Debt Same as Slavery for World's Poorest

by Judith Achieng

The meaning of that word has now changed, since the community lost its land to upper classes from the mountains following massive World Health Organization (WHO) malaria eradication programs carried out in the area in the 1960s.

Today, "Kamaiya" means bonded labor. Because they are landless and poor, the Tharu community have to labor for their landlords to earn a living.

Kamaiyas earn low wages, often in the form of paddy, despite the minimum wages outlined in government employment policies of about 60 rupees, an equivalent of one dollar a day.

"Because there is no real wage, Kamaiyas frequently have to borrow money from their landlords, to educate their children and sustain their families, pushing them deeper into the debt misery," says Churna Chaudhary of the Nepal-based human rights organization, BASE.

Although the average debt per household is only $75 it is a lifetime of debt for most families, who unable to clear the debt pass it on to their children.

"Other landlords insist that if a man takes a loan, his wife and children must be included in the debt repayment," says Chaudhary.

After years of working with their families in an effort to offset the debt, little improves for most Kamaiyas except for more debt and hardships.

Up to 75 percent of Kamaiya households are said to have inherited the debt culture from the previous generation.

Debt bonding in Nepal is illegal and punishable by up to 10 years in jail, but most of the landlords, often politicians and rich business people are too powerful to be touched. One landlord is also an owner of the largest media house in Nepal, explaining the lack of attention to Kamaiya plight in the local press.

Activists attending the Solidarity 2000 conference in this Danish capital say the situation of bonded labor in Nepal is similar to the debt situation in the third world.

The difference, they say, is that in Nepal bonded labor is illegal, but internationally, it is not only allowed, but monetary institutions like the Bretton Woods have been set up with the purpose of controlling impoverishment through unsustainable debts.

Kamayas are totally subordinate to their landlords who occasionally beat them, according to Tom White, a Danish activist attached to the Nepal-based non-governmental organization BASE, fighting to free Kamaiyas.

And so are the poor in southern developing countries, according to White, who have to bear the burden of loans issued to them over generations by rich creditor countries in the north.

"Although we are told that slavery is finished, in the globalized economy, a different kind of slavery is emerging. We can see it in Africa and other Third World countries," White told a gathering at the conference.

Debt is, however, one of the key areas in which little progress has been achieved.

Most developing countries, especially in Africa, spend as much as 50 percent of their annual budgets or 20 to 40 percent of their export earnings on debt servicing, according to figures from the Danish based North-South Coalition.

Uganda for example, despite an annual $40 million debt relief packet, pays an annual $140 million in debt servicing. In terms of the average per capita incomes of $240 of its population of 21 million people, each individual pays back some $180 compared with $9 and $5 to education and health, respectively.

"Because of these problems, our literacy levels are so high and 52 percent of Ugandans still get their water directly from swamps and other unprotected sources," laments Gerald Twijukye, of the Uganda Debt Network.

Much of the debt owed by developing countries also is, according to Lars Koch, the policy officer of the Coalition, high interests accumulated over time.

In other cases, loans were given to dictatorial regimes which were never accountable to their people. For example, the African National Congress (ANC) government in South Africa is now forced to pay debts incurred by the previous brutal apartheid regime which used most of the funds to sustain its racist policies.

Similarly Rwandese people are paying debt incurred by the previous regime to buy machetes and other weapons used to kill and maim them.

"The saddest this is that the creditors knew what they were doing," says Koch.

In 1995, during the Copenhagen summit, the debt issue was a hot issue.

The G8 countries also have admitted that the HIPC (Heavily Indebted Poor Countries) initiative set up to work out new debt relief programs for poor nations has failed.

As a result, the group came up with another initiative, the PISP (Poverty Reduction Strategy Paper) in which indebted countries are expected to draw up their own poverty reduction plans, as a condition for debt relief. "This also is not good enough," says Tovby.

"The PRSP does not belong to developing countries, when decisions and endorsements are still being done in Washington," says Koch.

Last summer, the world's richest G8 nations, meeting in Cologne, Germany, pledged to contribute $100 billion for the purpose of debt relief. However, only a handful of countries have received debt relief packages since then.

Angry at the lack of progress in debt relief, representatives of the Jubilee 2000 coalition have called for unconditional debt cancellation in all poor countries.

"We urge debt cancellation not to be linked to the economic reforms but to eradication of poverty," says Bo Tovby, the Danish representative of the coalition.