Debt forgiveness gathers steam
Wealthy nations will discuss absolving poor countries of loan payments at Friday's G-7 summit in Washington.
JOHANNESBURG, SOUTH AFRICA
It's an idea that's been throbbing in the hearts and minds of liberal activists, antiglobalization campaigners, and rock star Bono for years: Canceling 100 percent of the massive foreign debts owed by the world's poorest countries, thus freeing them to spend millions on healthcare, education, and other poverty-busting plans, rather than just on interest payments for their massive loans.
But it's rarely had much serious political support. Until now. Suddenly both the Bush administration and British Prime Minister Tony Blair's government are behind the idea. And it's on the agenda as G-7 finance ministers meet Friday in Washington.
The Bush team's interest seems to have grown out of its campaign to cancel Iraq's $120 billion debt. If oil-rich Iraq deserves to be freed from its burden, the argument goes, so do the world's poorest nations. Also, backing a plan to help impoverished millions in a single stroke fits with President Bush's "compassionate conservative" agenda, and could impress swing voters in time for the election.
Observers don't expect a final plan to emerge immediately. But there's widespread agreement that the growing momentum means some form of unprecedented action is inevitable.
"This is the farthest we've come toward 100 percent debt cancelation," says Salih Booker, head of Africa Action, a Washington advocacy group involved in the fight against apartheid in South Africa in the 1980s.
By backing the idea, the US and British governments have changed the terms and momentum of the debate. For one thing, after long discounting it, the US now supports the doctrine of "odious debt" - that nations shouldn't have to repay debts incurred by deposed despots who didn't have popular support.
It's an argument Mr. Booker and others have used for years. "When a tyrant goes, his debt should go with him," Booker says, arguing that the notion applies as much to Mobutu Sese Seko in Zaire (now Congo) and Gen. Sani Abacha in Nigeria, as it does to Saddam Hussein and Iraq. (The Congo now has $9.3 billion in debt; Nigeria, $30 billion.)