[Maynard]

Hello all!

I've been browsing these forums for a while, but have never bothered to actually post. But now I will!

I have to lead a seminar for the current politics course I am taking in university. I've been assigned this question: Should countries dismiss debt of poor countries?

I would like to hear your thoughts and feeling about this, and to hopefully start a discussion.

Thank you all very much for your time!

[Maas]

Should countries dismiss debt of poor countries?

My country already does.
There are some islands in the caribean that used to belong to us. We loan them money... billions. They fuck it up. Governments talk about how it went wrong this time. All get foregiven. And than billions more go missing the next time. To think sometimes them islands say that they dislike the way my country sais how they should run their island.

It's a crappy deal. Every time....

[NoRapture]

Should countries dismiss debt of poor countries?

Only for oil. Or child labor if they have it. The US doesn't have child labor so NAFTA has made it possible to do business with some of the poorer, more free-thinking governments who do.

[Goranhammer]

No. I won't go into length why because it's obvious. Just no. No. Hell no. Hell fucking no.

[HoniSoit]

Should countries dismiss debt of poor countries?

Yes - especially given that many poor countries are now borrowing money merely to repay the interests of previous loans.

As these countries sink further into the debt, they often have to cut back (often on orders of international lending institutions) on social spendings such as healthcare, education and social security which are often vital to build a strong economy, and they are also often forced to privatise national industries, and reduce government involvement in the economy which are in fact crucial in the development of that economy. Under the situation of heavy debt, it's also unlikely that any foreign capital would make investment in these countries, thus further inhibiting revival and development of the economy.

Furthermore, if you are not to limit the scope of your presentation, partly depending on your politics, you may talk about how the structures of the third world economies, much of whom are former Western colonies, were modified by the colonial powers to serve the metropolitan centres by opening up the third world markets and providing raw materials to the colonial powers which have helped to perpretuate the un/underdevelopment of the third world. You may like to check out the works by Paul Baran or this article.

[Maxim Litvinov]

Yes. It's obvious why. You can't recover debt from a murderous idiot's good brother legally, you shouldn't morally and it has disastrous consequences practically.

[Zyx]

Yes; there is no reason that these "poor countries" should be in debt to the rich countries. But more to the point; I do think that some sort of civil infrastructure should be invested in as well . . . if we are going to claim a "nation" borrowed money; that leader should at least be a right minded and smart individual . . . claim, say, America owes three trillion dollars to China for China acknowledging the Frat boy on my campus as America's leader, is a mockery of the banking system.

I use the familiar example because . . . it's familiar and does not lose the effect that I am getting at.

[Sulla123]

The problem should be talked about. And generaly that problem is that very corrupt and poorly run countries barrow money then wast it. Then get debth relief then repeat cycle.

[theodd1out]

Should countries dismiss debt of poor countries?

You've gotta be kidding no? yes you are kidding, do you expect the G9 who have gone over many discussions about forming the WTO and the IMF to strongly favour themselves to actually dismiss debts of the little guys?regardless of what anyone thinks it aint gonna happen.
Dog eat Dog world here, as you get older youll become more cynical like me dear

[Noelnada]

I think we should not destroy the debts , but rather freeze the interests of the debt for poor countries so they can pay it when they have done something with our help .

But on the other hand , we should not destroy the American debt that is three time bigger than the whole third world debt(i think).

America is going to pay , cheap oil or not .

[Far-Right Sage]

No, of course not.

If Tanzania owes the United States money, for example, it is in our interests to collect; ignoring the debt will only help Tanzania.

[NoRapture]

And generaly that problem is that very corrupt and poorly run countries barrow money then wast it. Then get debth relief then repeat cycle.

And then buy wine with it...

[hannu]

No, of course not.

If Tanzania owes the United States money, for example, it is in our interests to collect; ignoring the debt will only help Tanzania.

Most of the loaned money would not go to Tanzania.

A large portion would have gone back to people in the US as backhanders & a large portion would be siphoned off to private Tanzanian individuals.

Why should people who never recieved all of the loan money be expected to pay all of it back?

[Zagadka]

No.

The main - only - modern program shown to be effective at rebuilding nations is the Marshall Plan. It is outdated, yes, but the core is still the same.

Were America to not forgive the debts of Germany, France, Japan, etc (and the Soviet Bloc doing the same thing), most of Europe would still be in debt to the US. That may seem well and good to nationalists, but it would completely screw global economics.


EDIT:

Furthermore, we should be helping those poor countries to stand up on their own, via accepting trade with them, even a a loss. In hte long term, that investment matures, and having made good friends...

^^^ the logic of forgiving WWII debts. I think that Western Europe, Japan, and Korea are still friendly, no?

[sploop!]

Yes, absolutely we should be dismissing these debts. Many of them were unfairly constructed in the first place, and were really about selling useless stuff at a rip-off price to dictators put in place and supported by the West, who never needed the stuff they bought in the first place.

Indonesia owes Germany for the purchase of warships bought by the Suharto regime. Indonesia also owes Japan for the cost of an Aluminium project, which was selling (wait for it) cheap Aluminium to Japan. The US lent the dictator Ferdinand Marcos of the Phillipines $900million to build a nuclear power station using American technology, which has never produced a single watt of electricity. The list goes on. It would definately be worth your while doing a search to see how the debts were arrived at. Look out for the dodgy arms deals designed to keep sympathetic Dictators in place.

Here's a deal to start you off...

http://en.wikipedia.org/wiki/Bataan_Nuclear_Power_Plant

[Red Star]

The whole framework of lending has to be changed. The IMF and World Bank's structural adjustment programs don't work and make it impossible for economies to ever re-pay their debts. Regional trust funds have to be set up with stricter observation on how money is spent.

The whole program we have right now is just not good.

[Goranhammer]

Plenty of countries are able to pay back loans. Ask Brazil.

The only problem is that countries borrow but borrow for the wrong reasons. They don't take money to improve their economy in the hopes of paying it back.

It's like the difference between someone taking out a loan from a bank to pay off student loans and someone taking one out to buy a car. One will assist in future payback and purchase power. The other is for selfish reasons.

If countries become notorious for defunct debt, other countries just won't give them money anymore. Of course, that's a good thing in my book. Once bitten, twice shy.

The biggest crime America commits to itself is international aid. We should be using that capital to help our own, not these other fucking countries. America uber alles. Everyone else, go fuck yourselves.

[sploop!]

The thing is, Goranhammer, no-one loans to a country as such. Any national loan is made to an individual or group of individuals who will tell you they have the consent of the nation to enter into this sort of arrangement.

If it happens that the borrowers don't have the consent of the people, then the loan is obviously bullshit - it obviously has no legitimacy whatsoever.

But even if the borrowers do have consent, by virtue of being elected or something, that doesn't mean no-one should be able to question the arrangement later on - especially if the arrangement turns out to be not quite as described.

Some of these loans are really crooked - surely you can see that?

The rich nations who have made these crooked deals are damn lucky I am not the leader of one of these so-called 'debtor' nations. They wouldn't see one cent of the loan paid back if I was. And to be honest, I object to my country ripping off the poor people of another nation in my name. They don't have the right.

[hannu]

Some of these loans are really crooked - surely you can see that?

I don't think most people realise that in some cases 80%+ off the loan get's filtered to private individuals.

Take a UK machinery sale to an African country. International loan to African country to buy the machine is £500,000.


Cost of machine £35,000 but the UK machine supplier charges African agent £70,000. Agent charges the African machine buyer £300,000.

African machine buyer makes £200,000. African agent makes £230,000. Machine suplier makes £35,000.

African country is left with loan to pay of £500,000 for a machine that they could have bought for £35,000.

[sploop!]

Thing is, hannu, you are completely and utterly right on this. The bit I really struggle with is, how some people seem to be unable to see it for what it is. It's just too obvious.

It's almost like there are people to our right just don't want to see the truth. I'm confused. I thought it was only the political left had selective sight...