Debt-relief is far too urgent a challenge to be left to the bureaucrats

Share

In some respects, the problem is perhaps all too familiar: a surfeit of spin. Just a year ago, at the G8 summit in Cologne that brought together the Group of Eight leading industrialised countries, world leaders boasted of their munificence in writing off much of the debt that has crippled some of the world's poorest countries. Excited headlines spoke of the $100bn forgiveness of debt. Gordon Brown, the Chancellor of the Exchequer, spoke glowingly of how such relief would begin "within weeks".

In some respects, the problem is perhaps all too familiar: a surfeit of spin. Just a year ago, at the G8 summit in Cologne that brought together the Group of Eight leading industrialised countries, world leaders boasted of their munificence in writing off much of the debt that has crippled some of the world's poorest countries. Excited headlines spoke of the $100bn forgiveness of debt. Gordon Brown, the Chancellor of the Exchequer, spoke glowingly of how such relief would begin "within weeks".

Now, here we are, one year on - and almost nothing has changed. President Clinton talked last year of "a historic step to help the world's poorest nations achieve sustained growth and independence". Instead, however, we are still enmired in bureaucracy, as though the governments themselves begrudged the decision that they claim already to have taken. The United States, for example - because of shenanigans in Congress - has managed to produce not a single cent of the $600m that was promised as a contribution towards the trust fund that was intended to cover debts to the World Bank and the International Monetary Fund.

The issue itself is not morally easy, even when it seems to be. Certainly, the repayment of debt can become a crippling burden to poor countries that are trying to drag themselves out of poverty; the debt repayments become a millstone that drags them ever further downwards. Many countries spend more on loan repayments than on health and education combined. In those circumstances, it seems that the solution is obvious: "Can't pay? Don't pay!" sounds, on the face of it, like an attractive slogan of encouragement for the poor.

In reality, waving a financial wand of forgiveness does not in itself provide the answers. Writing off debts without making any serious attempt to transform the economy is merely a recipe for ensuring that those countries will not receive any loans in future. In effect, it is a way of rubbing the poorest countries off the map, casting them into permanent oblivion.

Credit worthiness, whatever measure is used, is important if the countries are to have any chance of obtaining further loans and making worthwhile investments in the future. In the past, there has been a problem with the wealthy and corrupt dictators who have happily creamed off millions or billions of pounds of loans into their Swiss bank accounts, leaving their countries more poverty-stricken than before. That absurd situation cannot be allowed to arise again.

Clare Short, the Secretary of State for International Development, was right to point out that delivering new money does not always make much sense. As she rightly notes, "You can't just throw money at a country that is buying lots of arms and perpetuating war." Equally, however, it is wrong to suggest that debts must continue to be repaid, even if that means dragging a country downwards just when it might otherwise be coming up for air. Nor does it make sense to punish new democrats for the sins of old dictators.

The problem in the past year - quite apart from the overblown spin of last year's announcements in Cologne - has been that there has been too much bureaucracy and too little trust. It has become almost impossible for poor countries to prise open the Western purse. If governments can make a convincing case for showing how they would spend money, they should be allowed to do so. So far, only $10bn out of the promised $100bn of debt relief has been delivered. Given all the hype, that is too little. Cologne produced big words. Okinawa should make it possible to convert those to big deeds.

React Now

Latest stories from i100
iJobs Job Widget
iJobs General

Ashdown Group: Senior Marketing Executive- City of London, Old Street

£40000 - £43000 per annum + benefits: Ashdown Group: Senior Marketing Executiv...

Ashdown Group: Marketing Manager

£40000 - £43000 per annum + benefits: Ashdown Group: An international organisa...

Ashdown Group: Internal Recruiter -Rugby, Warwickshire

£25000 - £30000 per annum: Ashdown Group: Internal Recruiter -Rugby, Warwicksh...

Ashdown Group: Marketing Manager/Marketing Controller (Financial Services)

£70000 - £75000 per annum + benefits: Ashdown Group: Marketing Manager/Marketi...

Day In a Page

Read Next
 

Letter from the Deputy Editor: i’s Review of the Year

Andrew Webster
RIP Voicemail?  

Voicemail has got me out of some tight corners, so let's not abandon it

Simon Kelner
A Christmas without hope: Fears grow in Gaza that the conflict with Israel will soon reignite

Christmas without hope

Gaza fears grow that conflict with Israel will soon reignite
After 150 years, you can finally visit the grisliest museum in the country

The 'Black Museum'

After 150 years, you can finally visit Britain's grisliest museum
No ho-ho-hos with Nick Frost's badass Santa

No ho-ho-hos with Nick Frost's badass Santa

Doctor Who Christmas Special TV review
Chilly Christmas: Swimmers take festive dip for charity

Chilly Christmas

Swimmers dive into freezing British waters for charity
Veterans' hostel 'overwhelmed by kindness' for festive dinner

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all