World Bank and I.M.F. Approve Debt Relief for Poor Nations

In my search this morning for an article worth blogging I came across a lot of bad news. Al Qaeda bombed Bali again; the US is thinking of bombing a village in Syria that's said to be housing Iraqi in surgents; there's still genocide being committed in the Sudan, and the world still doesn't seem to care; Somalia and Rwanda are having difficulties and more mass graves have been found in the Congo.

So what's a blogger to do with so much bad news and only an hour to post a blog, take out the garbage, clean litter boxes, and then get ready for a 4 hour drive from Tampa to Miami? Why post some good news of course.

Actually, I'm of mixed feelings about the cited article. Debt cancellation is a great thing for absolutely impoverish countries. Jeffrey Sachs (The End of Poverty) and Bono have been lobbying for debt's to be cancelled so that the GDP of poor nations can be redistrubited into education, healthcare and expanding the economy/labor force. Obviously I very much want that for the African nations whom are still struggling with total poverty.

However, I'm also firmly against graft. African leaders have a strong tendency to take the money and run, as they say. I believe provisions were supposed to be worked out to prevent graft or obscene misapproprations of investment funds from happening but this is Africa and as they sang in the musical, anything goes!

In addition, debt cancellation also sends a message to countries that have poorly mismanaged their economy; if you mess up, the rich countries will bail you out, again. Granted, the rich countries have screwed the poor ones, especially in Africa 8 ways from Sunday so this could be merely payback but still, the theme here is that African soveriegnty must beget personal responsibility from the leadership and if Central Africa is any indication of that, this opportunity to cancel debt and start fresh will be an exercise in futility. As always, we shall see.

Here's the story:

Finance ministers of one hundred eighty-four countries have accepted a plan to cancel the debts of some of the world's poorest nations.  The plan forgives one hundred percent of debts owed to the World Bank, International Monetary Fund and African Development Bank.

The policymaking committees of the World Bank and International Monetary Fund approved the plan during meetings in Washington. 

Leaders of the industrial nations in the Group of Eight agreed on the plan when they met in July in Scotland.  The United States is joined in the G-Eight by Britain, Canada, France, Germany, Italy, Japan and Russia.

The leaders agreed to cancel about forty thousand million dollars in debt owed by eighteen nations.  Most are in Africa.  Four are in Latin America.  Up to twenty more countries could also be approved for debt forgiveness if they, too, meet conditions.  If so, this would increase the total amount of debt cancellation to fifty-five thousand million dollars. 

The boards of directors of the World Bank and I.M.F. are expected to act quickly on final approval of the plan.  The two lenders first proposed in nineteen ninety-six to cancel the debts of highly indebted poor countries.

The plan will save the eighteen countries about one thousand million dollars a year in debt repayments.  Officials want the countries to use the money for education and health care and to fight poverty.

Anti-poverty groups praised the agreement.  But some countries said it might leave the World Bank with limited resources to provide new aid for developing nations. 

To answer these concerns, G-Eight finance ministers sent a letter to World Bank President Paul Wolfowitz before the meetings.  The ministers promised more money in the future to "cover the full cost" of the lost repayments. 

G-Eight leaders, when they met in July, promised big increases in their development aid in the next five years.

Mister Wolfowitz says the next step now is to complete a world trade agreement that helps developing countries.  Ministers of the World Trade Organization will try again to finish their negotiations when they meet in Hong Kong in December.  Talks on a new trade agreement began in Qatar in two thousand one.