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. 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 recognise that some kind of economic reform is often necessary and that environmentally responsible growth is important for impoverished countries. 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.