At first glance this appears to be a good thing:
The United States and Britain have reached an agreement on how the billions of dollars that the world’s poorest nations owe to international lenders can be erased, removing the last impediment to an accord long sought by the richest nations, a senior official involved in the negotiations said Thursday.
Treasury Secretary John W. Snow and his British counterpart, Gordon Brown, the chancellor of the exchequer, will present their proposal to a meeting of the finance ministers of seven of the Group of 8 industrial nations on Friday in London, the official said.
The plan would free 18 countries, most of which are in Africa, from any obligation to repay the estimated $16.7 billion they owe the international lenders, said the official, who requested anonymity because a formal announcement of the agreement had not been made. The debts will be written off by the lenders in an effort to allow the debtor countries to start fresh, get their books in order and eventually be able to borrow again for economic development, health, education and social programs, rather than simply to repay existing loans.
I would rather just see aid in the form of, well aid, than more future loans. At some point something is going to have to be done to break the cycle of loans followed by default followed by debt relief followed by more loans. It just doesn’t make sense.
Darrell
John, just curious as to why your first reaction is that spending/forgiving all this money in 3rd world countries is a good thing?.. rather than what it really seems to be: lining the pockets of the corrupt politicians in those countries while rewarding the policies and the politicians which are causing the economic hardships in these countries now now
I’m all for helping those in need who are seriously making reforms, but this aid should have been vigorously debated in Congress to try and vent out which countries, if any of them, are good candidates for reform. I’m disturbed that Bush can spend this kind of coin in aid without getting Congressional approval
Kimmitt
It’s insane to hold a country accountable for a debt which was accrued under a dictatorship.
Darrell
I agree with that Kimmitt. The only exception would be unless we can recover previous aid from the dictators’ Swiss bank account
The Phnom Penh
I actually live in one of those 3rd world countries, and I can tell you that your concerns about the aid going to those who need it least is well-founded. The mansions of the prime minister and his family are a slap in the face of the poor.
An even bigger problem, though, is that the aid goes to projects which, in the long run, are not sustainable. Disaster relief is one thing, but development money should go to create long-term economic improvement for everyone. There’s almost no money here to, say, teach people how to run a business, or to help them start one. On the other hand, there is avalable aid to buy computers for remote villages. The village can’t afford a network connection, and machines need a lot of maintenance in this climate. Once the NGO leaves, the computer will become a fancy doorstop.
It’s a JANFU, involving donors, NGOs, and the government here.
And don’t get me started on the abstinence-only idiocy.