Saturday, June 11, 2005
This seems like a big deal. Debt relief sounds so good and seems fair. Why make very poor countries spend what little money they have servicing debt that was accrued a long time ago, often times by former regimes who squandered the money? I am lukewarm on it because many economists believe that it sends the wrong signals to third world leaders. If I am a corrupt third world leader, why not accrue a bunch more debt to squander and line my pockets with if it is just going to get cancelled a few years later? If I believed that the international lending agencies (World Bank, G8, IMF, etc...) really would and could enforce anti-corruption provisions in these types of arrangements I would be all for it. It is much better to have African countries spending what little they have on Education and Aids treatment/prevention rather then servicing debt. But the real question is, will these countries actually do that with the extra funds available or will corruption take the place of debt payments?