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Forum for the Future of Aid

Southern Voices for Change in the International Aid System Project

The Forum on the Future of Aid is an online community dedicated to research and opinions about how the international aid system currently works and where it should go next

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The Rise and Development of the Global Debt Movement: A North-South Dialogue

Source: United Nations Research Institute for Social Development (UNRISD)

For decades, the debt issue has remained a front-runner—or perhaps even the front-runner—on the agendas of civil society organizations and movements throughout the world. The debt problem is a fascinating mosaic of world politics and power relations spiced with greed and mistrust. It also shows the devastating consequences of systemic imbalances in the global economy. From the civil society standpoint, these consequences have resulted in human suffering and diminished opportunities for those affected by debt.

An impressively wide range of civil society organizations have been working on the debt issue: from single-issue HIV/AIDS organizations to churches, from radical groups to academics. Within these movements, perhaps the most prominent issue of contention is the approach of development aid as a form of charity versus a call for global justice.

Civil society in the South argues for immediate and complete cancellation of debts, appealing to human rights, moral justice and the historic debt of the North toward the South. The debt problem is, at times, referred to as a mechanism of re-colonization. In the North, impressive mass mobilizations have attracted the attention of creditor governments, and led to media calls for solving the problem of illegitimate debt. Even though civil society movements have denounced the debt burden on developing countries, effective measures have not yet been taken to solve the debt problem. And despite the common goal of finding a solution to the debt problem of the South, debt campaigners do not agree on how this goal should be attained.

These differing approaches loosely distinguish the North-South divide, which sharpened following the split of the Jubilee campaign in 2000. Having said this, the debt work of civil society organizations constitutes a textbook case of necessity for North-South cooperation in terms of fact finding, knowledge building and political pressuring. If getting an issue onto the political agenda is an indicator of successful civil society work, the debt movements have been very successful. In addition, the work done by civil society organizations has created public awareness of the debt problem. But the actual reduction of the debt burden has been modest, standing today at about three times what it was in the 1980s. Figures show that indebted countries have paid, in pure interest, the amount owed to the international financial institutions. This is used as an argument for the debt problem being a political problem rather than an economic one. Still, the potential usefulness of the historical and moral arguments—among others—put forward by civil society should be revisited.

Potential research gaps raised in this paper include practical consequences of debt cancellation, the mechanisms that maintain the debt problem, and how these can be addressed. These issues should be thought of within a framework of developing alternative structures for the world economy.

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