July 30, 2001
Debt relief is a very popular cause. It perfectly suits the middle class left, shell-shocked by the fall of Apartheid. Once again, they have an enemy to direct their anger at. And, the enemy is now domestic. Where only the most deluded antiapartheid campaigners thought that those to the right of them were Dutch speaking racists, they do know that those not so far to the right of them are in fact supporters of international capitalism. If you're about to stop reading because you think this is going to be a screed in defence of what medieval man called "usury" then you are wrong. I am not going to say that the share price of a bank is more important than feeding starving children. The argument against debt relief is stronger and more potent than that.
To give the leadership of the campaign full credit, they have realised that targeting the banks is not a good idea. Firstly, a bank's third world loan book is going to figure far more highly in their balance sheet than debt relief will in any government's. Furthermore most banks will merely offload their debt to less politically sensitive institutions, at a loss admittedly but the debt will still be there. Finally, the event will be treated in the same way as a default, with future credit lines only being extended at ruinous rates of interest. As I have said before, the debt campaigners recognise this, but they are still arguments that need restating. The drop-the-debt campaigners are a sign of a new colonising force where as before it was God and commerce that drove forward Empires, now the Third World is being colonised by smugness and pity.
Debt relief is not pushed as foreign aid. That is quite sensible, as most people are rightly sceptical of governmental aid. As Lord Bauer, the economist, said it is redistribution of wealth from poor people in rich countries to rich people in poor countries. Debt relief will be the same. The campaigners tacitly concede this point when they claim that the Third World countries do not bear any moral responsibility for their plight because the previous loans were siphoned off by their rulers. There is some merit in this argument but there are also problems. Will these new rulers not siphon off the new wealth? There are two possible answers here. Either the new rulers will not be as bad as the old ones, which is possible, or they will be even worse. There is the second, and more dangerous, argument we will now control what these countries do with the money.
Debt relief comes with myriad "conditions": governments must spend a certain proportion of their budget on public health, a certain proportion on education, etc. The governments are to submit themselves to the third-rate management consultants in the World Bank, the IMF and every other intergovernmental quango imaginable. I may be wrong, and I hope I am, but I see very few starving children being fed in this process. And what price are they paying for this? The governments of the West are now dictating the economic policies to the poorest countries in the world. Sound familiar? Its called empire.
One of the wonderful things about left-liberals is that they find it impossible to see themselves in a seriously bad light. Businessmen voting for tax cuts are selfish, civil servants voting for pay increases are "investing in public services." Similarly, I can imagine one of the most frequent objections to this piece will be: "but we can't be imperialists, we mean well." This trick of insistent non-sequitor is a handy technique gleaned from the establishment to which so many will soon belong. The Victorian Empire was also a road paved with good intentions. Missionaries like Doctor Livingston provided an advance guard to the British in Africa as much as Cecil Rhodes did.
The point about debt relief is that the dependence will never stop. With foreign aid there is still the remote chance that the country will grow gradually richer and less dependent, or, more plausibly, become for some reason less interesting and so be forced onto its own resources. With debt relief there is no chance of that. Let us bring in our old friends the evil bankers. How are they going to look at this? This will be seen as near enough a default. OK, the banks did not make a loss, but it is a warning shot Third World countries do not expect to pay off their debts. So they will only lend at reasonable rates in return for a loan guarantee from the industrialised world. The industrialised world now has effective control over the financial nerve centre of every Third World country. What is even better is that the West will have destroyed the independent creditworthiness of every poor country, while only paying off the debts of a few of them.
I suppose the biggest grouse I have with the debt campaigners is their dishonesty. They may believe that the only constraint on the education and health of Third World children is debt, although if that is the case why are they calling for "conditions" on this debt relief? However, the consequences are not spelled out. Of course, infantilisation of sub-Saharan Africa may not be the primary purpose, but it is a perfectly foreseeable consequence and anything reasonably foreseen is intended. Debt campaigners will have to be honest that their campaign will lead to the colonisation of large parts of the Third World. Public opinion in both the First and Third World may judge it an acceptable price to pay for progress, but they are going to be awfully angry if they wake up and find that they were lied to.
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