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

Tradewind Recruitment: English Teacher

Negotiable: Tradewind Recruitment: My client is an excellent, large partially ...

Tradewind Recruitment: Science Teacher

£90 - £140 per day: Tradewind Recruitment: I am currently working in partnersh...

Tradewind Recruitment: Year 3 Primary Teacher

£100 - £150 per day: Tradewind Recruitment: Year 3 Teacher Birmingham Jan 2015...

Ashdown Group: Lead Web Developer (ASP.NET, C#) - City of London

£45000 - £50000 per annum + Excellent benefits: Ashdown Group: Lead Web Develo...

Day In a Page

Read Next
Kylie has helped to boost viewing figures for the talent show  

When an Aussie calls you a ‘bastard’, you know you’ve arrived

Howard Jacobson
The number of schools converting to academies in the primary sector has now overtaken those in the secondary sector – 2,299 to 1,884 (Getty)  

In its headlong rush to make a profit, our education system is in danger of ignoring its main purpose

Janet Street-Porter
Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

Isis hostage crisis

The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

The runaway buccaneers and the ship full of gold

Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Maverick artist Grayson Perry backs our campaign
Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

Assisted Dying Bill: 'I want control of my life'

This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
Move over, kale - cabbage is the new rising star

Cabbage is king again

Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
11 best winter skin treats

Give your moisturiser a helping hand: 11 best winter skin treats

Get an extra boost of nourishment from one of these hard-working products
Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

Paul Scholes column

The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Frank Warren column: No cigar, but pots of money: here come the Cubans

Frank Warren's Ringside

No cigar, but pots of money: here come the Cubans
Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee