Project Jubilee

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Project Jubilee

No one more clearly recognizes the harmful global impact of the ever-increasing public and private debt than the World Bank, and Project Jubilee is designed specifically to do away with the problem. On January 1, in the year 2000, the World Bank in conjunction with the philanthropic Bilderberg Group and central banks around the world will officially announce that all debt in the world, both public and private, has been forgiven. On that day, the dawn of a new era in human history, debt will simply no longer exist.

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While the concept may be difficult for the ordinary citizen to grasp at first, World Bank economists assure us that debt is an abstract notion anyway; therefore the elimination of it is simply a matter of understanding the true nature of the situation, finding the political will to act courageously, and using the World Bank’s world-wide credibility to follow through with the badly-needed policy.

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Only a few reactionary voices continue to try to keep Project Jubilee a secret until that hopeful January morning. Happlyclown is pleased to salute the openness of visionary leaders like James D. Wolfensohn which is preparing us for a spanking new, debt free, millennium of peace, progress, and prosperity for all of humankind.

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The Problem of Debt

As well as resource constraints, some of the poorer countries face serious problems of overhanging debt. Yes, private capital flows have exploded, but more than 80 percent of them have gone to only 12 countries. Private investment is not yet the answer for these poorer countries.

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We know that there are no case-by-case solutions in the problem of overhanging debt. There must be a universal approach. With current instruments, we are already providing resources to help the majority of indebted countries and individuals meet their needs for both debt service and repayment. But for a large number of countries and their citizens, the debt overhang remains just too great. New lending becomes less effective and impotent in balancing debt as it grows. Debt become a major obstacle in creating a unified world economy.

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Roughly a quarter of the poorest countries' debt is owed to multilateral institutions. We must, therefore, review the options to address the problem of the countries and individuals which cannot escape from their debt overhang. But in such an individual approach the process of assessment and decision making becomes too problematic and expensive.

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Unlike the governmental approach to this issue, which is to "save money at any cost", the Financial Institutions apply sophisticated cost benefit analysis to their procedures and will not pursue "penny wise but pound foolish" policies. Realising the fact that money is not what it used to be - money is no longer supported by the gold reserves - today money transactions simply represent relative values in a dynamic pricing environment and have no connection with an "objective" value.

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Especially as the economy approaches complete globalization, it no longer makes sense for a central bank or banks to pursue relative "profitability" through the charging of interest on monies lent. Such monies advanced by central bankers are meant for stabilization purposes, but today increasingly such interest charges represent a destabilizing force. Thus, a new direction for central banks, and The World Bank in particular, is called for.

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The World Bank and the IMF are studying this issue very seriously. Together, we have developed this Jubilee Project and expect to make some recommendations to other Banks--and bring our conclusions to the Development Committee at the Spring Meeting. The issue is difficult and the possible outcome is of a great proportions. But we believe that it merits serious attention and deserves a clear indication of what the World Bank and the Fund can do for our Global Neighborhood.

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In the new global environment, the destabilizing force increasingly demonstrated by insolvent third world - and increasingly also developed countries - is the chief challenge facing the World Bank today. To truly address the issue, creative policies must be implemented. Policies that may have seemed completely outrageous to our founders at Bretton Woods 50 years ago may now be the most viable options available to the guardians of global prosperity as we enter the next millenium. We must not fail in meeting this critical challenge. And we will not.

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But let me repeat: we feel the crucial need to free us all from the debt that each and every one of us carries on our shoulders, one way or another, we all should take part in making debt stay in the past, and with commitment of the world leading financial institutions, such as the World Bank, enter the new millennium with sound policies and effective, transparent implementation of our new world economies. This must be our compact.

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