TENTH MESSAGE 9-15-00
This message is a departure from previous essays: it presents two
perspectives on the question of morality and economics from other writers.
The normal format (Moral Economics - Essays On The Relation of Economic
Theory to the Moral Perspective in POVERTY AND DEVELOPMENT: AN INTER-FAITH
PERSPECTIVE. [www.wfdd.org.uk/]) will resmue with the next posting.
MORAL IMPERATIVES FOR ADDRESSING
STRUCTURAL ADJUSTMENT AND ECONOMIC REFORM MEASURES
by the Religious Working Group on the World Bank & the IMF -- May 1997
(Individual or institutional endorsements of and reflections on this
statement are welcome and may be sent to the Religious Working Group on the
WB/IMF, P.O. Box 29132, Washington D.C. 20017; [log in to unmask])
Economic decisions -- by individuals, institutions and governments --
involve moral choices and are subject to moral accountability. We recognize
that it is a challenging task to apply moral values to one's institutional
responsibilities. Yet our faith traditions insist that public policies be
shaped and evaluated according to the standards of God's love and mandate of
justice.
In the early 1980's many nations in the global South faced financial crisis.
While there were many reasons why this situation developed, the immediate
cause was unpayable debt service, precipitated by tight money policies in
the rich countries that drastically hiked international interest rates. Much
of the original debt was incurred in the 1970's by largely undemocratic
governments through questionable lending practices by Northern banks. People
living in poverty did not benefit from many of these loans, yet they bear
the burden of repayment. In addition, they live with the effects of
far-reaching economic policy changes required of countries to qualify for
debt restructuring, new loans and foreign investment.
Termed "structural adjustment" and "economic reform," these policies have
sought to control inflation and stimulate growth. They include devaluing the
national currency; raising interest rates and decreasing the availability of
credit; reducing government spending -- usually resulting in deep cuts in
social programs and subsidies; lowering tariffs and liberalizing trade; and
selling state-owned enterprises. Agricultural and industrial production is
shifted from food staples and basic goods for domestic use to commodities
for export. Adjustment prescriptions have been designed by international
institutions led by rich nations and implemented by debtor governments
without popular debate or civil society participation.
Adjustment has profound consequences for people in the global South and
their natural environments. We hear from brothers and sisters around the
world that conditions for many people living in poverty and suffering under
injustice and discrimination have worsened as the result of these measures.
We recognize that some kind of economic reform is often necessary and that
environmentally responsible growth is important for impoverished countries.
But it is morally unacceptable that people who struggle barely to survive
are carrying the burden of these policies on the assumption that the
benefits may eventually "trickle down." Means as well as ends must be just.
In addition, some evidence suggests that the long-term results of current
adjustment policies may be the consignment of millions of people to
permanent deprivation. We urge international financial institutions and
governments to seek new approaches, which involve greater openness and
flexibility, foster broader civil society participation, protect the
environment and encourage more equitable distribution of economic power and
resources within and among nations.
We write as people of faith in the United States. In listening to our
Southern colleagues and reflecting on our faith traditions, we have put
forth a set of moral criteria applicable to the design and evaluation of
economic reforms. We offer these principles as a basis for dialogue,
conscious that as individuals and religious institutions we, too, need to
make new efforts to embrace more fully the values we articulate.
The values we affirm here are not new. They are rooted in our Scriptures and
have been expressed repeatedly in our churches' public statements on social,
economic and environmental justice. While this statement is explicit about
our underlying theological convictions derived from the Christian tradition,
we understand that other religious faiths and widely accepted moral beliefs
embrace similar values. Each section of this statement presents a
biblical/theological affirmation, applies this as a moral standard to
economic reform measures and summarizes what we have seen and heard about
the current reality.
1. All of life exists within the sphere of God's care and judgment.
Individuals, institutions, business enterprises and governments are objects
of God's concern and subject to moral accountability. This includes the
economic realm. There are no economic "laws" that can place policy decisions
beyond moral scrutiny. Economic actors and policymakers are morally
accountable for their choices and their effects, intended or otherwise, on
people and all of God's creation. Since "the earth is God's," its resources
must be employed in a sustainable manner for the benefit of all, not just a
privileged minority.
Therefore: To be just, economic reform measures must contribute to a social
framework in which property ownership and use, productive activity and
commerce occur at a level and in a manner suitable for meeting the basic
needs of all, serving the common good, alleviating poverty and preserving
the natural environment.
In practice, we have seen and heard that economic adjustment measures have
made it more difficult for many people to meet their basic needs and often
result in environmental damage. We observe that policies supported by
appeals to inevitability, efficiency and aggregate growth often have had the
effect of serving the interests of the wealthy and powerful at the expense
of ordinary people. International institutions, governments and private
corporations frequently focus on their short term institutional benefit,
failing to adequately serve the common good.
2. Human beings are created in the image of God. All persons -- male and
female -- are created in the divine image, loved by God and equal in worth,
dignity and fundamental rights. Bearing the divine image, everyone has the
right and responsibility to participate meaningfully in the political,
social and economic decisions that shape their society. In harmony with all
creation, all people are entitled to an equitable share in the fruits of the
earth. The economy exists for people, not people for the economy.
Therefore: To be just, economic reform measures must respect and enhance
human dignity and gender equity. They must be flexibly designed and
implemented with the consent of the people expressed through authentically
participatory and democratic processes. Reforms must be held accountable to
international human rights standards and treaties.
In practice, we have seen and heard that the nature and pace of adjustment
measures generally have been determined without public debate or civil
society participation. We observe that, as a result, some persons who enjoy
political, social and economic privileges benefit from these policies, while
many of those who lack such privileges are compelled to carry the principal
burden of adjustment, having to cope on a daily basis with its negative
consequences. We see and hear that adjustment has too often contributed to
the weakening of human rights, for example, by placing additional burdens
disproportionately on women, who often must increase their unpaid and paid
labor in order to make up for the loss of government services and family income.
3. Human beings are persons-in-community, intended to live in relationships
of human solidarity according to the norms of love and justice. All people
are created and called to love God and neighbor -- across the divisions of
ethnicity, class and nation. Justice is love distributed and requires that
everyone have access to sufficient resources to live in dignity, meet their
family's needs and fully participate in the shared life of their community.
Great extremes in the distribution of income and wealth must be avoided. Our
relationship with God and one another is violated when some people have much
more than they need while many others lack the basic necessities.
Therefore: To be just, economic reform measures must promote a more
equitable distribution of power and wealth within and among nations. Reform
must foster solidarity and justice among people locally, regionally and
internationally, reduce economic and social inequality, and support and
strengthen local communities and cooperative development processes.
In practice, we have seen and heard that economic adjustment has often
resulted in greater unemployment, decreasing wages and deteriorating working
conditions for many, while increasing the wealth of some. We observe that
the pattern of wealth distribution in the global, national and local
economies is generally becoming more skewed, and that reforms have not
addressed this injustice. We have seen and heard that this accelerating
inequality has weakened families and communities.
4. God is redeemer and liberator, calling us to a special concern for people
living in poverty and oppression. The work of God involves lifting up and
empowering people living in poverty and the redemption of human beings from
every kind of oppression -- personal and social. According to Christ's
teaching in Matthew 25, nations and people will be judged on the basis of
how they treat the hungry, homeless, and most vulnerable members of society.
Public policies, laws and economic relationships that we create can become
instruments of emancipation by giving preference to the dignity of those who
labor, human rights, gender equity and sustaining the earth, above the
interests of capital.
Therefore: To be just, economic reform measures must make poverty
eradication the priority for every phase of reform. Reform must not increase
the burden on the poorest members of society, but should maximize benefits
and minimize costs for all categories of people living in poverty. It must
ensure that people struggling to overcome poverty have access to productive
assets, benefit from public and private investment and are served by the
generation of sustainable livelihoods. Reform must recognize the role of the
state and other forces of society to appropriately control the market and
provide a social safety net.
In practice, we have seen and heard that even when macroeconomic indicators
suggest improvement in a country's economy, people living in poverty
frequently experience increasing insecurity and see insufficiency deepen
into misery. For example, a country's overall agricultural sector can be
growing because of exports by commercial farms, even as small farmers lose
the ability to make a simple living. We observe that adjustment measures
have often resulted in dramatic decreases in social spending, recent
attempts to mitigate social damage notwithstanding. We see that the unpaid
work of women -- often made more burdensome by structural adjustment -- is
not even included in official economic indicators. We observe that reforms
often have created a climate in which labor rights are difficult to exercise
and where people in poverty must compete with each other for their means of
survival.
5. Creation is an expression of the goodness of the Creator and is endowed
with dignity and value. Human beings are called to live in mutually
sustaining relationships with each other and with all creation. Human
activity should enhance, not destroy the beauty, diversity and richness of
all life. The unsustainable use of increasing portions of the earth's
resources deprives people and all God's creatures of what the Creator has
provided: enough for all. In response to God's work of reconciling all
things in Christ, human beings are called to repentance for abusing the
earth and to the restoration of their broken relationships with all creation.
Therefore: To be just, economic reform measures must promote sustainable
development. Reforms must be designed to improve the quality of human life,
preserve the natural environment, respect all creatures and ensure the
ability of future generations to meet their own spiritual and material needs.
In practice, we have seen and heard that economic reform measures too often
have had the effect of accelerating soil degradation, water pollution,
watershed disruption, the destruction of critical habitat and the loss of
other renewable and nonrenewable natural resources. We see that reform has
often weakened governments' ability to protect the environment. We observe
that the need for growth in impoverished countries must be balanced by
world-wide efforts to end environmentally unsustainable production and
consumption, especially in the industrialized countries.
6. Sin is social and institutional, as well as personal. Social sin is
present where there are growing economic disparities, increasing
concentrations of economic power, and accelerating environmental abuse. Only
God is ultimate. It is a form of idolatry when any given economic model or
system is viewed as complete or fully adequate.
Therefore: To be just, economic reform measures must not be rigidly based on
any one economic model. They should be flexibly adapted to specific social,
economic and environmental contexts and open to innovative designs
responsive to popular and democratic needs and initiatives.
In practice, we have seen and heard much skepticism from people living in
and struggling to overcome poverty concerning the current economic model
that emphasizes minimal government, "trickle down" and global integration.
We observe that adjustment measures based on this model have not adequately
taken into account individual countries' particular sets of needs and
circumstances or to the social and environmental consequences of such reforms.
7. All humanity is called to forgiveness, reconciliation and jubilee. The
biblical witness mandates just and equitable commercial relationships,
selfless help to those in need and the cancellation of oppressive debts that
keep people locked in poverty. It calls for the restoration of land and
livelihood to the dispossessed. Jesus taught that God will treat our debts
in light of our treatment of others' debts to us. The crushing international
debt burden unjustly carried by millions of people living in impoverished
countries cries out for justice.
Therefore: To be just, economic reform measures must be accompanied by a
definitive cancellation of the crushing international debt of poor
countries. Debt relief must not be rigidly conditioned on adjustment that
further burdens people living in poverty, and it must be implemented in ways
that primarily benefit the ordinary people who have borne the major burden
of their countries' indebtedness.
In practice, we have seen and heard that entire economies are reshaped by
the conditions placed on debt restructuring and new loans. While
international creditors have now acknowledged that unsustainable debt
burdens should be relieved, current strategies have set mere "debt
sustainability" as their stated goal. Even if this approach is successful,
people living in poverty will be left perpetually repaying resource-draining
debts. We observe that the real goal of debt relief and economic reform must
be socially and environmentally sustainable development within the framework
of just and equitable global relationships.
A SHORT LIST OF CHURCH STATEMENTS ON SOCIAL AND ECONOMIC JUSTICE:
AMERICAN BAPTIST CHURCH: Resolution on Economic Justice for the United
States, 1992. CATHOLIC: John XXIII, Pacem in Terris (Peace on Earth), 1963;
Paul VI, Populorum Progressio (On the Development of Peoples), 1967; John
Paul II, On Social Concern, 1987; Peace With God the Creator, Peace with all
of Creation, 1990; Centesimus Annus, 1991; Tertio Millenio Adveniente, 1994;
U.S. Catholic Bishops, Economic Justice for All, 1986; A Decade After
Economic Justice for All, 1995; A Catholic Framework for Economic Life,
1996; U.S. Catholic Conference, Relieving Third World Debt, 1989; Jesuit
Provincials of Latin America, Neoliberalism in Latin America, 1996.
EVANGELICAL LUTHERAN CHURCH IN AMERICA: Economic Justice: Stewardship of
Creation in Human Community, 1980; For Peace in God's World, 1995.
MENNONITE: Mennonite Central Committee, Response to the International Debt
Crises, 1991. PRESBYTERIAN CHURCH (USA): Christian Faith and Economic
Justice, 1984; Hope for a Global Future: Toward a Just and Sustainable Human
Development, PCUSA, 1996. UNITED CHURCH OF CHRIST: A Pronouncement on
Christian Faith: Economic Life and Justice, 1989. UNITED METHODIST CHURCH:
Resolutions on Environmental Stewardship, 1984; on Economic Justice, 1988;
on the Global Debt Crisis, 1988; A Call for Increased Commitment to End
World Hunger and Poverty, 1992.
URL: http://www.religiouswg.org
A Moral Assessment of Progress Toward Jubilee:
>From Structural Adjustment to Just Economic Relationships
by the Religious Working Group on the World Bank & the IMF
(Individual or institutional endorsements of and reflections on this
statement are welcome and may be sent to the Religious Working Group on the
WB/IMF, P.O. Box 29132, Washington D.C. 20017; [log in to unmask])
Three years ago, in a statement entitled Moral Imperatives for Evaluating
Structural Adjustment and Economic Reform Measures, hundreds of religious
leaders declared:
"Economic decisions by individuals, institutions and governments involve
moral choices and are subject to moral accountability. Our faith traditions
insist that public policies be shaped and evaluated according to the
standards of God's love and mandate of justice."
The Moral Imperatives statement was a faith-based critique of the
farreaching economic policy changes required of developing countries to
qualify for debt relief or new loans. The statement was rooted in reports
from our partners in the global South and our own observations that
conditions for many impoverished people around the world were worsening as a
result these policies.
Repeatedly, we have brought this concern to the discussion about Jubilee and
debt cancellation. We are more convinced than ever that the immediate, broad
cancellation of debt is essential and support the demands of the Jubilee
2000 campaign. It must be deep enough to make a real difference and wide
enough to include debts that are overwhelming, odious or illegitimate.
Our Moral Assessment statement now specifically addresses the current status
of economic policy prescriptions attached to debt relief as expressed in the
new Poverty Reduction Strategy Paper (PRSP) process recently adopted by the
World Bank and International Monetary Fund (IMF). We have been told by
officials at the U.S. Treasury, the World Bank and the International
Monetary Fund that the new Poverty Reduction Strategy Paper (PRSP) process
will take a more enlightened approach to economic reform.
There is enormous skepticism about the ultimate intentions of creditor
institutions and governments who for decades have supported damaging
structural adjustment programs. Furthermore, official policy pronouncements
have often failed at the level of implementation.
This Moral Assessment statement focuses on holding policy makers accountable
to the commitments they have expressed with respect to the PRSP approach. If
these commitments are truly kept, it appears to us that the PRSP approach
has at least the potential to move away from structural adjustment in its
current form and make economic reform subordinate to poverty reduction and
subject to authentically democratic processes.
As communities of faith and people of conscience we commit ourselves to
holding policy makers accountable to their own pledges of a new and more
just effort.
I. We have been told that under the new framework, poverty reduction will in
every instance take precedence over economic policy reform.
This commitment must imply that reforms associated with trade, investment,
privatization, monetary policy, financialmarket policy, labormarket policy
and other measures that have constituted structural adjustment programs will
now be reevaluated and eliminated if they impede progress toward poverty
reduction, even more so if they themselves worsen the situation of people
living in poverty. We will monitor with great care the implementation of
this proposal and will judge it not by promise but by performance.
II. We have been told that decisions will be made in a transparent manner
and that people in local communities will be participants in the design of
national poverty reduction plans.
The new PRSP approach will only succeed if creditor countries cease
attempting to control the economies of countries in the global South and
respect the right of the people of these nations to democratically determine
their own policies and goals. We will monitor the PRSP process to see if
"participation" moves beyond to include real power in decisionmaking,
implementation and evaluation of poverty reduction strategies, including
debt cancellation and economic reform measures. Sufficient resources must be
made available to local communities to make such participation possible for
all levels of civil society.
III. We have been told that assessment of the social and environmental
impact of policy reforms will be an integral part of decisionmaking about
the suitability of any such reforms prior to and during implementation.
But we will not be convinced until we see the identification and termination
of adjustment programs that have deepened unemployment, lowered wages and
job security, destroyed small businesses, undermined food security,
increased the burdens on women and undercut government's ability to protect
the environment.
IV. We have been told that countries emerging from overwhelming debt and
poverty will not be held to a rigid model of economic life, but will be able
to adapt economic policy decisions to their specific social, cultural,
economic and environmental contexts.
We insist that this is essential. Policy prescriptions designed and imposed
by outsiders are bound to ignore the varied nature of multiple local
realities. The "Washington Consensus" set of policies forming the basis of
structural adjustment programs have been a disaster for poor people. We will
observe the PRSP process to discern whether or not countries are genuinely
freed from this inadequate model to shape their own economic lives and futures.
V. We have been told that in the new plan savings from debt cancellation
will be used for poverty reduction.
We believe the best assurance that debt cancellation will benefit ordinary
people lies in the empowerment of local communities to hold their own
governments accountable. We will monitor the PRSP process to see if it
facilitates this empowerment, and ensure that it does not serve as an excuse
for delaying debt relief.
We will judge the value of all policies by their impact on impoverished
communities and the environment.
--When unjust and overwhelming debts are abolished;
--When those now carrying the burden of debt sit as equals at decisionmaking
tables;
--When local people impoverished by debt and structural adjustment see real
improvements in the quality of their lives;
--When debt no longer serves as an obstacle to environmental protection and
human dignity;
--When the global North faces up to its own debt to the global South for the
terrible moral wrong of slavery, the unjust appropriation of natural
resources and centuries of destructive military, political and economic
intervention and domination;
Then we will know that the call for Jubilee is being answered.
URL: http://www.religiouswg.org
Michael Pierce McKeever, Sr.
Economics Instructor, Vista Community College, Berkeley, CA
MIEPA URL: http://www.mkeever.com/
Corp Ethics List: http://www.egroups.com/group/corp-ethics/
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