Newspaper article The Christian Science Monitor

Debt - the Next Cause Celebre?

Newspaper article The Christian Science Monitor

Debt - the Next Cause Celebre?

Article excerpt

With India exploding bombs and Indonesia exploding, the Group of Eight leaders needed prodding when they met for their recent economic summit in Birmingham, England. They got it in spades when 70,000 protesters took to the streets to demand the lifting of third-world debt. They were part of a growing international campaign called Jubilee 2000.

It is hard to imagine that an issue like debt relief could bring out the crowds. But politicians should beware. They may be facing another international coalition similar to that on landmines, which won last year's Nobel peace prize. Third-world debt evidently triggers a powerful sense of outrage at the hypocrisy in international economic relations, exemplified by the contrast between the treatment of Asia and Africa.

The economic bailout of Asia shows that the Group of Eight can move swiftly when it comes to keeping their investors purring and preserving the almighty stock market. Helped by calls from the White House, the International Monetary Fund has been able to muster over $120 billion for just three Asian nations - Thailand, South Korea, and Indonesia. Even the World Bank bent its own rules and offered $3 billion to South Korea. Contrast this with the limping efforts to relieve third-world debt. In 1996, the World Bank and IMF were given the green light to cancel $7 billion of debt owed by 20 poor nations known as Heavily Indebted Poor Countries (HIPC). This rescue plan is miniscule compared with the Asian bailout, but it is arguably more justifiable. The total outstanding debt of these countries is $100 billion - it acts as a massive brake on development. Africa spends four times as much servicing debt as it does on health and education. Would debt relief translate into social spending? Uganda has shown that it can happen with the right kind of international guidance and an honest government. The World Bank-IMF HIPC initiative holds governments to extraordinarily tight conditions. …

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