The 19,000 people who die each day from poverty-related diseases pass on without much notice from people who live comfortably in America. We would rather look away thinking, 'America cannot solve the problems of the world. We have our own problems.' We must face the hard reality that our government is not just failing to address the plight of the poor, but is actively supporting policies that cause impoverishment and misery.
Far from aiding poor countries, wealthy countries and the international financial institutions, they control drain resources from poor countries in the form of debt collection. Contrary to popular belief, the net flow of money is from poor to rich. For example, on average, Africans pay $1.51 in debt service for every $1 they receive in aid.
The current system resembles a new form of colonialism where the poor are being exploited to further enrich powerful countries.
The debt crisis began in the period of decolonization in the decades following World War II. During the 1960s and 70s, leaders of developing nations were encouraged to borrow vast sums of money from the World Bank, the International Monetary Fund foreign nations and private creditors. Rising interest rates in the 80s caused debts to skyrocket and poor nations are now saddled with unpayable debts spiraling out of control.
One reason to drop the debt is that it has already been paid. The enormous Third World debt is the result of compounding interest. The principle loan has been repaid several times over. Nigeria is one extreme example where the original loan was $5 billion; Nigeria has paid back more than $16 billion, but still owes $37 billion.
Nigerians have seen the rate of poverty rise to seventy percent while they continue to pay back wealthy creditors.
What's more, those who must bear the debt burden did not receive loans. Funds from loans were mostly sent right back to G7 countries by purchasing military equipment, importing foreign goods and contracting multinationals for large development projects. The beneficiaries are big corporations, a tiny collaborating class within the developing country, and corrupt leaders who often become fabulously rich. The rest of the population must foot the bill in a system where wealth and profits are privatized and costs are socialized.
Wealthy nations that dominate international financial institutions encouraged lending to regimes such as Saddam Hussein in Iraq, General Suharto in Indonesia and the racist apartheid government in South Africa knowing funds would be spent on palaces, private jets, torture and repression. In a situation that would be funny if it weren't so grotesque, people must now pay for their own oppression, with interest.
Even nations that have faithful leaders seeking to lift their country out of poverty are trapped within the system.
Highly indebted countries with sinking economies have little choice but to turn to the IMF for relief. The IMF loans come with conditions attached as part of structural adjustment programs. SAP's generally demand lower barriers to trade, devaluation of currencies, privatization of state owned industries, wage restrictions and worst of all cuts social spending.
Surrendering a nation's economy to private firms and cutting social spending has increased poverty and further indebted the poor. Corporations are in paradise being invited to exploit natural resources, employ cheap labor, and purchase state owned industries, often at incredibly undervalued prices.
Rather then promising more aid for development, simply canceling the debt will allow nations to access their own resources. It is estimated that between $7.5 and $15 billion is needed annually to fight HIV/AIDS in Africa while Africa pays out $13.5 billion in debt service every year-handicapping the HIV/AIDS battle at the beginning.
Every African nation spends more on debt payments than on healthcare. Governments have had to impose fees for primary education causing enrollment to decline to 50 percent for children six to 11 years old in sub-Saharan Africa. Former Tanzanian president Julius Nyerere asked, "Must we starve our children to pay our debts?"
There are signs of hope. When pressing other nations to forgive Iraq's odious debt and help pay for reconstruction, President Bush voiced support for canceling third world debt. Several US Congressmen have re-introduced the JUBILEE Act prescribing 100 percent debt cancellation for fifty nations without conditions attached.
Debt has become a new form of bondage where unborn children inherit a legacy of exploitation making survival a challenge never mind prosperity. Our true power to change the world lies in our ability to influence policies at home. Change is within our reach and to fail to act is to accep t one's role in the perpetuation of world poverty and suffering.
Ethan Burke is a Collegian columnist.
