This weekend, the Eighties are back with a revival of the massive concert cum charity event experience. In London, Paris, Rome, Berlin, and Philadelphia multimillion dollar music acts will perform at Live 8, an event designed to pressure the G8 leaders to forgive Africa’s international debt of more than $40 million.
At first blush it seems like a great idea. How could these countries develop economically if all their money has to go toward paying the interest on their loans. Every person with a loan or credit cards can identify. But is just wiping out the debt the best solution?
World magazine echoes my own thoughts on this. It warns that a blanket forgiveness doesn’t help poverty stricken families, but rewards the corrupt and inept bureaucrats who caused the condition in the first place, setting the stage for them to get back into the debt they just go out of. After all, it happened once before. Between 1989 and 1997, $33 billion in debt was written off for 41 poor countries. As of today, those countries have incurred new debt totaling $41 billion.
They list the facts as opposed to the media hype on African debt:
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Debt relief goes to governments of poor countries, not to poor people.
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Debt relief rewards poor countries with high debt without assisting the impoverished in equally poor but low- or no-debt countries.
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Macro-goals make little room for the only kind of accountability that works: local supervision over the performance of specific programs on the part of bureaucrats, nongovernmental aid agencies, and church-based relief workers.
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Debt elimination would have a chilling effect on credit.
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Debt elimination would have a chilling effect on private charity.
Meanwhile, the US alone gave $16 billion in aid to Africa in 2003 and private charities gave more than $35 billion in 2000. Plus the billions given by other countries on top of those loans.
What Africa needs is not debt forgiveness, but democratic reform, the rule of law, free trade with the West, and an end to the brain drain of the best and brightest from those countries. Unfortunately, those don’t fit neatly on a bumper sticker, they take hard work over a long period, and they’re difficult to translate into grand gestures like tearing up a bill for $40 billion. And that’s why grandstanding politicians and rock stars don’t like them.
a little closer to home: let’s not forget that the Archdiocese of Boston forgave the debt of numerous parishes as part of the millennium celebration. Lots of good that did.
Yeah, most of those parishes got themselves back into as much debt as they were in before.
“But Higgins is a heathen and he drives the weary quill, and lends the poor that funny cash, that makes them poorer still” -Chesterton of course…
I read this post with interest, as I figured cancelling these debts was an unequivocally good thing. But what do we do to help them, then? Assuming we were able to help them get honest leaders in their government, if they had billions in debt to pay off, wouldn’t that severely hamper whatever good the new leaders might be able to accomplish?
What do you think of the both-and approach? Both Cancel their debt AND make it dependent on fair elections and good government (somehow)?
You’re on the right track, Devin. First, reform, then debt forgiveness. I’m all for forgiving the debt, but only when it will do them some good, not continue the spiral of corruption and poverty.
It’s the same thing in other areas. Generous Americans poured out millions of dollars in aid money after the tsunami, but now we hear documented stories about millions of dollars of supplies rotting on docks in Sri Lanka because of the bureaucracy and corruption and lack of infrastructure.
Aid, yes, but effective aid.
My sentiments exactly.
If the original Live Aid money had gone to eliminating corruption (how do we do that? I’m not sure, but I have some less than savory ideas) 20 years ago things might be better.
So the kids have their awareness raised. But are they “aware” of the real problem?