Third World Debt

PHB

I was just thinking about this lately, about how the media have chose not to cover it as much recently and I was wondering if people had kinda accepted it wasn't going to be wiped.

DadaKopf

I'm not so sure people think too much about it, full stop.

Maybe the war on Iraq has brought the issue of debt to the fore but the connections still aren't being made, I don't think.

Whether it's some kind of media conspiracy? Jeez, I dunno.

Is debt cancellation likely? Don't think so. The big countries like using it as a stick to beat the little guys around with waaay too much.

PHB

So my question is, did people really care about it or did they just care about it for a while because the media told them to?

DadaKopf

I think if people took a look at (1) how it affects people's lives around the world on a daily basis and (2) how our own lifestyles are connected with that and (3) we made those connections, people would care more about debt relief, since it's one clear-cut way to help out countries crippled by repayments to the IMF and World Bank.

Why don't people care? I'm sure there are millions of reasons but I'm sure one reason is because the major news organs are refusing to make it into an issue - war is much better for ratings and, well, I'm sure there's also the factor of influence by shadowy figures at the top of the food chain.

If the politicians, media and corporate executives are now controlling the language we use and the thoughts we have then we ourselves should start talking about debt relief and educating everyone we know. People care about people but the system is conspiring to turn everyone into objects and that just means we blame someone other than ourselves and the people we elect and we encourage their behaviour though increased ratings and mass consumption.

I don't think the the fact that the media has chosen not to cover Third World Debt is an indication that the public has accepted it's not going to wiped, I think it's just because the media has decided not to report on it, so we don't talk about it.

Blaming someone else for not talking about it isn't going to get Third World Debt and its effects on the agenda unless we make it an issue. Why are we slaves to the media?

So instead of asking a question about the media and people not caring about Third World debt, make a statement, sing a song, and dance a dance. Be more assertive. Get people talking. Get people to make those connections.

Redleslie

I read somewhere that Drop The Debt estimated that 3000 people die every day from causes directly related to debt. Can anyone here clarify that or point me to a source? I don't think Saddam knocked off that many but officially he's the personification of evil. Maybe it's time to start killing economists and bankers, whoever's responsible for not abolishing the debts, and then label anyone who complains as being a loony lefty pacifist who would have appeased Hitler etc.

SkepticOne

I think the other thing that needs to be looked at is the circumstances underwhich the original debt was run up, how it was spent and by whom.

shotamoose

Originally posted by SkepticOne
I think the other thing that needs to be looked at is the circumstances underwhich the original debt was run up, how it was spent and by whom.

I think it goes something like this. In the seventies private banks in the West (or the 'North', whichever you prefer) found themselves with a massive surplus of dollars and started actively seeking out third world countries to loan to. The 3W governments were being offered big loans at effectively negative real interest rates, and thought that since their commodity prices were riding high at the time this was too good to be true, so they snapped up the loans.

Various things went wrong. Successive economic crises during the 70s drove up oil prices and interest rates and drove down commodity prices, immediately plunging many 3W countries into severe crisis and making the bulk of their debts virtually unpayable. Many of the loans had been squandared by incompetent governments, or stolen or directly transferred abroad, often with the connivance of Western banks. Both superpowers used credit to prop up favoured puppet governments. For example:

Zaire's ruler, Mobutu Sese Seko, was one of the world's most corrupt leaders and it was for his government that the word “kleptocracy” was first coined. Mobutu became one of the world's richest men, with a personal fortune estimated at more than $10 billion and palaces in Europe and Zaire. But the West saw Mobutu as a loyal ally in the Cold War (in part for his support of the US, in its backing for Unita in Angola). In 1978 the IMF appointed their own man, Edwin Blumenthal, to a key post in the central bank. He resigned two years later, complaining of “sordid and pernicious corruption” that was so serious that “there is no chance, I repeat no chance, that Zaire's numerous creditors will ever recover their loans.”

Shortly after Blumenthal's report to the IMF, it gave Zaire the largest ever loan given to an African country. When Blumenthal wrote his report, Zaire's debt was $5 billion; by the time Mobutu was overthrown and died in 1998, the debt was over $13 billion. In the six years after Blumenthal's report, the IMF lent Zaire $600 million and the World Bank $650 million. In those six years Western governments lent Mobutu nearly $3 billion. Commercial banks refused to lend more to Mobutu during that period.

Patricia Adams in her book Odious Debts estimates the Philippines dictator, Ferdinand Marcos, and his wife Imelda, pocketed literally one-third of the Philippines' entire borrowing – much of it in the form of kickbacks and commissions on aid and loan-funded projects. His personal wealth when he was overthrown was $10 billion.

From Dictators and debt by Joseph Hanlon.

The government and by extension the ordinary people of the Philippines are today still expected to pay back the loans that Marcos stole. Zaire has had some debt relief under the HIPC programme.

The issue of Third World debt has never been properly addressed since. Mexico defaulted in the 1980s and the IMF and World Bank were given the job of making sure that this never happened again. As lenders of last resort they were able to effectively dictate economic policy to dozens of countries. They made debt servicing rather than debt reduction their priority. Hundreds of billions of dollars are transferred from poor countries to rich ones every year in debt service.