Sunday, April 24, 2005

[Global Poverty] Global Debt: Poverty's guarantee

24 April 2005

Americans sometimes worry about the effects of a globalized economy on themselves and their children. As legitimate as those uncertainties can be, the fears are much stronger in the poorer nations of the world.

In Africa, Latin America and Asia, the harm is overwhelming -- and the results are poverty for millions of people.

Repaying these mountains of debt has crushed development efforts, stripping many countries of budget resources for health care, job creation and even education. International financial institutions frequently have imposed loan conditions that force poverty-stricken populations to pay more for electricity, water and other necessities.

In Seattle, a group of international experts and activists is here to talk about the need for large-scale relief. They came here at the invitation of Jubilee Northwest Coalition, which includes churches, labor organizations and others.

The concerns around debt have also begun to make an impression among policy-makers in richer countries. Last weekend, World Bank and International Monetary Fund representatives talked about eliminating or reducing some of the debt burden.

The meeting ended unsatisfactorily, without any agreement among the wealthiest nations. The Bush administration's treasury secretary, John Snow, and Britain's Gordon Brown, chancellor of the exchequer for Prime Minister Tony Blair, seem to have talked past each other. U.S. and British officials tried to portray the conference as having enlarged support for their own competing versions of debt relief. The conflict throws into some doubt the hope that an upcoming meeting of the G-7 nations will lead to an agreement on helping African and other poverty-stricken countries, as Blair desperately wants.

There are advantages to both Bush and Blair proposals. Our plan offers a complete write-off of debt for some countries, but without a guarantee of continuing aid. The British proposals do better on sustaining assistance but come up shorter on the extent of debt relief.

Neil Watkins, a Jubilee USA official, says there is no excuse for delaying on relief. Indeed, it is hard to see how anyone can consider many of the debts as legitimate.

Magda Lanuza of Nicaragua, one of those making the Jubilee visit here, says her country's cycle of debt extends back to the dictatorship of Anastasio Somosa. His regime, which she rightly calls one of the worst ever in the Americas, specialized in siphoning development money and evading efforts to assure that the money was used as agreed. In one case, trees were planted along a highway to conceal devastating clear-cuts.

Ana Maria Nemenzo of the Philippines talks of similar abuses under the U.S.-supported Marcos dictatorship. Zimbabwe's Jonah Gokova says that civic activists in his country want to find out where loans have gone under the increasingly arbitrary and brutal regime of Robert Mugabe.

The biggest obstacle to a stronger commitment to future U.S. aid and erasing the debts of more countries is the Bush administration's own obsession with making its irresponsible tax cuts permanent. But the administration has made real progress in the way this country treats the poorest countries, especially in Africa.

With the administration's inclination to help, a push by Congress to support the proposed Jubilee debt relief act would be valuable. Activists will meet with several local congressional offices tomorrow to seek support.

Debt relief won't solve poverty by itself. A freer, fairer international trading system would also offer hope to hard-pressed farmers, workers and families in poor lands. That's why U.N. Secretary-General Kofi Annan is pushing for a new international trade treaty next year.

First, though, wealthy lenders should stop burdening struggling nations with the costs of debts that impoverish the world's ability to bring about better conditions for everyone. The Bush administration and other governments owe that much to salve the world's conscience.