December 12, 2000
Coalicion Jubileo Nicaragua (en Español)

Between the 18th and 21st of December, Nicaragua's entry into the Heavily Indebted Poor Countries (HIPC) initiative will be discussed in Washington. HIPC was designed in 1996 to relieve the debt of the 41 most heavily indebted countries in the world, including Nicaragua.

The Nicaragua Jubilee Coalition considers it important to call upon the Nicaraguan population not to have high expectations regarding the amount to be canceled under this initiative, inasmuch as other countries' experience has demonstrated that the level of HIPC relief does not surpass 40 percent of their total debts. There have even been cases of countries where debt service payments increased after the process.

We must be aware that Nicaragua's decision point will not imply an automatic cancellation of the debt, much less a solution to the problem of indebtedness, given the composition of the debt and the degree of relief under this initiative. The eligible balance to be cancelled under HIPC currently is $1.177 million, which is only 80 percent of the total Paris Club debt before 1988. As to multilateral debt it is still not known for certain what the amount of the reduction will be.

We consider it inconsistent to speak of debt relief for poverty reduction and simultaneously continue insisting on the application of structural adjustment prescriptions, such as: privatization of the national telephone and energy companies, and even the imposition of fees for basic services like education and health care, concealed under projects of modernization and autonomy.

Debt relief under this initiative has failed not only because of its design and implementation, but because in its essence it prioritizes the attainment of macroeconomic goals over sustainable human development. It is ironic that debt relief, in spite of its reforms, is tied again to the same economic policies that have managed to keep our country perpetually indebted.

The Nicaraguan Jubilee Coalition continues in its demand for a total and unconditional cancellation of the external debt, because it is illegitimate, immoral and unjust. The regimes that incurred this debt, no less than the creditors were irresponsible and not transparent in the use of those funds. Therefore, it is not now the responsibility of the Nicaraguan people, 80 percent of whom are poor, to pay the costs of this irresponsibility. We insist that the debt already has been paid numerous times through interest payments on the same and inequitable trading relationships between our countries and the industrialized countries of the North.

It is not possible that the same countries that historically have become rich at the expense of our traditional knowledge and genetic resources (later used in industry) and the environmental imbalance that is a product of their greenhouse gases, now claim a financial debt. This minority that exploits Earth's common resources has a debt with our peoples, we the minority who consume less than our rightful portion of the planet's resources.

Our Jubilee message is clear and just: the debt cannot continue being the cross of the Nicaraguan people, this is unjust and immoral. Therefore we demand:

1. Cancellation of the external debt, without the application of structural adjustment conditionalities that have done so much damage to our country.

2. That the funds freed up by debt cancellation be invested in a transparent and responsible manner, prioritizing the investment towards the country's poorer rural areas.

3. That the cancellation of this debt does not result in a reduction in development assistance.

4. That policies for the taking on of debt be established which avoid continuous concessional loans and avoid a process of acceleration of new indebtedness.

5. That there be a true process of consultation, information and construction with the grassroots, on the essential components for fighting poverty caused by neoliberal policies.

6. An overhaul of the present model of development that is impoverishing more and more those sectors excluded from Nicaraguan society.

We appeal to the ethical call of the Biblical figure of the Jubilee as the New Beginning with justice and fairness. We do not ask for alms nor charity but the restitution of that which has been unjustly taken from our natural wealth and by means of the exploitation of our people. We are certain that the outcry of the Nicaraguan people and its just demands will prevail: Yes to life, No to debt!