UK to write off poor nations' debt

Redleslie2

http://news.bbc.co.uk/1/hi/uk_politics/3689556.stm

Bit surprising really. All the street protests and campaigns may have had some effect after all. Nice timing considering the next G8 summit is in Scotland. I wonder what the catch is though.

mycroft

Before Genoa the G8 promised to write off off 1/10 of all 3rd world debt, they have failed to meet even 1/3 of the 1/10 of the debt that they swore to be absolved as part of the jubilee 20

Champ

That's great news; though you do have a point in that there would likely be a catch somewhere...exclusive rights or access to resource X perhaps?

I don't doubt there are altruistic people in society; i just didn't imagine i would see something like this happen.... especially considering the history of the situation.. e.g borrowing to pay off interest of an existing debt; and then having to borrow to pay the interest off that... :rolleyes:

Hopefully these countries will have capable leadership to use this relief to start long term benefical projects.... i.e infrastructure & economy not importing weapons...

mike65

Maybe its exactly what it says it is.

Mike.

therecklessone

mike65 wrote:

Maybe its exactly what it says it is.

Mike.

My thoughts exactly.

shotamoose

Great news. Not enough by any means, but it's another step forward.

arcadegame2004

I would welcome this. although I feel that conditions should be attached to the affect that these Third World government's concentrate their resources towards helping their poverty-stricken peoples, instead of buying MIG or F16 etc. fighter-jets, tanks, missiles etc. The Third World governments are mostly partially responsible for the mess they are in, due to their endless civil wars and stubborn insistence on spending what little wealth their countries have on arms and on mansions for their rulers, e.g. so-called "Gracelands) mansion build by Robert Mugabe and the President of Equatorial Guinea pocketing the country's oil-wealth for himself and other members of his brutal regime. As Ireland has shown, there comes a time when you can no longer fairly blame the former colonial-power(s) for problems in your country's economy. We now have higher average-earnings in this country than the UK. So please let us not be duped into believing that the West is to blame for every problem that affects Africa and other parts of the Third World. Are we partially to blame? Yes. The high tariffs on Third World exports to the First World are damaging the export-industry in the Third World. However great steps towards fairer-trade in recent years e.g. the EU's "Anything but guns" policy-change a few years ago abolishing tariff-barriers on a wide range of Third World exports to the EU, help to illustrate that the West is not solely to blame for Third World poverty.

shotamoose

arcadegame2004 wrote:

The Third World governments are mostly partially responsible for the mess they are in

Which is it, mostly or partially?

However great steps towards fairer-trade in recent years e.g. the EU's "Anything but guns" policy-change

It's actualyl "anything but guns AND rice AND sugar AND bananas", which is a rather important qualification.

help to illustrate that the West is not solely to blame for Third World poverty.

Who said it was? I mean, who here is saying that 'The West' is solely to blame for all Third World poverty?

arcadegame2004

Which is it, mostly or partially?

I understand in hindsight that the way I put that is capable of causing some confusion as to what exactly I meant.

I meant that in MOST cases, the Third World government shares the blame for the mess it's in.

Gurgle

arcadegame2004 wrote:

I meant that in MOST cases, the Third World government shares the blame for the mess it's in.

And the wind-fall of having the national debt cancelled is more likely to go into the governments' back pockets than into developing into a second world country.

Pigs flying over the ice-caps of hell, me agreeing with arcadegame....

MadsL

Of course if we were to allow third-world farmers to fairly compete in the world rather than allow protectionist and expensive farm-subsidy to continue ad nauseum in Europe and the US, then perhaps they could not only achieve relative economic growth, and less famine, but also stable democracy, education and an chance at relieving their debt burdens. Africa can feed not only itself, but the rest of the world too.

That of course, as arcade points out is their governments fault. Mostly.

DadaKopf

In most cases factors such as developing countries' debt burdens, trade restrictions, inadequate infrastructure, conflict, HIV/AIDS and so on are contributing to further declines in their GDP and increasing debt dependence.

Even those countries that seem genuinely committed to economic and administrative reform, including democracy and human rights, are generally prevented from doing so because they lack the capacity to implement their own reforms that might attract foreign investment.

This is a vicious circle because countries find it hard to develop without the 'right' institutions, and the 'right' institutions (deemed by academics and donors as liberalised, market oriented democracies) require a level of economic development before they're capable of delivering services to reduce poverty.

Sounds fair enough. But even when donors come to fill those gaps, to boost governments' and administrations' capacities for development, often the developed countries are firmly in the driver's seat, no matter how equal they say their relationships with developing countries are. Very often, the policies that developing countries implement on the advice - and browbeating - of the donors are not really that suited to those particular countries. So donors/creditors waste even more money. Luckily, much of that money comes in grant form.

I dunno. Is that off topic?

Sand

A welcome intention, but well see how it pans out in implentation. Hopefully other countires will follow the British example here.

The other side of the coin is now the developing states, how they will take advantage of reduced debt. Will they invest in their infrastructure and development or just pour it into more tanks and jets?

And as already stated, the best way to errode poverty in the developing world is to continue to work to a liberal free market so that producers do not have to compete with subsidised EU and US goods - this will be to the benefit of everyone concerned.

shotamoose

Sand wrote:

And as already stated, the best way to errode poverty in the developing world is to continue to work to a liberal free market

Already stated, already disputed. Africa, the region with the highest poverty rates, is stuck in a low-savings, low-productivity poverty trap, and its dependence on primary commodities means it won't be able to trade its way out. In fact, full free trade might see it lose market share to more efficient producers elsewhere.

Which is not to say that the EU's massive protectionist barriers or CAP are good things - just that we need to look beyond 'free trade' and be aware of the possibility that it can actually hurt the poorest.