Economic Justice Overview

Economic justice brings to mind a wide variety of domestic and international issues--everything from the banking crisis and domestic unemployment to human trafficking and children laboring for Multinational National Corporations.

From the myriad of economic injustices, OSJ focuses on two major issues in the international economic system that have a tremendous impact on who is wealthy and who lives in poverty: trade and debt. 

While North Americans often think of Canada and the U.S. as world leaders dedicated to ending poverty, many of our governments' polices actually perpetuate unjust economic systems that keep millions in poverty.

As Christians we believe that permanent and irrevocable poverty is contrary to the will of God, and that reconciliation in Christ includes economic reconciliation. God therefore calls us to speak and act in behalf of the poor and advocate for an economic structure which prevents such lasting poverty (see Acts of Synod 1999, p. 487). 

Debt

Today, the world's poorest countries are suffering under the weight of an un-payable debt. The debt is not only perpetuating hunger and poverty around the world but it is also hampering those countries' ability to build a growing and sustainable economy.

When individuals or companies become deeply indebted, bankruptcy provides a safety net that stops them from continually spiraling into further debt. However, countries don't have that option.

Without this safety net, most poor countries have fallen so far into debt that it has become impossible for them to climb out.  (Read about the causes of the debt crisis).  These debts push countries into an endless downward spiral of taking out new loans to repay old debts.  Although most have already paid back more than the sum of the original debt, a massive debt stock still remains in interest. Interest payments divert scarce resources away from poverty reduction: poor countries continue to pay debt service at the expense of the provision of basic services to citizens, many of whom live in extreme poverty and lack necessities such as access to clean water, adequate housing or basic health care.

Although wealthy countries such as Canada and the U.S. provide foreign aid for poverty reduction, this assistance does not make up for the drain on the resources of impoverished countries from debt payment. By the late 1990s, the World Bank estimated that for every $1 in aid to developing countries, more than $7 went back to rich countries in the form of debt servicing. Debt is thus a huge obstacle to the provision of basic services and enactment of measures to reduce poverty and achieve the Millennium Development Goals (MDGs).

World leaders took strong steps in 2000 and 2005 to cancel the debt of impoverished countries. Social spending in countries receiving debt relief has risen by 75 percent and its positive effects are already showing. The money freed has been directed toward important poverty-focused initiatives such as fighting global AIDS, enrolling children in school, and providing clean water. In Nicaragua, for example, CRWRC helped one community implement a clean water project that was financed by government funds freed by debt relief.

Despite the successes to date, poor countries still pay back an average of $2.30 in debt service for every $1 received in aid.  To have any chance of meeting the MDGs, over 60 low-income countries need immediate debt cancellation.

For more information about debt relief visit Jubilee USA.

Trade

Wealthy countries such as the U.S. and Canada have often failed to recognize how their trade policies create food security issues in low-income countries. Here’s how it can happen: in order to keep a market for their products, Western governments may subsidize agricultural commodities like grain. This means they sell grain abroad at a loss during periods of surplus production, when world supplies are high and prices low.  These subsidies ensure that U.S. and Canadian farmers can make a living. However, the unintended consequence of this cheap food is that it undermines local farming in poor countries. It becomes cheaper for those poor farmers to buy those imported grains than to grow their own, so they stop farming. Moreover, Western countries then reduce the subsidies when world supplies are low, so that these poor farmers are now paying the highest prices for food they once grew themselves. Many fall into hunger.  (For My Neighbor's Good p. 18).

Christians are often compelled to send food aid when hunger strikes around the world. But we are also called to address the reasons that hunger exists in the first place.

We therefore advocate for the U.S. and Canadian governments to put human rights and economic justice--both those at home and those abroad--the front of its trade, investment, and economic policies and legislation.  Trade policies that serve our own interests must also be directed at overcoming exploitation, reducing economic inequalities, and uphold human rights commitments.

For more information about trade policies visit KAIROS--Canadian Ecumenical Justice Initiatives