A Consuming Interest

In one of the first attempts by the international consumer movement to broach the issue of the growing indebtedness of the Third World, the International Organization of Consumers Unions (IOCU) promised to make the Third World debt crisis one of its priorities in the coming year.

IOCU's concern with the potentially divisive debt issue at its 12th World Congress in September comes at a time when the organization is increasingly attracting member organizations from debt-ridden countries in Latin America and Africa. The number of member organizations from Latin America doubled in the last three years, prompting IOCU to open a regional office in Montevideo, Uruguay a year ago. African membership has also doubled and there were some 30 African delegates from 14 countries at this year's Congress.

Founded in 1960 as a largely First World consumer organization, over the years IOCU has been transformed into an organization with a decidedly Third World agenda, and one where Third World members will soon outnumber their First World counterparts.

By attempting to come to terms with Third World debt, IOCU is addressing an issue that is unparalleled in its ability to affect consumers in both Latin America and Africa, and, in the long run, consumers in the First World. But the debt crisis has traditionally been far from the domain of the consumer movement.

In offering its only analysis and solution, IOCU will have to strike a delicate balance. Indeed, finding a "consumer response" to the debt crisis could undermine IOCU's 25-year effort to find common ground between consumers from around the globe.

But it is a challenge that IOCU's Anwar Fazal says the group must take or risk being put on the sidelines of the major consumer debate of the next decade. "We have to face the real issues in the world," says Fazal. "The consumer movement marginalizes itself by dealing with little problems. We have to confront the major issues of the day, then we will be relevant."

And the Third World's mounting and debilitating debt is the issue of the 1980s and beyond, says Fazal. "If we cannot show our solidarity and build up a program with common concerns on this kind of issue then solidarity will be a hollow thing."

Even so, IOCU may be hard-pressed to come up with a unified response or direct plan of action. Total debt forgiveness or a moratorium on debt repayments could shake the West's financial underpinnings, and even a partial government bailout of over- extended banks would cost consumers in the First World hefty tax increases amounting to billions of dollars.

Divvying up financial responsibility for the debt crisis threatened to divide IOCU member organizations even at the Congress in Madrid.

The failure of Third World governments to live up to their contracts, said Jeremy Mitchell of the European Research Institute for Consumer Affairs, will lead to an increased tax burden on British families of some $1 billion each year.

Mitchell and others were concerned that already the debate on the debt crisis was failing to take into consideration that it was a zero-sum game--unless First World consumers were prepared to stand by and watch banks collapse, money that wasn't paid back by the debtor countries had to come from them.

But more important than assigning blame may be IOCU's contribution to redefining the debate so that consumers in developed and developing countries are not pitted against one another. Clearly there is a role for putting the debt in its historical context and educating consumers about the role their banks, governments and corporations have played in precipitating the debt crisis. If IOCU can broaden the debate to this extent it may well be able to push for more consumer involvement in future lending policy.

First World consumers, angered that their taxes are going to be used to write-off the debt, should ask themselves: "How is it that these funds were given for a project that was not viable in the first place?" said Professor Jasper Okelo, of the Kenya Consumers Organization.

"The consumers in Britain and the United States should have a say in terms of what kinds of investments they are allowing their financial institutions" to undertake, Okelo says.

Despite the debate, IOCU's resolution was strikingly vague. Noting that "debt and overcommitment has increasing negative and serious consequences for consumers in developing countries," the Congress resolved "to consider how this issued can be resolved, and what strategies can be adopted by consumer organizations."

But the fact that IOCU has taken up the debt issue may be a sign that the debt crisis will no longer be left to creditor countries, finance ministers, multilateral development banks and their commercial counterparts.

-Ellen Hosmer