Debt Relief at Last?

During the last few months,

During the last few months, desperately needed progress has been made on debt relief for the world’s poorest countries. In the lead-up to October’s World Bank and IMF meetings, the U.S. Treasury floated a plan to cancel 100 percent of the debt owed to those institutions by about 30 extremely poor countries.

The need has never been more urgent. Foreign debt is the gift that keeps on taking—many countries, even faced with runaway rates of AIDS and poverty, are forced to spend more each year on interest payments than on education or health care. African countries pay almost $15 billion a year in interest—one and a half times what the AIDS-ravaged continent receives in foreign aid. And debt relief works; the limited debt relief awarded so far has helped countries put millions of children back in school, vaccinate kids against deadly diseases, and fight HIV infection rates.

The Treasury plan isn’t perfect. At least 20 more countries are in great need of debt relief, and the plan is likely to include harmful demands. At press time, it wasn’t clear whether the G7 finance ministers would accept the U.S. plan, or whether activists will have to focus still more pressure on wealthy governments leading up to the G8 meeting in Scotland in July 2005. But when debt relief happens—and, for the survival of millions of the world’s poor, it must happen—there are several lessons we can learn from the past mistakes.

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Sojourners Magazine November 2004
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