A World Council of Churches (WCC) team observing preparations for a UN Financing for Development conference set for Mexico in March, is calling for justice in the world economy and transformation of the international financing system.

It echoes the call of British economist Michael Rowbotham who visited New Zealand last year (2001) to speak on monetary justice and banking reform. He is a former secretary of the United Kingdom Christian Council for Monetary Justice, and author of two recent books on 'modern money'.

Rowbotham is a strong critic of our debt-based financial system, in which commercial banks supply the bulk of national and international money through the loans they create. Money supply increases with debt. In New Zealand, over 98 percent of our money is in the form of bank-created credit, rather than notes and coins. Money created through mortgages accounts for 60 percent.

Rowbotham says people are "borrowing under distress", and up to 35 to 40 percent of take-home pay is going on mortgage repayments. He says reliance on commercial banks to supply the money stock leads to unsustainable debt, and is "inherently unstable".

"It produces a rapacious form of economic growth that, if it is not undertaken, the economy can't stabilise - it either goes into recession or then you trigger the next boom ... there is no opportunity for a sustainable, benign, developed, diversifying economy - the spiritual economy if you wish."

In the Third World, crippling debt repayments hinder poor countries' ability to focus on real needs. They are servicing debt rather than serving their own people.

In his latest Internet publication, 'Written in Belief', Rowbotham paints a picture of what would happen if Third World debt were cancelled. Revenue from exports (currently going on debt repayments) would accrue to debtor nations. They could become stronger buyers in the world market. Their own currencies would strengthen, improving their financial and trading position, and putting them on a more equal footing with international corporations. They would be in a stronger position to set commodity prices, possibly determining prices among themselves. Domestic agricultural and industrial development would receive a higher priority.

As a corollary, the West may see a return to domestic production of industries and agricultural products which went abroad in search of cheap labour. There would be new employment, and a more decentralised world economy, with multinational corporations less able to exploit the gap between rich and poor nations.

Rowbotham says the role of organisations such as the World Trade Organisation and the World Bank in encouraging inappropriate development and destroying some of the most beautiful places on the planet, means they "ought not to be considered as candidates for overseeing debt remission."

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Read Rowbotham on: The Grip of Death, a Study of Modern Money, Debt Slavery, and Destructive Economics, 1998; and Goodbye America! Globalisation, Debt and the Dollar Empire, 2000; both published by Jon Carpenter Publishing. Or write to NZ Banking Reform, PO Box 19121, Courtenay Place, Wellington. Contact - Deirdre Kent: deirdrek@paradise.net.nz