Unjust global trade rules exacerbate the crisis faced by impoverished and indebted nations. Charles Abugre of the Third World Network, an independent group of development organizations, said: ìDebt and trade are inextricably linked. Unfair trade rules left Africa in debt and debt has allowed creditors to impose further unfair trade rules on Africa.î

Trade and the Debt Crisis
Declining commodity prices in the 1970s meant many developing countries were not earning enough through exports to pay for imports ó or to pay off debt accumulated when interest rates were low. By the late 1970s and early 1980s developing nations had to borrow even more to pay for previous loans. Since then, commodity prices have remained on a decline, and the debts of poor nations have grown exponentially.

Free Trade or Fair Trade?
The World Bank and International Monetary Fundís structural adjustment programs promote free market policies ó including promoting exports, removing import barriers and privatizing public services ó that have led to a decreased standard of living for the poor in heavily indebted countries.

As Christian Aid points out, ìDebtor countries were expected to dive head first into the international trading system. The theory was that they would therefore be able to earn enough dollars to repay their debts.î The result is the opposite, with many countries growing and selling the same crops. Commodity prices are still low, and poor farmers cannot support their families on the wages they receive.

 
In addition, the current global trading scheme is designed in a way that benefits the richest countries and penalizes the most impoverished. The World Trade Organization, which sets global rules, continues to ignore the serious problem of low prices for the main exports of poor countries, while requiring that poor country markets be open for foreign imports. The WTO, along with the IMF and World Bank, also pushes privatization of services like water, health, and education.

In countries like Bolivia the privatization of water caused costs for ordinary people to shoot up. Only widespread protests have led to the canceling of contracts with foreign companies.

A New Beginning
By mobilizing people across the United States ó and around the world ó for debt cancellation and trade justice people of faith and conscience can help free developing nations from a web of global economic inequity. Poor farmers and workers deserve a new start, without from the burden of debt and in a global market that promotes fair prices for their products.

Sources: World Development Movement, London; Christian Aid, www.christian-aid.org.uk

For more information, visit the Interfaith Working Group on Trade and Investment.