Jubilee USA
CADTM.org
June 23, 2006

Press Release

Jubilee USA Network, the US arm of the global movement for debt cancellation in impoverished countries, released the following statement today:

“As Indonesia struggles to rebuild after this weekend’s devastating earthquake – striking less than two years after the 2004 tsunami – world leaders must move quickly to cancel Indonesia’s onerous debt burden. While donors pledge emergency assistance in the form of more loans to Indonesia, the country would be better served through full debt cancellation.

This weekend’s earthquake comes amid existing conditions of persistent poverty in the country. Indonesia has been slowly recovering from both the 2004 tsunami and the 1997 Asian financial crisis, while emerging from the 32-year rule of dictator Suharto. Much of Indonesia’s debt was contracted under Suharto and can be classified as ‘odious’ and illegitimate. In US Senate testimony, Northwestern University professor Jeffrey Winters found that at least one-third of World Bank loans to Suharto were stolen by his regime.

At $134 billion, Indonesia’s debt is unpayable. Almost twenty percent of Indonesia’s population is classified as poor, with the unemployment rate also around twenty percent. Yet in 2004, Indonesia spent 10 times more on debt service than it did on healthcare. The government spends about $2.5 million per day on interest payments alone, with debt service accounting for almost a third of the government’s budget. Currently, only around $500 million in the country’s budget is set aside for emergencies such as the recent earthquake.

Jubilee USA joins with Indonesian civil society partners to call on the Paris Club group of creditors along with the International Monetary Fund, World Bank, and other Northern creditors to cancel Indonesia’s odious and illegitimate debt. The combination of persistent and wide-spread poverty in Indonesia – exacerbated by the earthquake – and the odious nature of Suharto-era debt provide a compelling argument for the 100% cancellation of Indonesia’s debt. Such cancellation must come immediately and without harmful economic conditions attached.”

Jubilee USA Network is the US arm of the international movement working for debt cancellation for impoverished nations. Jubilee USA is a network of 75 religious denominations and faith-based groups, labor groups, environmental organizations, and community and advocacy groups working for freedom from debt and economic justice for countries in Africa, Asia, and Latin America.