FFWD Weekly
Copyright © 1998 All Rights Reserved.
| VIEWPOINT For those of us who are tired of the endless homilies from conservatives and liberals about the saving grace of free markets, it is satisfying to see the global economic crisis embarrass the liberal economic gurus. Until now, speaking out against the great faith of the '90s, laissez-faire economics, would get you cast out of society and branded a heretic. Today, the powers-that-be are scratching their heads and admitting that the economic world order they created does not make sense. Elite policy makers have finally confessed they no longer have control of the world's financial markets (if they ever did). Facing a global recession, Western governments and financial institutions are desperate to find a cure for the economic flu before it spreads to their voters and campaign contributors. Ideas that governments refused to even consider one year ago, such as currency controls, are the new true path. Unfortunately, the most humane and important policy, debt relief for the poorest countries in the world, has been pushed aside in the rush to save the stock markets. The world's richest nations, the Group of Seven (G-7), spent last weekend trying to come up with answers to the economic crisis. All this week, International Monetary Fund and World Bank officials met in Washington to consider the same problems. U.S. President Bill Clinton declared that innovative thinking was needed to prevent the problems from getting worse, but the issue of debt relief was absent from the "world's" economic agenda. It should not be ignored - the current economic meltdown is pushing millions of the world's poorest people closer to death from starvation and disease. In the last year, millions of Southeast Asia's poorest citizens went from tough but survivable circumstances to abject poverty. Even when it was a popular issue - the G-7 declared debt relief for poor countries a priority in the '80s - the world's leaders rarely managed to get past the rhetoric. There are 33 countries that should qualify for the Highly Indebted Poor Countries Initiative (HIPC) that was set up in 1996. Despite the initiative being discussed at every G-7 meeting since, the top industrial countries in the world have failed to make the program a reality. In May, the G-7 only managed a statement urging wealthy countries to contribute to the initiative. The HIPC has some serious flaws. Its problems include qualifications that make it difficult for countries to get into the program (only seven have been accepted), painfully strict requirements for the debtor country to restructure its economy to stay in the program, and no conditions or assistance for the debtor country to attack poverty issues. These issues are important for countries with little or no health or education infrastructure, but under-funding is the most serious problem in the HIPC program. It cannot find the $8 billion needed to fund its modest debt-assistance program. Those countries that have contributed have failed to act generously; others have failed to act at all. The smallest nation in the G-7, Canada, leads the list with $27.6 million (U.S.). Japan, the U.K. and France follow with $10 million, $20.5 million, and $22 million in contributions, respectively. The U.S. and Germany have yet to donate any money to the program. This debt problem is not about dollars, it is about people. In May, the Guardian Weekly reported that the African country of Niger, where 90 per cent of the population lives on less than $2 U.S. a day, and 30 per cent of children die before the age of five, could develop an inoculation program with the $1.2 million it makes in yearly debt payments to Britain alone. HIPC is not even about forgiving debt, it is about reducing the debt payments so that these countries can develop meaningful education and health programs while paying their debt back at a slower pace. Compared to the IMF's recent $90-billion commitment to Asian countries, $23-billion loan to Russia, and $30-billion rescue package for Brazil, the $8 billion required to give these 33 countries even a fighting chance seems like chump change. The lives the program could save are not. |