After days of indecision, the G7, the world's leading industrialized nations announced today that all Tsunami afflicted countries would be eligible to have their debt repayments halted. Thank goodness. How obscene it would have been to witness the aid that is now flowing into Sri Lanka, Indonesia, and Thailand flow immediately out again to the coffers of the same donors .
How unjust it would have been if these countries were thwarted from regaining their footing, tending their casualties, and burying their dead, because their scarce resources were being diverted into rich countries bank accounts.
Such a development would be shocking but not surprising. Because for most of the world's poorest countries, that is the situation they find themselves in each and every day. While 155,000 people died in the tragic events of Christmas Day over 15,000 children die every single day in Sub Saharan Africa from poverty related diseases, their governments unable to do anything meaningful to treat them, because they are paying out $30 million dollars each and every day to the World Bank, the IMF and rich world creditor nations. For every one dollar that is given to that region in aid one and a half dollars goes out to cover debt repayments.
"WHAT'S GOOD FOR THAILAND MUST BE GOOD FOR TANZANIA
What is good for Thailand must be good for Tanzania. An African death must be weighted as highly as an Asian one. The principle that countries in need should not have to service their debts must be applied evenly.
And this is the moment to add this call to the debt motarorium now being applied in Asia. With the G7's finance ministers meeting in early February, and debt relief on their agenda, this is the time to demand a principled and more universal approach to the issue. An approach that recognizes explicitly that countries must not have to prioritize debt service repayments over their ability to meet their citizens most basic needs.
No country in need wherever it is.
MORE DEBT RELIEF NEEDED FOR POOR COUNTRIES
But let's not stop there. Let's seize this moment when debt cancellation is on the global political agenda, and call for more: for the cancellation of debts not only when a country cannot afford to repay them, but also when it shouldn't have to. Again a situation where we have a recent precedent to fall on.
The United States led the call for the cancellation of IraqÌs debts last month, basically because the loans the Iraqi people were having to service had been racked up by a tyrannical and corrupt dictator. But we don't have to look hard to find despots with similar profiles: Marcos of the Philippines, Abacha of Nigeria, Mobutu of Zaire, the military junta of Argentina, and the apartheid regime of South Africa were all lent tens of billions of dollars which present day generations in the countries they once ruled over have to now pay for.
If the Iraqi people are no longer to have to pay for the knives that Saddam used to slaughter them, then neither should the Congolese, the Nigerians, the Argentineans, the Filipinos, nor the South Africans have to pay for monies borrowed by their former dictators.
And lets also take this rare moment when the world is united in grief and mourning to call for a decoupling of debt relief from harmful economic conditions.
Currently, even if a country is eligible to get some of its debts cancelled, this won't actually take effect unless they agree to follow the World Bank and IMFs strict rules. Rules like demands to slash public expenditure. Which when a country is poor means in practice fewer children being sent to school, less families with access to healthcare, women having to trudge 10 miles to collect water because no monies are spent on water delivery, and girls in contexts where no monies are invested in sanitation having to pee in the bushes at night, in the process taking their chances that they will not be attacked or raped.
If debt relief is to truly become a mechanism for alleviating the lots of the most vulnerable and poor, such economic conditions cannot be the price attached to it.
Out of the devastation wrought by the Tsumani we can clear a path to a better world. Not only for those pummeled by forces of nature though, but also for those who have suffered because of the wrong decisions of man. There must be a relationship between charity and change.
Noreena Hertz is the Associate Director for the Center for International Business at the University of Cambridge. Recognized as one of the world’s leading experts on economic globalization, her work has been published in The Washington Post, The New Statesman, the Observer and the Guardian. She holds an MBA from Wharton and a PH.D from the University of Cambridge.