July 12, 2006


Caption: Speaking of debt, Ferdinand had to pawn his beautiful tail feathers to pay for the bill for mating season. Was it worth it?

This is the third in a series of posts about the issues of debt at an international, national, and personal level.

Of all the places in the world, debt cancellation is most urgently needed in sub-Saharan Africa, which is also the world's poorest region. According to the American Friends Service Committee's Life Over Debt Campaign, this region:

*carries a debt of $201 billion. The G8 debt cancellation agreement mentioned last time, while a welcome step, only cancels an estimated $33 billion. In spite of its poverty, Africa repaid more than 90 percent of the $294 billion received between 1970 and 2002;

*spends up to five times more on debt repayment per person than it spends on health care and education for its people; and

*paid back $1.51 in interest for every $1 received in aid grants in 1999.

The debt, much of which was incurred by authoritarian regimes in the context of Cold War politics as a reward for loyalty, now stands in the way of meeting urgent human needs.

For example, Sub-Saharan Africa accounts for around 64 percent of the world's HIV/AIDS cases, although only 10 percent of Africans have access to needed medicines. The death toll from this has been estimated to be 6,000 per day. Of the 13 million AIDS orphans in the world, 12 million are in Africa. By 2010, this figure is expected to increase to 20 million. Some 300 million people live on less than $1 a day and around 38 million are facing a hunger crisis.

As Jeffrey Sachs, author of The End of Poverty: Economic Possibilities for Our Time, convincingly argues, wiping out extreme poverty in Africa and elsewhere is easily within reach given the political will. Sachs maintains that debt cancellation is an essential component of a global strategy which also includes trade policy, the use of science in the service of development, and environmental stewardship.

Since misery loves company, a global anti-poverty strategy in which debt cancellation without harsh conditions is a component would be a prudent investment on the part of the world's richest nations.

Next time: a starting look at debt in the USA.


No comments: