No help from World Organization's

Bi-Polar Bear
Reply Tue 12 Apr, 2005 10:34 am
nimh wrote:
blueveinedthrobber wrote:
Have these nations been paying any of the debt to begin with? Because forgiveness of the debt will be useless to these nations if it doesn't put money into their pockets to help themselves.

OK, here's a more precise answer to your question:

Rich countries have made progress in cutting debt to the world's poorest countries under the heavily indebted poor countries (HIPC) initiative. But a lack of funds has limited its effectiveness. Total debt service relief for the 23 countries covered by HIPC in 2001 amount to a projected $34bn. But 15 of these countries were still spending more than 10% of government revenue on debt servicing. In more than half, repayments to creditors were larger than spending on primary education.


Not being a devils advocate here, but if only ten percent of their revenue is being spent on debt relief and they still can't educate their people with the other 90% can they generate enough revenue to make progress in the first place or will they always be poor or have to borrow more money to stay afloat and start the debt cycle all over again which is throwing good money after bad? I ask this not out of a lack of empathy but in a strictly academic way.

Is it possible that they could use the services of professional budget consultants much as consumers do to help them maximize and make more efficient the way they spend their money?
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Reply Tue 12 Apr, 2005 10:46 am
I don't know. If their budgets are small to begin with then 10% can be significant. These are developing nations who have to make the initial outlays of cash to build infrastructure. Their budget needs are quite different from an already developed nation who already has established systems in place. For these developing nations, it is very important to provide education as a means of getting the populace to a place where they can begin to contribute to industrialization.
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Reply Tue 12 Apr, 2005 11:31 am
What struck me about that text I pasted above from a Quakers website about how to lobby your Congressman to help pass the bill was that it said that the five co-sponsors of it "re-introduced the JUBILEE Act (H.R. 1130)". Re-introduced?

Turns out there was a previous "Jubilee Act", which was launched ahead of the Jubilee year 2000. Full name "Debt Relief for Poverty Reduction Act of 1999" (H.R.1095). It eventually gathered no less than 140 co-sponsors; here's the bill summary on the Congress website. I don't know what the end tally was in terms of Democrats/Republicans, but of the first 123 co-sponsors of the bill, 105 were Democrats and 18 Republicans, according to this Jubilee 2000 page of the Religious Action Center of Reform Judaism. Unfortunately it got stuck in the legislative process, being referred to one then the other (sub)committee until it had "been in the Committee on Banking and Financial Services since March 1999".

But that had not been the end of the story even before this "reintroduction" of the Jubilee Act. A fascinating story about the fate of the original Jubilee Act and what was done for it is this account in The Journal of Pastoral Care by a retired pastor, who prayed and fasted for some 45 days in the halls of Congress to lobby for the bill.

He and his supporters feared Jesse Helms' bitter opposition, but were actively supported by Democrat Joe Biden - and eventually got unexpected goodwill from Tom Delay. Moreover, the man, David Duncombe, only stopped his fast in the end because Representative Spencer Bachus, an Alabama Republican, pledged to continue his fast in Congress, inviting other congressmen volunteers to do a relay fast.

As noted above, it was initially all for naught, with Duncombe observing in August 2000 that the debt relief bill he championed was "technically alive but in fragments" - and without the required funding being set aside for it. "This session began with an ever bleaker outlook", he noted then, pointing out that the House Appropriations Committee had approved only $68 million of the needed $370 million. But "Then things began to turn around", he recounted:

In what has been called the "Wednesday Night Miracle," the House Appropriations Committee's $68 million vote was unexpectedly overturned by a bipartisan coalition in what resembled more a revival meeting than a sleepy late night legislative session. Speaker after speaker arose to talk about the need for human compassion, human justice and "doing what is right before God." When the vote was taken, the House had more than tripled the $68 million-and with money that had been earmarked for foreign military aid! Twenty-six Republicans crossed over to provide a 216-212 margin of victory. As one veteran congressional observer commented: "Wednesday night broke the back of the Republican opposition to debt relief."

Note that although the debt relief cause was championed in particular by a small group of devoted religious Republicans, the bulk of its support in Congress was from the Democratic caucus, with only a small minority of Republicans "crossing over" from the Right's disapproval. They were supported also by President Clinton, who "promised to veto any amout falling significantly short of the $475 million he [was] asking". Duncombe went back to fast and pray another 50 days to lobby for the funding and on October 25, 2000 "both houses of Congress passed, and the President [Clinton] signed, funding for dept forgiveness totalling $435 millon. [..] Representative John Kasich (R-OH) called the vote an historic act of grace and Representative John LaFalace (D-NY) claimed it to be the most important foreign policy initiative for the new millennium."

Well, now we are four years on and it looks like more progress is being made (and, dare I say, that it's been helped along a little by a President who seems a little more willing to move than the Republican leadership used to be, perhaps thanks in particular to the religious activism on the subject). Meanwhile, I think the story above offers a very nice example of how liberals and devout Christians can find each other, and work together, in a common cause and a common language: that of solidarity with the poor of this world. And overcome the opposition of traditional, free-market, national-interest-first Republicans.
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Reply Tue 12 Apr, 2005 12:17 pm
blueveinedthrobber wrote:
Not being a devils advocate here, but if only ten percent of their revenue is being spent on debt relief and they still can't educate their people with the other 90% can they generate enough revenue to make progress in the first place or will they always be poor or have to borrow more money to stay afloat and start the debt cycle all over again which is throwing good money after bad?

I dont see it as an either/or question. Yes, a major cause/problem of poverty in the poorest countries is noxious government policies. Countries that spend more on their military than on education and health combined. The awareness of that has come ever more at the forefront of development aid policies. The Dutch government for example moved from giving bits of development aid to various poor countries to focusing its aid on selected countries that satisfy some basic standards of fair/durable government policies. So when it comes to weighing the giving out of development aid with the responsibility of the governments there themselves I think it's a fair enough question.

But debt relief I see as a separate question. Hanging the leaden weight of heavy debt payments around a country's neck isn't going to help in terms of encouraging durable government policies either way. Using actual aid judiciously, OK, but I dont think that insisting they keep paying back some unsurmountable debt is going to encourage any positive behaviour. Just makes them resigned: whatever growth they would create is just going to be siphoned off by debt interest anyway. And personally I think its scandalous that dirt-poor countries (because however they spend their money, dirt-poor they are to any standards) have to spend 10% of their income to pay off our governments, to whom those same amounts are mere pittances, and who in comparison dont need it at all.

My line is: cancel the debts of the poorest countries altogether (and provide emergency relief whereever disaster strikes); and conditionalise all the extra development aid you should be giving on good governance criteria.
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