And so the G8 group of rich, industrialized nation, at a meeting in Britain, in an announcement made by Britain’s Chancellor of the Exchequer (and next PM) Gordon Brown, agreed to forgive billions of dollars in debt owed to the rich nations by poor, overwhelmingly sub-Saharan African nations, which would amount to a savings estimated at $1.5 billion per year.
This, at least, appears to be something new and something for real, as opposed to our President’s pronouncements in recent days of impressive sounding aid programs to Africa that amount to nice-sounding-restatements of… existing programs. And it may make some difference, at least in some sectors.
Of course, the problem in some of the poorest of the poor countries is governmental corruption, on scales representing, for example, the overwhelming portions of government spending going for graft, rampant bribery, and that sort of thing; to the extent that sovereign debt relief eases that sector, we will, in some cases, at least, just look at the corrupt officials simply increasing their take-home-pay, as some money they HAD to not steal (debt payments) is freed up. Just between us girls, this is most of what will happen here– although some people in the First World can, I guess, feel better about it.
Of course, in some of the relatively more honest regimes, this will enable resources to actually be used on government services like desperately needed infrastructure,public health, that sort of thing. The “moral” aspect, of course, is interesting, given that this comes in a year that the United States (the largest net creditor in this sphere, IIRC) has decided to be most unforgiving of its own individual desperate debtors in passing the Barriers to Bankruptcy Act. But we’ve talked about that already…
Anyway, this is an opportunity for me to talk about the only thing that will bring meaningful relief to sub-Saharan Africa and other desperately poor areas of the world during our lifetimes: removing arbitrary First World trade barriers to agriculture and other basic industries. It’s as simple as that: by throwing open our borders to the industries most likely to improve the economies of the world’s poorest nations, we will not only improve their ecnomy, but increase the available supply and hence ultimately lower the prices of food here and world wide, not to mention other basic industrial products like textiles.
Of course, just as French farmers (less than 10% of the French population, btw) seem to control the entire EU in order to maintain their greedy subsidies, so American “agribusiness” (again, representing, I’m guessing, less than 10% of our population) insist on our convoluted system of trade barriers and taxpayer subsidies (for example, we pay a heavy multiple over the world price for sugar, so that the big-time GOP donor Faneuil family in Florida can literally control the domestic market, and destroy the Everglades to boot).
It would be win-win, helping the world’s poorest nations and the American consumer at the same time. Of course, politically, it will adversely effect major donors (of both parties, to be fair), and therefore, I’m afraid, it won’t happen…
Well, at least some of the “debt relief” money may trickle down to the world’s poorest. For that, I guess, we can celebrate…
tdog
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