Legal Scholars Advance the Principle of Odious Debts

The impact of debt burden on women

(Febraury 2, 2000)

Specioza N. Kiwanuka
Jubilee South

The early 1980’s financial crisis faced by many countries in the
South had unpayable debt service as the immediate cause that was
precipitated by the tight money policies in the rich countries that
drastically hiked international interest rates. The debt debate ignores
the fact that debts were contracted as a result of borrowing by
undemocratic governments that were not mandated by the people.

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.
Debt analysis demonstrates the question of power balance since it has
become an instrument used to regulate economic relations between
developed and developing countries. This has directly contributed to a
shift and to a more powerful role for the World Bank and the
International Monetary Fund in the South, with adverse implications on
the livelihood of the marginalised sections of society, especially the
women and children.

Leading problems for women in the South have been listed as
illiteracy, poverty, lack of voice and public security (war,
insurgence, cattle raiding, banditry). Non-investment in girls’
education and inequitable burdening of women and girls with domestic
labour have intensified their problems of inequity in taking up
positions of responsibility in society, in control of income within
households, greater female illiteracy, lack of property and land
ownership and control for women (e.g. only 7 percent of women in Uganda
own land); and adolescent girls have far greater levels of infection
with HIV than age mate boys. Effects of illiteracy are also
multifaceted in the form of poor parental care and child malnutrition.
Insecurity has caused families to be displaced, loss of property and
access to land, and deprived them of both income and subsistence
agriculture to support the household.

Poverty contributes to household crowding; many people live in
single room dwellings, especially in urban areas. In rural areas, the
average size of land holding is decreasing as a result of population
growth and land fragmentation due to inheritance. Cash for health
expenditure comes primarily from the sale of subsistence crops,
followed by borrowing. Most households are not able to maintain any
cash reserve or savings.

The average household cash income in Uganda is still very low ā€“ less
than US$200 per capita per annum. Though poverty levels are claimed to
have dropped from 44 percent to 35% in the period 1998-2000, the gap
between the poor and the rich is continuing to rise and poverty levels
are still alarming. Rural poverty levels are as high as 80% and urban
poverty, 59%.

IMF claims that its programs for low-income countries have
progressively strengthened the integration of social spending into
programme design. IMF claims that during the Structural Adjustment
Program period of 1994-98 there was an 80% increase in public spending
on education and health care. The actual situation is that African
countries’ expenditure rose only by 20% per year after falling
continuously for 15 years. At this rate it will take until the year
2010 to restore spending on education and health to the level of 1985!

Between 1990 and 1993, African region paid US$ 13.4 billion annually
to its external creditors more than its combined spending on education
and health. Yet the African debt burden continued to rise so that in
1994 alone it increased by 3.25 to US$ 312 billion.

On education, total spending in Sub-Saharan Africa fell in real
terms between 1980-1988 from US$ 11 billion to US$7 billion. A review
of 26 countries shows that there was a decline in spending per pupil
from US$ 133 to US$89. Even more serious is the drop in enrolment rates
from 71.1% in 1988 to 66.7% in 1990. On average, only 37% of girls
enrolled in primary level school in 1990 and this figure drops after
seven to eight years of schooling.

Zambia spends four dollars on debt service for every one dollar on
health while infant mortality rate rises. Uganda spends US$3 per person
annually on health and the same amount on education but US$17 per
person annually on debt repayment, while in every 10, five Ugandan
children die of preventable diseases before reaching the age of five
years.

The resultant fall in hospital attendance because of user fees has
led to increased unpaid labour provided by women especially for
HIV/AIDS patients. Similarly the rising cost of childbirth has
increased the maternal mortality rate. This was evident as even as far
back as 1993 for example when a UNICEF report cites figures as high as
1,000 deaths to 100,000 births in Ghana. The situation is made worse by
the extremely high patient to doctor ratios. In Uganda, for example,
the ratio is 24,000 patients to 1 doctor.

Cameroon’s debt in the year 2000 was at US$ 9597 million (6000
billion FCFA) and the country spends US$ 659 million in annual debt
servicing but US$ 249 million on education and US$ 98 million on health.

In Zambia, 72, 000 people lost their jobs in SAP induced
retrenchment and by 1996, there was a report of three million part-time
child labourers out of a total population of nine million! Female
participation in the informal sector increased from 405 in 1980 to 575
in 1986 and has since grown. During the same period, there was a
nine-fold increase in the 12-to-14 year age group working in the
informal sector.

In Zimbabwe, in spite of the austere SAP measures, the foreign debt
stood at Zimbabwe dollars 36. 5 billion by 1996, of which Z$2 billion
was scheduled for debt repayment. In the same year, real wages declined
by 405 and inflation was rising at 23 percent.

Mozambique indebtedness has been compounded by annual disasters, the
floods of 1999 destroyed 141 schools, spread malaria, caused dysentery
and cholera and destroyed roads. By 1999, Mozambique was cited by the
World Bank as the fastest growing economy, but is also said to have
huge financial obstacles and inadequate resources that block its path
towards long-term healthy development. During the 1990s, Mozambique’s
debt reached 594 percent of its GNP. Yearly payments of US$57 million
surpassed the dollar expenditure on primary health of US$20 million and
education of US$32 million combined.

Then, there is the odious debt or money borrowed to finance
apartheid related activities in South Africa and states as far as
Tanzania. All those examples call for total debt cancellation.

In conclusion, what is called for is total debt cancellation ā€“ both
bilateral and multilateral. On the grounds that undemocratic
governments contracted the debt and they are therefore illegitimate
since repayments violated the rights to health, education and economic
development of the most vulnerable groups, especially women and
children.

Past mistakes must be avoided and governments must develop clear
guidelines as to how loans will benefit men, women, and children. As a
new measure, citizens need to become the mechanism to control new
resources and governments should only obtain loans that are sanctioned
by the people through their representatives (parliamentarians) and
allow civil society to monitor them.

Debt negotiations ought to consider the link between debt and
budgeting for social services. And reviews of poverty reduction
strategies need to be gender disaggregated. Last but not least,
complicity of borrowers and debtors plus the historical cause of debt
must be included in debt analysis.

Specioza N. Kiwanuka is with Vredeseilanden Coopibo (VeCO)
Uganda as programme officer for policy advocacy and is also a supporter
of AWEPON. VeCo is one of the founding organisations of the Uganda Debt
Network and was actively involved in the Jubilee 2000 activities in
Uganda.

Specioza is an agicultural economist by profession and has
worked with poor rural households in Uganda for over 10 years.
Currently, through VeCo, she is also actively involved in policy
influencing and formulation for the benefit of the marginalised
population in Uganda and more specifically the rural farming households
and the women.

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