MAY 1999

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The Jubilee 2000 movement has generated enormous interest around the globe and there is hope that some progress will be made in the cancellation of unpayable debt when the G7 summit is held in Cologne in June. There are now important Jubilee alliances in the South and Alejandro Bendaña from Nicaragua offers some reflections on the process.

Kairos shares these feelings and is working in a number of areas which illustrate the broader understanding of Jubilee. The challenge to the dominant economic system continues with the search for alternatives and the identification of specific changes that need to be made to enable greater justice and accountability. The parallel need for renewed and restored relationships is reflected in the activities of the Exiles Coalition and its work on Asylum legislation and its consequences. The Building Plural Communities project complements this work by exploring what is being learned in some of the plural communities of Europe. All activities have to be undergirded by a living spirituality that will provide meaning and energy for those involved.

There have been changes in the arrangements for the proposed Brussels event in October. The plans now include the following:

This will bring together representatives from Europe, Africa and the Caribbean and review the results of the two year process which has been exploring alternatives to Structural Adjustment Programmes. Attendance at this consultation will be by invitation from the organising group in Heidelberg.

This will provide an opportunity to bring questions and demands from the Consultation to representatives of the Parliament. It will also provide an opportunity to bring other experiences or questions relating to Alternatives to the present economic model.

Kairos groups in Brussels are arranging a programme which will enable participants of the Consultation and those arriving for the Festival to meet with community groups working for change. On the evening of October 22nd there will be a gathering of all who are participating. This will provide the opportunity for introductions, welcomes and a cultural celebration.

Kairos Festival October 23

This will provide an opportunity for Kairos groups to meet and share their experiences through workshops, music, celebrations, informal conversations. The Festival will be held at a School which has plenty of space for a variety of activities to take place simultaneously. This will also include a review of the response to the Kairos Document for Europe. The event is being planned by a group in Brussels and Albert Gyan is the correspondent. Accommodation can be arranged at a cost of Euros 30 per day and a further Euros 10 per day should cover other meals, providing that bookings are received early.

The activities of the Festival will depend on the suggestions and contributions of participants. If you would like to contribute a workshop or some activity please let Albert know as soon as possible even if the details are not yet finalised. Albert can be contacted at Kairos Europa, Avenue Du Parc Royal 3, B-1020 BRUSSELS, Belgium, tel 00 32 2479 96 55, email Kairos_EJ@compuserve.com

This will be the planning meeting for Kairos Europa which will review progress, identify future strategy and priorities and appoint a Management Committee. All those linked with Kairos are entitled to attend and make their views known.

A coach has been booked by those in Birmingham wishing to travel to Brussels. It will depart from Birmingham on Friday morning October 22nd so that it arrives in Brussels on Friday evening. It will depart from Brussels on Sunday afternoon October 24th and arrive in Birmingham late on Sunday night. Spaces are presently available on this coach and it is possible to pick up passengers en route. The cost will be £60 for travel and two nights bed and breakfast in a 6 bed room, £66 for a 4 bed room and £80 for a single room. Bookings should be made with Kath Wills, 380 Charles Road, BIRMINGHAM B9 5HL, tel 0121 772 4675 as soon as possible.

The Planning meeting of the Plural Communities project was held in Luton from March 5th-7th. A full report of the meeting is available from the Grassroots office. Representatives of ten different plural communities met to discuss the project and plan a way forward. The groups involved were:

Presence of Communities of African Origin - Brussels

Hinbun (Kurdish Womens Group) - Berlin

Gospel from Africa to Europe - Amsterdam

Afrika Roots - Lund, Sweden

Right Time Association - Warsaw

Corrymeela Community - Northern Ireland

Southern Voices - Manchester

Birmingham Council of Faiths - Birmingham

Luton Interfaith Forum - Luton

Beckton Parish - London

The next stage will be exchanges between pairs of projects which will take place over the next six months. In April/May 2000 there will be a Millennium Festival which will bring together the experience of the ten different groups.

The aim of the one year project is to explore experience in the groups of identity, values, spirituality, and common problems. It is hoped that the work and relationships initiated during this year will be continued in a longer term project. Further information about the Millennium Festival will be given in the next Newsletter.

A number of people have been concerned about how Kairos is operating. At present it is a loose network which is decentralised into a number of projects and linked groups. A part time worker in Brussels is responsible for liaison with the European Commission and co-ordination. The overall work of Kairos Europa is planned and reviewed by the International Co-ordinating Group (ICG) which meets once a year and involves representatives of all groups and projects. This ICG appoints a Management Committee which meets three times a year. At present David Forbes and David Cowling are British members of the Management Committee. Funding is linked to projects, which means that the building and strengthening of the movement has to be done in the context of project activities or funded by groups themselves.

Kairos UK is an even looser network! Grassroots tries to provide a link between Kairos Europe and those in this country who are interested in the issues in which Kairos Europa is involved. As a result of the experience of the Graz trip, the Plural Communities project has been developed and provides an opportunity for parts of the Kairos network to meet. Conversations are being held to assess the feasibility of organising a consultation on the economic issues as perceived by Kairos groups in Britain. It would be an opportunity for grassroot groups to share their experiences and insights with representatives of the churches and possibly government representatives so that we can identify the most effective way of moving forward. We would be interested to know of any thoughts you have on such a gathering.

The most active project within Kairos Europa is the economic and finance project based in Heidelberg. It continues to explore ways of challenging the dominant economic orthodoxy so that it will be more just, democratic and sustainable. The Kairos Document has been produced as part of this process and comments and reactions are invited from those who have been working with the document. Discussion of the document and action which can follow will take place during the Brussels gathering in October this year.

We need to prepare for the ICG so that we have positive suggestions and constructive criticism to share. There are two specific ways in which we can do this:

i) Ideas for future priorities for Kairos are welcome but it would be helpful if these could be set out in a short paper ahead of time so that other participants will have the time to read and discuss before the meeting.

ii) Nominations for the Management Committee. There is one space on the Management Committee and nominations are needed.

Reflections on the Strategy Workshop in Copenhagen 10/11 May

- there is increasing evidence of the role of global financial and economic mechanisms in creating poverty and perpetuating injustice.

- the influence of these structures totally overwhelm the efforts of churches and development agencies. Unless these cause are addressed, agencies will continue treating symptoms.

- Jubilee 2000 has generated a great response world wide. The campaign has a specific aim limited in time and, in its present form, will end next year.

- with economic issues now on the agenda of the churches it is important to carry the argument further

- campaigns need a focus and there is the need to identify an issue around which a new campaign can build.

There is no need to rehearse the statistics but the problem is clear. The present financial and economic system is flawed:

- it has resulted in a transfer of wealth from the bottom to the top. In global terms and in British terms the income of the poorest 10% of the population has decreased over the last ten years whilst the income of the richest 10% has increased.

- it has resulted in a shift in the burden of taxation from capital to labour. De regulation and tax evasion mean that 20% of all companies in Britain paid no corporation tax.

- it has resulted in erosion of democratic control and accountability. Britain cannot give preferential terms to Caribbean banana producers - the WTO overrules national sovereignty.

- it has increased instability because capital can be moved very quickly away from areas in search of a better return.

The specific mechanisms which contribute to these results can be grouped in four main areas debt, capital control, regulation and business. The details include the following:

i) Indebtedness

Foreign debts of underdeveloped countries as of 1993 total $1.7 trillion despite them having repaid $14 trillion in debt service. There is no real interest in debt relief because its continuation allows the North to control the South. The Jubilee campaign will gain some concessions but they are likely to be small and will probably have conditions attached.

ii) Illegitimate debt

Much of the debt is illegitimate - incurred by undemocratic governments and not used for the benefit of ordinary people eg apartheid debt incurred to maintain a system of oppression. Why should innocent people today have to repay this debt?

iii) Insolvency Right

Legally in Britain there is an independent body which has jurisdiction over bankruptcy proceedings. In the international scene it is the lenders who exercise the law. Any rescheduling will inevitably be to the interest of the lender and ignore mistakes made by the lender.

iv) Free movement

Productive investment requires a long term commitment. Much of the capital flowing around the world is merely looking for the best rate of return. It will move into a country in huge quantities if the incentives are attractive but be withdrawn from the country just as quickly if a more attractive return can be gained elsewhere. This can have devastating effects on the national economy.

v) Tax evasion

Much of this capital is outside of the control of national governments and evades tax. This means that the income for governments is inadequate to meet the needs of social programmes.

vi) Currency speculation

There have been several examples of speculators bringing pressure on currency which has eventually resulted in its devaluation and huge profits for the speculator.

vii) Campaign to deregulate

The WTO has been successful in securing the removal or tariffs and restrictions on trade so that national governments can not influence trade by including social considerations. The IMF has been successful in increasing the freedom of capital movements and the proposed MAI agreement which is now likely to be pursued in the WTO will remove controls on investment. The argument has been that deregulation will increase trade and bring benefit to all. The reality is that trade is increased primarily for the transnationals and northern companies, and wealth has increased for those who control the transnationals.

viii) Voting rights in IMF

Developed countries account for over 60% of the voting strength at the IMF and World Bank, compared with just 17% in various UN bodies. Inevitably the discussion and decisions are going to be in the interest of the Northern countries.

ix) Accountability and Democratic control

The IMF, World Bank, Central Banks and Transnationals (TNCs) are all very secretive and not democratically accountable. Enormous power is therefore in the hands of a few people who can exercise it as they like.

x) Dominance of Transnational Companies (TNCs)

Approximately 60% of world trade is actually between different parts of the same TNC.

xi) Different standards in different countries

The TNCs will exploit differences in regulation between different countries in terms of environmental protection, health and safety, tax.

xii) Importance of commodity prices

Many countries of the South still generate large proportions of their export earnings from sales of primary commodities. The dominance of the companies means that they can fix prices and dictate terms.

A review of the crises in Brazil, Mexico, Russia and Thailand indicates that there is no one factor that was determinative in all countries. Countries are different and their financial structures are different but they are all susceptible to aspects of the present financial systems. Currency speculation was a more important factor in Russia and Mexico than in South America in the 80s. Short term public debt was important in South America but not in Thailand.

i) Debt reduction/HIPIC

Unlikely to achieve a major change because any relief is still within the existing framework and so debt will recur. Relief of debt should not be conditional on Structural Adjustment Programmes.

ii) Insolvency rights

Develop proposals for an International Sovereign Bankruptcy Mechanism outside the IMF so that when a country cannot repay its debts, the bankruptcy mechanism ensures that in debt restructuring, there is a public and private sharing of costs.

iii) Speculation tax

Canada is already exploring this idea (Tobin tax) This will include a tax on foreign exchange transactions which will discourage speculative movements of capital.

iv) Tax Havens

The British Govt is in favour of regulating tax havens

v) Campaign against the MAI

This is urgent as it is likely to re-emerge at the WTO meeting in Seattle in November. Electronic networking will continue to be important for campaigning on this issue.

vi) IMF Reform

IMF should be reformed so that it is more democratic and all information, within reasonable and definable limits, should be made public.

vii) Rebuilding national and regional sovereignty

National governments should have the right to regulate the amount, pace and direction of capital movements.

viii) Redirect and Improve Quality of Foreign Direct Investment (FDI)

At present there is competition between countries to attract FDI and this leads to give aways which disadvantage the host country.

ix) Ethical investment

Increase pressure on churches, local authorities and other public funds to use their investing power wisely and ethically.

x) Increased share holder activity

Share holders legally control a company but in practice the power is in the hands of the Directors. Increased activity and coordination with pension funds and large investors can produce a more productive dialogue with Directors and on occasions, change of policy.

Participants evaluated priorities by considering the effectiveness of possible action to influence the financial system, the comparative advantage and the potential campaignability. As a result of this exercise five priorities emerged:

i) MAI. Important because of the impact it will have on national sovereignty and freedom for capital but action is required urgently. Need to publicise actions and encourage churches, NGOs and other public bodies to act in the next six months.

ii) Capital controls through tax and regulation. Could be the next big issue but needs more research to clarify the specific aims, identify the targets, develop symbols and slogans.

iii) Jubilee. Jubilee is much more than debt. With the enormous mobilization that has taken place this will have to continue but to be redefined. Southern Jubilee Coalitions will be meeting in the autumn and they may identify a new strategy which the North could support.

iv) Ethical Investment. Continue the activism and support the groups that have the experience and expertise.

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This Newsletter is produced for Kairos UK by Grassroots. Any correspondence should be addressed to Grassroots at 102a Dunstable Road, LUTON LU1 1EH, tel 01582 416946, fax 01582 732032, email: Grassrootsluton@compuserve.com