IOU: The Debt Threat and Why We Must Defuse It. Noreena Hertz

people to write stuff, and finding out names of newspaper editors in key states, and then placing articles in papers.’

      ‘It was kind of like the Theatre of the Absurd,’ remembers Bono, who was supposed to be delivering a new album, All That You Can’t Leave Behind, while all this was going on. ‘There were even times that Bobby used to hide outside meetings that I would have with Republicans. I would go in and he would hide, stay outside. He’d say, “I’m a Kennedy. You don’t need me around here.” He would have flown from LA and be hiding outside.’

      The Bono-Shriver commitment, tenacity and good humour encouraged their allies to bat that bit harder too.

      Kasich pulled his considerable weight. ‘He was soundly determined,’ Shriver says. ‘And he’s one of those fellows who when he gets very determined you know you really don’t want to cross him. People knew that he would just, to put it bluntly, fuck them if they didn’t go along with him.’

      So they did.

      Larry Summers went all out for them too. ‘He went to those meetings at a time of hostility that is hard to imagine,’ remembers Bono. ‘This was after the Monica Lewinsky affair when there was a terrible stink in the city, and he batted for us.’ Professor Jeffrey Sachs hosted a prominent conference on debt cancellation in Washington and Gene Sperling played an integral part: ‘He was always on the phone, always with great ideas of how to get things done,’ recounts Shriver. The US affiliate of the Jubilee campaign did a lot of leg work on Capitol Hill to educate Congressmen and their staff, producing form letters for their supporters to send to their representatives, and providing e-mail addresses of swing Senators and Representatives that campaigners could send out. And big business was brought on board – Goldman Sachs, Motorola, Bechtel, Caterpillar and Merck all signed an open statement calling for the full $435 million to be found.

      But, if the Congressional floor fight was to succeed, they’d need yet more support. Various key Republicans were still holding out, and Callahan needed to be, at the very least, out of the way.

      It was time to call upon Jesus.

      And it was Eunice Shriver who had his number. She was pals with the Reverend Billy Graham, the TV evangelist with a virtual congregation of hundreds of millions. Graham agreed to make a video for Bono and Bobby that they then sent around to recalcitrant members of Congress, a two-minute, no bells, no whistles video, in which he asked them to support Bono’s Jubilee cause.

      Jesse Helms, the notoriously conservative, hugely influential Republican Senator and Chairman of the Senate Committee on Foreign Relations, a man who symbolized opposition to foreign aid of any sort, wasn’t sent a video – he was, after all Graham’s own Senator, and knew him well. But Graham’s office played an important part in enabling what became a critical meeting between Bono and Helms – they vouched for Shriver. And with this endorsement, Helms agreed to the meeting.

      ‘Bono connected with him in a spiritual way,’ recounts Shriver. ‘The two talked about the vast gulf between Africa’s misery and America’s prosperity. About the Bible, children and so forth. And Helms was very moved by Bono’s sincerity and evident knowledge. Not only in terms of the scripture, but in terms of the financing. He said he would come on board.’

      Helms’ support was what Bono had been waiting for. His entry into the fold gave permission to all those politicians who were in his anti-foreign aid camp to stop opposing debt cancellation. What’s more, the very public way in which Helms joined the team, with stories of the hard man of American politics in tears during his meeting with Bono doing the rounds, meant that the final laggards – people like Phil Gramm from Texas, who might have opposed any challenge to the Committee’s recommendation – could now safely be counted upon not to do so.

      Sonny Callahan was the last hold out.

      ‘It was a story Harry Belafonte told me that made me go for Sonny’s bishop,’ recounts Bono. ‘Harry Belafonte said that he remembered being with Martin Luther King and a group of Dr King’s key supporters when Bobby Kennedy was made Attorney General. The team around Dr King was very depressed, because at the time Bobby was known to be quite reactionary on civil rights. They saw it as a very black day for the Civil Rights Movement, and they were all bitching about Bobby Kennedy, about what a hopeless case it was. And Dr King told them to stop bitching and said, “Look, there must be one redeeming thing about this guy – give me one redeeming thing.” And they said: “Look, I’m telling you Martin, there’s nothing redeeming about him. He’s an Irish racist.” And Dr King closed the meeting and said: “Come back when you’ve got one redeeming thing.” And when they met again two weeks later they said, “We’ve found something.” “What?” said King. “His Bishop. He’s very close to his Bishop. He’s a religious guy and he really listens to his Bishop.” So they went and met with the Bishop. And then Harry tells me, in this incredible voice that he has, “When Bobby Kennedy lay in a pool of his own blood in Los Angeles, there was no greater friend to the Civil Rights Movement.”

      ‘He moved. Any man can move one hundred and eighty degrees. Harry had told me this as a sort of way of steering my way and I have used the story many times as a guide. But in the case of Sonny I used it literally.’

      ‘There were priests in the pulpit. Priests and pastors sermonizing on debt relief on Sundays, telling their congregations to tell Callahan to take care of this, including my own Bishop. Eventually I gave in,’ concedes Callahan. ‘What else could I have done?’

      When the floor fight finally did take place in early September and Kasich got up as planned and voiced his objections, Callahan didn’t stand in the way. Members from both sides of the aisles, in a rare moment of bipartisanship, voted to override the Committee’s recommendations.

      And on October 25, 2000, Congress agreed to provide $435 million for debt relief, the entire amount the campaigners had hoped for.

      

      The Herculean efforts of Bono and Shriver are a beacon to what the civic community can achieve. And leave us with a permanent hope that we can get politicians to act. But did the great American gesture inspired by Bono and Shriver actually resolve the developing world’s debt crisis? Did the Cologne Initiative that they had been backing ever provide the world’s poorest countries the opportunity to make a ‘fresh start’? Were the IMF and World Bank loans ever cancelled? Was the $435 million the start of a renewed commitment on the part of the United States, and other countries to funding development? Or were the difficulties in securing it, a warning of how hard it would continue to be to raise money domestically for foreign aid?

      And what about less poor but still highly indebted countries like Brazil or Turkey or Pakistan which were not included in the debt cancellation programme? How likely is it that emerging markets such as these, if their debts continue to build up, will also reach crisis point, and be forced to call a default? And how destabilizing to the world economy would such a scenario be? With what political consequences?

      And how about the two issues that most threaten the stability of our future – the environment and terrorism? How connected are they to the debt story? Is debt an issue that should just be of concern to financiers, number crunchers and churchgoers? Or should defusing the debt threat be of uttermost importance to us all?

      But first, how on earth had most of the developing world at the end of the millennium ever got into a situation where it was so visibly drowning in debt? How had debt, surely a positive instrument for development, ended up becoming the cause of so much desperation and despair? What had gone so dreadfully wrong?

THE BACKGROUND

       CHAPTER TWO It’s Politics Stupid

      ‘Imagine your bank manager saying to you “I’ll lend you as much money as you want, as long as you’ll be my friend.”’

      Debt-endency