. “We are convinced that such a vision can become a reality only when economic, financial and ecological justice is addressed holistically, with democratic participation of all, at all levels.”
The letter, sent in late May, encouraged G8 members to "cancel 100% of illegitimate debts for poor countries,” and suggested the IMF and World Bank could sell their gold reserves to help balance out the debt. The letter also said the banks in the North should return “stolen wealth” from the global South.
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On trade, Kobia said poor countries should be given the right to protect their agricultural sector and encouraged developed countries to eliminate trade subsidies to even out the competitive field.
The following is the full text of Kobia’s statement, as released by the WCC:
At the outset we express our congratulations to you on your re-election as Prime Minister of the UK. We watched the elections with keen interest and were happy to note your continuing commitment to social justice for all and your reiteration of the need to focus on Africa, that you so clearly expressed in your first comments to the press after your election. We look forward with keen anticipation to your leadership of the G8 and the challenges you hope to inspire them with. Our thoughts and prayers will accompany you as you discharge this noble responsibility.
The WCC is aware of the meeting of the G8 that will take place in Scotland in July 2005 and its crucial importance to the whole world, and we therefore take this opportunity to address to you some concerns that we pray the G8 will focus on during the meeting.
We write this pastoral letter to the G8 so as to raise a candle in a world that seems to be floundering in the dark rather than more resolutely promoting an economy of sharing and justice as a solution to poverty and environmental destruction. For the WCC justice has been and will always be the heart of the matter.
Life in dignity for all in just and sustainable communities is the framework that has determined the ecumenical vision to respond to the pressing concerns of economy and ecology. But we are convinced that such a vision can become a reality only when economic, financial and ecological justice is addressed holistically, with democratic participation of all, at all levels. The vision can never be achieved while the material over-abundance enjoyed by a small part of the global community continues to grow side-by-side with (and most often at the expense of) the abject poverty of a large proportion of this community, resulting in increasingly unconscionable levels of inequity. The number of people who suffer from extreme poverty, hunger and a lack of health have increased in the past decade because of systems of global injustice. The WCC, therefore, urges the G8 to rethink the logic of corporate globalization, which we believe has only sharpened the gap between the rich and the poor and has led to a destruction of the environment. The grinding poverty experienced by millions in our world today is derived from economic models of excessive competition motivated by profits. The WCC cautions that if no drastic changes are made in the present paradigms of economic growth, there will only be an aggravation of poverty leading to insecurity, violence and unnecessary deaths.
The WCC calls on the G8 to see the current global problems in a holistic way and not only adopt a piecemeal approach based on minor adjustments. It is in this spirit that we call on the G8 to consider seriously how to operationalize goal number 8 of the MDGs. Issues of equity and justice must be addressed under this goal if poverty is to be eliminated. We believe firmly that it is this goal that will determine the success of the remaining seven. It is indeed regrettable that the MDG process is the most unspecific when it comes to implementation. Trade expansion and increased growth cannot be achieved by neglecting equity and justice. We therefore urge the G8 to make equity and justice central to their deliberations.
On the question of external debts
In the short term, the WCC urges the G8 to cancel 100% of illegitimate debts for poor countries. However, the WCC asks that these measures be taken in following through this commitment:
Finance of cancellation should not be drawn from ODA.
There should be a 100% cancellation of debt stock and the focus should not be only on relieving debt service payments (UK plan).
Cancellation be applied to all impoverished nations, not simply to those that qualify for the IMF/World Bank’s HIPC initiative.
Debt cancellation to come without externally imposed conditions on impoverished nations.
IMF/World Bank must pay their fair share. The IMF could sell its gold reserves to raise more than $35 billion required to finance the cancellation of the IMF and World Bank debts. The World Bank could mobilize at least $17 billion in accumulated and future profits for debt cancellation.
Support be given to initiatives to transfer financial resources from the South to the North and return stolen wealth of the South that is presently located in the banks of countries in the North.
Support the introduction of a Currency Transaction Tax to curb financial speculation.
On ODA
As far back as 1970, the WCC initiated the goal of 2% of GNI dedicated to ODA. We still believe this should be the goal. However, for pragmatic reasons and in the short term, we urge the G8 to:
Achieve an average level of 0.7% of GNI to be allocated to overseas aid by 2010.
Donors adopt timetables for reaching the target of 0.7%.
Prioritise low-income countries and allocate at least 20% of aid to the improvement of education, health care, water supplies and sanitation in these countries.
No requirements to be imposed to purchase goods and services in donor countries (so- called ‘tied aid’).
Aid aimed at building the economic capacity of developing countries.
On Trade
So as to ensure justice and fairness in trade, the WCC calls on the G8 to take the following measures:
Give poor farmers in developing countries a chance to participate in a just trade enabling them to get out of poverty, by immediately eliminating all export subsidies in donor countries.
Eliminate all trade-distorting subsidies.
Support the right of developing countries to protect their sensitive agricultural sectors.
Ensure that market-access concessions work in favour of the poor.
On Climate Change
The WCC welcomes and appreciates Your Excellency’s initiative to include the issue of climate change on the agenda of G8. Since 1990, the Council has actively supported actions to address global climate change. It has in particular supported the people and churches in the Pacific who are beginning to experience the effect and consequences of global warming. The G8 countries must accept responsibility for record emissions over decades and for about 80% of the increase in concentration of carbon dioxide in the atmosphere since the industrial revolution and for the current emissions that are almost 50% of the total global emissions. We are alarmed that emissions of carbon dioxide and other greenhouse gases are still on the increase.
The WCC has frequently called for justice for those people and environments that are most vulnerable to the adverse effects of climate change. We urge G8 members:
- to take decisive action for rapid greenhouse gas emission reduction;
- to develop a strategic plan for committed global action – post 2012 when the first commitment period of the Kyoto Protocol will end.
The World Council of Churches prayerfully hopes for the positive outcome of G8 deliberations that result in significant measures to protect God’s creation by addressing the global climate change issue.
The WCC sends its prayers to the meeting of the G8 and urges that the contents of this pastoral letter be taken seriously. WCC will continue to monitor the decisions of the G8 to see the extent to which issues of equity and justice are addressed. It is our hope that God’s wisdom will prevail so that just and equitable sharing of global resources will dominate the discussions at Gleneagles, Scotland.
My deepest prayer is that God will grant you this wisdom.
Rev. Dr. Samuel Kobia
General Secretary
