Debt relief to Africa is justice, not charity
June 14, 2005
The world's wealthiest countries recently approved a deal that will bring some needed economic relief to some of the world's poorest countries.
The G8, representing the top industrial nations in the West plus Japan and Russia, announced it will almost immediately cancel about $40 billion worth of debt that 18 countries owe. And it will cancel the debt of another 20 others down the road. The countries owe massive and unpayable debts to the World Bank, International Monetary Fund and the African Development Bank.
Of the first 18 countries, 14 are in Africa. They will save a total of about $15 billion in debt payments over the next 10 years if the deal holds.
The need for debt cancellation is painfully obvious and urgent.
The debt load is killing people.
The U.N. Millennium Development Goals seek to cut infant mortality by two-thirds, reduce the number of people in poverty -- defined as living on less than $1 a day -- by half, and place every child in school by 2015.
Current projections show that, without debt cancellation and an infusion of cash, the reality will fall far short of the goals. Instead of reducing the number of deaths of children under 5 to 2 million, the numbers will rise from the current 4.8 million to more than 5 million. Aid advocates argued that at least 62 countries need debt cancellation and increased aid to have a ghost of a chance of rising out of poverty and meeting the Millennium Development Goals.
The Bush administration, for all of its chest-beating, was dragged into this agreement kicking and screaming. It took a last minute cross-Atlantic desperation visit by British Prime Minister Tony Blair to push President Bush to even join a bandwagon that was leaving without him and the United States.
But before Blair, Bush and others pop the champagne cork and smile for a photo-op, it must be underscored that this debt cancellation, though an important forward motion, is a small one.
Not one poor country will suddenly turn into a Canada or Sweden because its debt has been erased. To begin with, the agreement does not include many poor countries, such as Kenya and Nigeria in Africa, and Haiti and Indonesia elsewhere, which are on the brink of economic collapse. Ignoring the crisis in these nations is dangerous and a tragedy for the world.
What's more, the debt cancellation agreement does not include increases in aid, which Blair personally lobbied for but Bush rebuffed. The British have proposed to double the aid that goes to Africa and other poor regions to $50 billion. Bush would have none of it.
Making matters worse, Washington and other Western states still refuse to fully open their markets to African products without severe restrictions, high tariffs and other obstacles. They also refuse to end subsidies that provide an unfair competitive advantage to U.S.- and European-based corporations and agribusinesses. These policies have retarded African development.
The debt cancellation agreement is justice, not charity. Most of the poor in Africa did not benefit from the loans in the first place. Nor were such loans intended for that purpose.
Cold War politics, neo-liberal economic theory and corporate exploitation are the parents of the crisis facing tens of millions in Africa. Canceling the debt is the right thing to do. It is about time.
Clarence Lusane is assistant professor in the School of International Service at American University in Washington, D.C. He is the author of several works, including "Hitler's Black Victims" (Routledge Press, 2002). He can be reached at pmproj@progressive.org.